Japan Credit Rating-Vital Information Service Reaffirms Fund Stability Rating of Habib Bank Limited Income Fund at A f

Karachi: JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has reaffirmed the Fund Stability Rating of HBL Income fund (HBLIF) at A(f).

Rating incorporates the depiction of moderate degree of stability in the fund’s NAV as also evident from the consistent returns posted by the fund over the 12-month period. While there have been incidences of non-performance in the fund’s portfolio, judicious provisioning policy has instated stability in the performance of the fund.

Overall credit risk on the holdings of the fund is moderate. Apart from few instances, selection of instruments has been superior, translating into manageable credit risk profile for the fund. Proceeds from maturing TFCs have been invested in government securities or maintained as cash and bank balances.

Interest rate risk on holdings carried in the fund is limited as investments largely comprise floating rate/ short-term instruments pegged to market interest rates. However, the fund is exposed to price risk on its TFCs holdings attributable to low trading volumes in the secondary market of corporate debt instruments.

Investor profile continues to feature concentration. Nevertheless, the ability of the fund to meet redemptions is considered sound, as the fund has sizeable investments in government securities having strong liquidity profile; moreover, the significant holding of a related party in the outstanding units provides cushion for mitigating risk emanating from low marketability of non-government debt instruments.

For more information, contact:
Mr. Javed Callea
Advisor
JCR-VIS Credit Rating Company Limited
Tel: +9221 35311861 (10 lines) (Ext: 501)
Fax: +9221 35311872-3
E mail: javed.callea@jcrvis.com.pk