Pakistan Credit Rating Agency Limited assigns stability rating to Faysal Money Market Fund

Lahore, August 20, 2015 (PPI-OT): The Pakistan Credit Rating Agency (PACRA) has assigned the stability rating of ‘AA+'(f) (Double A Plus; fund rating) to Faysal Money Market Fund (FMMF), an open-end money market fund. The fund’s rating denotes a very strong capacity to manage relative stability in returns and very low exposure to risks. The investment objective of the fund is to generate consistent and competitive returns with minimal risk by investing in liquid, low risk short term investments, yielding competitive returns.

The rating reflects the fund’s very low risk and very strong liquidity profile emanating from its investment philosophy. At end-Jun’15, the fund was primarily invested in T-Bills (61%). The remaining assets (39%) are invested as term deposits with high quality banks. The fund’s duration clocked in at 51 days at end-Jun’15 which indicates moderate exposure of the fund to adverse interest rate movements.

Going forward, the fund plans to keep a portfolio with an average duration not exceeding 60 days. In the past, the fund had duration beyond this mark. However, the management is committed to this change in interest rate exposure character. The unit holding pattern of the fund is highly concentrated with top10 investors representing 73% of the fund’s assets, with modest investment from group concerns.

The rating remains dependent on maintaining at least 50% allocation towards government securities with portfolio duration not exceeding 60 days. Meanwhile, the remaining assets of the fund must be placed with scheduled banks having credit ratings ‘AA’ and above. PACRA would monitor compliance against agreed parameters on monthly average basis.

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