Pak Qatar Daily Dividend Plan Holds Steady in Market, Retains Stability Rating

Karachi, The Pak Qatar Islamic Cash Fund continues to show robust performance, particularly through its Pak Qatar Daily Dividend Plan (PQDDP). Focused on delivering competitive returns with daily dividends, PQDDP has maintained its stability rating while adhering to a low-risk, Shariah-compliant investment strategy.

According to The Pakistan Credit Rating Agency Limited, the PQDDP is part of the Pak Qatar Islamic Cash Fund, an open-ended Shariah-compliant money market fund. The Fund's main objective is to maximize returns for investors by focusing on Shariah-compliant, authorized investment avenues. PQDDP, along with the Pak-Qatar Asan Munafa Plan and Pak-Qatar Cash Plan, is offered under the umbrella of the Fund. The PQDDP aims to invest in low-risk and liquid Shariah-compliant instruments, with a policy of not investing in avenues rated below double AA. The plan has the flexibility to change its dividend frequency for the benefit of unit holders, subject to prior notification.

As of September 2023, the Asset Under Management (AUM) size of PQDDP was PKR 1,878 million, a slight decrease from PKR 2,159 million in June 2023. The Fund's allocation included approximately 74.8% in deposits and placements with AA and above-rated banks, and about 22.8% in AA and above-rated Corporate Sukuk. The duration and Weighted Average Maturity (WAM) of the Fund, standing at 21 days at the end of September 2023, effectively limits exposure to interest rate and credit risks. The unit holding pattern of the Fund was concentrated among the top four investors, with around 78% being related parties, thus reducing exposure to redemption pressures. The Fund's strong liquid profile has bolstered its ability to meet redemptions. In terms of performance, the Fund remained compliant with credit quality criteria and achieved an annualized return of 18.8% as of September 2023, aligning with its peers in the market.

PACRA notes that any significant changes in the investment policy or the rating criteria could impact the stability rating of the Plan. The risk profile of the Plan may see slight variations due to the economic conditions' volatility.

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