Lahore, March 07, 2022 (PPI-OT):The rating of AL Habib Islamic Income Fund (formerly First Habib Islamic Income Fund (or the “Fund”)) reflects the fund’s moderate risk profile. The Fund had allocated ~61% of fund’s assets as bank deposits having rating ‘A’ and above, while ~29% were placed in Sukuks rated ‘A+’ and above. As per the investment policy, the Fund can invest up to 100% of its assets as Cash in Bank Accounts having rating of ‘A’ and above. The Fund has highly concentrated unit holding pattern, with top 10 investors representing ~89% of the fund size at end Dec’21.

The weighted average maturity (WAM) of the Fund is ~683 days in Dec’21 (Jun’21: ~814 days) having longer WAM is making the Fund vulnerable to credit risk. The duration of the fund is 25 days, limiting the exposure to interest rate risk. Since Jun’21 the net assets of the Fund has manifested decrease by 54% and stood at PKR 6.51mln at end Dec’21. Going forward, the management intends to increase it’s investments in AAA rated avenues around 50% and 25% in AA rated avenues. Asset credit quality and duration would remain imperative for 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