PACRA Upgrades Stability Rating of Alhamra Islamic Money Market Fund

Alhamra Islamic Money Market Fund (or the ‘Fund’) is low risk-profile fund. The Fund’s rating reflects the Fund's strong credit and interest rate risk profile emanating from its investment strategy. The fund is allowed by its IPS to invest up to 100% of its exposure in AA and above-rated banks. At the end-Dec'21, the Fund had placed ~87% of its assets with commercial banks including 70% allocated to ‘AAA’ rated banks and 15% allocated to ‘AA’ rated banks. While ~12% of its net assets are invested in Shariah Compliant commercial papers and Sukuks. The weighted average maturity of the Fund was 14 days at the end-Dec’21, which is in line with PACRA methodology for money market funds. The duration of the fund was within 45 days as at end-Dec'21, limiting the fund's exposure to interest rate risk. At end-Dec'21, the top ten investors concentration stood at ~93% representing a high level of redemption pressure, which the Fund can cope up owing to its superior liquidity profile.
Going forward, the Fund will invest in accordance with its authorized investment policy and maintain its exposure in Shariah Compliant instruments, however the allocations will be diversified appropriately. Material changes in the Fund's asset allocation strategy, impacting it's credit quality and/or exposure to interest rate risk, would affect the rating.

About the Entity
MCB-Arif Habib Limited Savings and Investments Limited (MCB-AH or the "Company") is a public listed company, regulated by the SECP. MCB-AH holds licenses for Asset Management, Investment Advisory, and Pension Fund Management. MCB-AH caters to both conventional and Shariah-compliant clientele and is currently managing a diverse product slate of fifteen open-end funds and two voluntary pension schemes. MCB-AH is also managing one of the largest AUMs under the SMA segment and holds a significant position in the investment advisory domain.
The major shareholders of MCB AH are MCB Bank Limited ~51%, Arif Habib Corporation Limited ~30%, and Adamjee Insurance Company Limited ~8%. The general public holds the remaining ~11% of the shares. Mr. Saqib Saleem is the CEO of the Company. MCB-AH's control vests in an eight-member board of directors, including the CEO. There are four non-executive directors, while three directors are independent. The AUMs (CIS & VPS) of MCB-AH increased to ~PKR 110,012mln at end-Dec'21 (Jun'21: ~PKR 97,679mln).