Karachi, The Pak Qatar Islamic Income Fund, known for its medium-risk profile and Shariah-compliant investment strategies, has successfully maintained a stable rating for its Pak-Qatar Monthly Income Plan (PQMIP). This plan caters to corporate and high net worth investors seeking monthly dividends within a stable income category.
According to The Pakistan Credit Rating Agency Limited, the PQMIP is part of the broader Pak Qatar Islamic Income Fund, which includes other plans like the Pak-Qatar Income Plan and the Pak-Qatar Khalis Bachat Plan. The Fund aims to maximize returns for investors by focusing on Shariah-compliant, authorized investment avenues. PQMIP, with a perpetual term, is designed for investors seeking medium to long-term income instruments and short-tenor money market instruments to generate superior, long-term, risk-adjusted returns in line with Shariah practices. The Plan has a policy of investing only in avenues rated single A or higher and has the flexibility to change its dividend frequency for the benefit of unit holders, subject to prior intimation.
As of the end of September 2023, PQMIP's Asset Under Management (AUM) size was PKR 853 million, a significant increase from PKR 344 million in June 2023. The Fund's allocation strategy as of September 2023 included approximately 44.2% in deposits with AA and above-rated banks, around 44.8% in mainly A+ and above-rated Corporate Sukuk, and about 6.9% in Government of Pakistan Ijara Sukuk. The duration of the Fund stood at 35 days at the end of September 2023, effectively limiting exposure to interest rate risk. However, the Weighted Average Maturity (WAM) of the Fund, standing at 362 days as of September 2023, indicated a high level of credit risk, particularly given its investments in Government Ijara Sukuk and Corporate Sukuk. The unit holding pattern of the Fund showed a high concentration among the top four investors, with about 75.33% being related parties, thereby reducing exposure to redemption pressures. Despite these concentrations, the Fund's strong liquid profile has sustained its ability to meet redemptions. The Fund remained compliant with credit quality criteria and achieved an annualized return of 18.5% as of September 2023, in line with its market peers.
PACRA notes that any significant changes in the investment policy or the rating criteria could impact the stability rating of the Plan. The Plan's risk profile may experience slight variations in response to the economic conditions' volatility.
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