Final PR
The Pakistan Credit Rating Agency Limited

Rai Umar Zafar

Mohsin Naseer

Applicable Criteria

  • Methodology | Fund Stability Rating (Jun 17) [View]

Related Research

  • Sector Study | Mutual Funds (Oct 16) [View]
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PACRA Maintains Stability Rating of Alfalah GHP Cash Fund
 Rating Type Stability Rating
 Action. Maintain Upgrade
 Long Term AA+(f) AA+(f)
 Short Term - -
 Outlook Stable Stable
 Rating Watch - -

The investment objective of Alfalah GHP Cash Fund (AGCF) is to generate at competitive returns while preserving capital by investing in assets with low risk and high degree of liquidity from a portfolio constituted of mostly money market securities and placements.

The rating reflects the positive change in the investment strategy to reduce the duration of the fund. During the year, the fund's exposure reflected strong credit profile emanating from its investment policy to invest in high credit quality instruments with portfolio duration not exceeding 60 days. On monthly average basis, fund maintained sizeable exposure in government securities (May'17: 99%). The duration remained less than 60 days in the past 6 months. The fund remains prone towards redemption risk as top 10 investors represent 97% of the fund size.

Going forward, the rating remains dependent on maintaining exposure with high credit quality financial institutions with portfolio duration less than 60 days. Meanwhile, the remaining assets of the fund must be placed with scheduled banks having very strong credit quality. PACRA would monitor compliance against agreed parameters on monthly average basis.
About the Entity
Commencing operations in Mar 05, Alfalah GHP Investment Management Limited (AGIML) is 82% owned by Abu Dhabi Group, including 40% through Bank Alfalah Limited (BAFL) and 42% through MAB Investments Inc. Meanwhile, GHP Arbitrium Holdings Limited (GHP) owns 14% stake. BAFL is the sixth largest commercial bank of the country with a branch network of over 500 branches. AGIML is currently managing sixteen open-end funds with cumulative assets under management of PKR 36bln at end-Mar17.

The company's six member BoD comprises CEO, two representatives of BAFL, one representative of GHP Arbitrium Holdings Limited, one representative of MAB Investments and one independent director. The board is chaired by Mr. Ali Sultan, Group Head - Treasury, Investments & Financial Institutions, Bank Alfalah Limited. The CEO of AGIML, Ms. Maheen Rahman, has over 17 years of rich local and international experience in the financial services. She is assisted by an able team.
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.