Pakistan Credit Rating Agency revises Stability Rating of Alfalah GHP Cash Fund

Lahore, November 26, 2012 (PPI-OT): The Pakistan Credit Rating Agency (PACRA) has revised the stability rating of Alfalah GHP Cash Fund (AGCF), an open-end money market fund to “AA(f)” (Double A; fund rating) from “AA+(f)”. 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 change in the fund’s investment strategy, primarily relating to the duration of underlying investments. In recent period, the fund’s duration has exceeded previously committed level of maintaining a duration of less than 60 days.

This resulted in a relatively increased exposure towards interest rate risk. Though in a declining interest rate scenario this helps in increasing the fund’s returns. Nevertheless, the fund’s sound credit risk profile emanates from its investment mix, having exposure of 88% in Government Securities (primarily T-Bills) at end-Oct12. The remaining assets are deposited with banks carrying a minimum credit rating of AA.

The fund’s rating is dependent on maintaining a highly liquid low-risk portfolio of government securities and bank balances. A minimum exposure of 25% in Government securities is required, while the deposits have to be with “AA” category banks. Meanwhile, the portfolio duration must not exceed 90 days.

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

You May Also Like

Leave a Reply