Pakistan Credit Rating Agency maintains Stability Rating of Atlas Income Fund

Lahore, January 23, 2013 (PPI-OT): The Pakistan Credit Rating Agency (PACRA) has maintained the stability rating of Atlas Income Fund (AIF) at ‘A+ (f)’ (Single A Plus ; fund rating), an open-end income fund. The fund’s rating denotes a strong capacity to manage relative stability in returns and low exposure to risks.

The mandate of the fund is to earn competitive rate of return while ensuring capital preservation by constructing a liquid portfolio of investments in debt securities, money market and placements with scheduled banks.

The rating reflects the fund’s low exposure to interest rate volatility, improving credit profile and diversification across assets. At end Sep-12, the portfolio is primarily invested in government securities (68%), while the remaining assets are invested in good quality TFCs (25%) and daily cash balances with banks (4%). The unit holding pattern of the fund is highly concentrated with the top10 investors representing 83% of fund assets. However, this is mitigated to a large extent by sizeable investments of group companies.

Going forward, the fund intends to reduce the portfolio’s allocation towards corporate TFCs (15%) and government securities (63%). The management intends to keep ~10% of the fund’s net assets invested in Margin Trading System (MTS).

The remaining assets of the fund will be placed as TDRs and cash balances with banks/DFIs of strong credit quality. The main risk factor affecting stability of returns emanates from volatility in prices of TFCs amidst largely illiquid market for this segment; however, comfort can be drawn from the fact that most of the TFCs are of good quality.

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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