Lahore, September 30, 2020 (PPI-OT): The rating captures the essence of change in the investment philosophy of the fund, as envisaged by the asset manager. The fund intends to invest in credit risk exposure of not less than “A+” (Single A Plus). The credit quality is expected to remain strong. Investment in these securities would also improve the liquidity profile of the fund, given relative ease in transactions. At end Jun’20, ~64.63% of fund’s assets are invested in T-Bills, ~24.03% holding is maintained in Sukuk/TFCs, whereas ~1.22% and ~8.19% of assets were placed in cash at bank and CP respectively. The aggressive mandate of the fund allows the management to take such positions in the Fixed Income market, but the high duration decreases the NAV stability. The unit holding pattern of the fund reflects high concentration risk as top 10 investors represent ~97.8% of the fund’s assets.
Going forward, the fund intends to maintain its exposure in government securities and maintain/increase allocation towards Sukuk/TFCs, given the avenues available for investing. Material changes in the fund’s asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk, would affect its rating. There is a single investment below A rating category, which the fund intends to replace with higher ratings. Hence, the Rating Watch is assigned.
For more information, contact:
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,