The Pakistan Credit Rating Agency (PACRA) has maintained the stability rating of the Lakson Money Market Fund (LMMF) at "AA (f)" (Double A; fund rating), 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.
LMMF primarily invests in treasury bills, money market placements, and deposits with scheduled banks with the objective of providing stable and competitive returns by constructing a highly liquid portfolio. The fund's very low risk emanates from its investment mix, having exposure of 75% in Government securities (T-Bills) at end-Mar12. The remaining assets are in form of deposits with banks carrying a minimum credit rating of AA. The fund carries duration of 50 days at end-Mar12, in order to avoid volatility arising from interest rate fluctuations. However, the unit holding concentration remains high with top 10 investors comprising 78% of the fund's net assets.
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; the portfolio duration has to be less than 90 days.
About the Management Company: Incorporated in January 2009, Lakson Investments Limited (LI) is the investment management arm of Lakson Group. Lakson Group has interests in multiple sectors including consumer non-durables, fast food, information technology, media, insurance, paper and board, printing and packaging, surgical instruments, textiles, and travel.
LI is the management company for LMMF and has been rated "AM3+" by PACRA. LI is currently managing six open-end funds with total assets under management of PKR 9.46bn at end-Jun12. The Chief Executive Officer, Mr Babar Ali Lakhani, has investment management experience in local and foreign markets. The Fund Manager of LMMF, Mr Muhammad Umair Chauhan, is also the CIO of LI and has significant local experience in the asset management industry.
The primary function of PACRA is to evaluate the capacity and willingness of an entity to honour its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.-PR