Pakistan Credit Rating Agency assigns Stability Rating To IGI Money Market Fund

Lahore, April 11, 2013 (PPI-OT): The Pakistan Credit Rating Agency (PACRA) has assigned a stability rating of ‘AA (f)’ (Double A ; fund rating) to IGI Money Market Fund (IGI-MMF), 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.

The investment mandate of the fund is to generate competitive returns consistent with low risk from a portfolio comprising short term instruments including cash deposits and government securities.

The rating reflects the fund’s very low risk profile emanating from the fund’s investment policy to invest in securities rated ‘AA’ and above. The fund’s portfolio, at end Dec-12, primarily comprises T-bills (71%), term placements (15%) and commercial paper Sukuks (10%). The remaining net assets of the fund are kept as daily cash balance with entities having very strong credit quality.

The portfolio duration of 65 days results in slightly high exposure towards interest rate volatility. Moreover, the fund’s unit holding pattern remains fairly concentrated with top10 investors comprising 70% of the fund’s net assets.

Going forward, 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 with portfolio duration of less than 90 days. The remaining assets of the fund must be placed with scheduled banks having very strong credit quality.

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