Lahore, September 06, 2021 (PPI-OT):The rating of First Habib Income Fund (or the “Fund”) reflects the Funds medium risk profile and also captures the objective of the Fund to provide reasonable rate of return consistent with reasonable concern for safety of principal amount to the Unit Holders. During 2HFY21, the asset allocation of the Fund ~88% remained in AAA rated banks, which reduced the credit risk exposure of the Fund.

However, there has been concentration in single bank deposit which would be diversified, going forward. The investment policy of the Fund strictly prohibits the investment in below A rated avenues. The Fund has high concentrated unit holding pattern, with top 10 investors representing ~77% of the Fund size at end Jun’21. The WAM of the Fund increased to ~275 days at Jun’21 (Dec’20: ~553 days) and the duration of the investments is 22 days at Jun’21.

Going forward, the management intends to shift Funds allocation towards PIBs and T-Bills and in ‘AA’ and above rated Banks. Shifting more assets to longer term securities may expose the Fund to interest rate sensitivity. These material changes in the Fund’s asset allocation strategy, have impacting the Fund’s credit quality and would remain important for the 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