Pakistan Credit Rating Agency Limited maintains stability rating of Atlas Islamic Income Fund

Lahore, March 13, 2014 (PPI-OT): The Pakistan Credit Rating Agency (PACRA) has maintained the stability rating of Atlas Islamic Income Fund (AIIF), an open-end Shariah compliant income fund, at ‘AA- (f)’ (Double A Minus ;fund rating). The fund’s rating denotes a very strong capacity to manage relative stability in returns and very low exposure to risks.

The rating reflects the fund’s objective to earn a reasonable rate of return by investing in a diversified portfolio of liquid and high quality Islamic income investments while ensuring long-term preservation of capital.

The rating reflects strong credit quality and a robust liquidity profile of the fund emanating from the asset mix of the fund comprising sizeable investment in GoP Ijarah Sukuks (71% at end-Dec13). The remaining funds are placed with banks rated ‘A’ and above (28%).

Additionally, the rating incorporates the fund’s modest exposure to interest rate volatility with the average portfolio duration of 120 days over the last 4 quarters. However, the unit holding pattern remains highly concentrated with the top10 investors representing 79% of the fund’s assets.

Going forward, the fund intends to largely maintain its net exposure in GoP Ijara Sukuks with the remaining assets being kept in the form of bank placements – deposits and TDRs predominately amongst Islamic institutions with high ratings. Material changes in the fund’s asset allocation strategy, which could negatively impact the fund’s credit quality and exposure to interest rate risk, remain critical for the rating.

For more information, contact:
Hammad Rashid
Analyst
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425
Email: hammad.rashid@pacra.com
Web: www.pacra.com

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