PACRA Maintains Stability Rating for Pak Qatar Daily Dividend Plan

Karachi: The Pakistan Credit Rating Agency Limited (PACRA) has maintained the stability rating of the Pak Qatar Daily Dividend Plan, a constituent of the Pak Qatar Islamic Cash Fund, at AA(f) with a stable outlook. This rating reflects the fund’s low-risk profile and its commitment to maximizing investor returns through shariah-compliant investments.

According to Pakistan Credit Rating Agency Limited, the Pak Qatar Islamic Cash Fund, which encompasses various plans including the Daily Dividend Plan, had an asset under management (AUM) size of PKR 1,054 million as of the end of September 2024. The fund’s asset quality aligns with the rating criteria, with significant investments in AA-rated avenues and government securities. As of September 2024, approximately 61% of the fund’s investments were in AA-rated avenues, while 37% were in government securities or AAA-rated investments.

The investment distribution also revealed that about 62% of the fund’s assets were held in banks as cash and placements, followed by 18% in government Sukuk and commercial papers, and 17% in corporate Sukuk and commercial papers. The fund’s weighted average maturity (WAM) and duration were both 28 days, a factor that limits exposure to credit and interest rate risks.

However, the fund is exposed to a high level of redemption pressure, with approximately 80.87% of its units held by the top ten investors, which include related parties. The presence of diversified and granular participants among these top investors provides a buffer against aggressive redemption pressures from non-related parties. Despite this concentration, the investments remain marketable with sufficient liquidity to address potential redemption risks.

PACRA noted that any significant changes in the fund’s investment policy or the criteria used for rating evaluation could impact the current rating.

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