The Pakistan Credit Rating Agency (Pacra) has maintained the long-term and short-term entity ratings of Arif Habib Investments Limited (AHI) at 'A' (single A) and 'Al' (A one) respectively. These ratings denote a low expectation of credit risk emanating from a strong capacity for timely payment of financial commitments.
The ratings reflect the company's ability to sustain pressure on its financial profile. There has been a significant improvement in the company's risk absorption capacity on account of enhanced equity base and debt free structure. Nevertheless, the company is exposed to market risk through investments in its own mutual funds. The company's AUM has remained largely stable, sustaining the stream of fee revenue.
The rating is dependent on the sustained credit profile of the entity despite continuing tough operating environment. While ensuring seamless integration of Arif Habib Investments Limited and MCB Asset Management Company, the design and implementation of a robust business strategy would be vital. The ratings would remain on rating watch, pending proposed merger, AH1 and MCB AMC of which the implications for the merged entity would be assessed once a combined business plan is fina1ized.-PR