PACRA Maintains Stability Rating of MCB DCF Income Fund

Lahore, March 12, 2021 (PPI-OT): The rating reflects the adequate strength of the fund’s credit and interest rate risk profile. Investment in short tenor instruments and considerable placements in banks enhances the liquidity profile of the fund. As per the IPS, weighted average time to maturity of the net assets shall not exceed 4 years and this condition shall not apply to securities issued by the GoP and there is no restriction regarding time to maturity of any single asset in the portfolio and duration of a single security in the portfolio.

At end-Dec’20, ~28% of fund’s assets were invested with banks primarily rated ‘AAA’, while ~41% of funds were invested in T-Bills, while the remaining exposure was maintained in government backed securities and spread transactions. The unit holding pattern of the fund is moderately concentrated with top ten investors representing ~34% of the fund’s assets, which exposes the fund to low level of redemption pressure.

Going forward, in accordance with the investment policy and market circumstances the fund may increase exposure in banks, spread transactions and short-term government papers. Material changes in the fund’s asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk, would affect the rating.

For more information, contact:
Analyst,
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore, Pakistan
Tel: +92-42-5869504-6
Fax: +92-42-5830425
Email: hammad.rashid@pacra.com
Website: www.pacra.com

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