The Pakistan Credit Rating Agency Limited
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Muhammad Zain Ayaz

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PACRA Maintains Stability Rating of First Habib Income Fund

Rating Type Stability Rating
(04-Sep-21 )
(04-Mar-21 )
Action Maintain Upgrade
Long Term AA(f) AA(f)
Short Term - -
Outlook Stable Stable
Rating Watch - -

The rating of First Habib Income Fund (or the "Fund") reflects the Funds medium risk profile and also captures the objective of the Fund to provide reasonable rate of return consistent with reasonable concern for safety of principal amount to the Unit Holders. During 2HFY21, the asset allocation of the Fund ~88% remained in AAA rated banks, which reduced the credit risk exposure of the Fund. However, there has been concentration in single bank deposit which would be diversified, going forward. The investment policy of the Fund strictly prohibits the investment in below A rated avenues. The Fund has high concentrated unit holding pattern, with top 10 investors representing ~77% of the Fund size at end Jun’21. The WAM of the Fund increased to ~275 days at Jun'21 (Dec'20: ~553 days) and the duration of the investments is 22 days at Jun'21.
Going forward, the management intends to shift Funds allocation towards PIBs and T-Bills and in 'AA' and above rated Banks. Shifting more assets to longer term securities may expose the Fund to interest rate sensitivity. These material changes in the Fund's asset allocation strategy, have impacting the Fund's credit quality and would remain important for the rating.

About the Entity
AL Habib Asset Management Limited incorporated in September 2005 as an unlisted public company, is one of the growing Asset Management and Investment Advisory Company in Pakistan. The company is licensed by the Securities and Exchange Commission of Pakistan (SECP) to carry out these services under the Non-Banking Finance Companies Regulations. The Company is a wholly owned subsidiary of Bank AL Habib Limited.
The Board of Directors comprises six members. The CEO, Mr. Kashif Rafi, has vast experience expanding over 20 years in the field of Investments and Fund Management. The Company’s diverse product slate includes 4 conventional funds and 2 shariah compliant funds.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.