Pakistan Credit Rating Agency Limited assigns stability rating to Faysal Financial Sector Opportunity Fund

Lahore, January 12, 2016 (PPI-OT): The Pakistan Credit Rating Agency (PACRA) has assigned the stability rating of ‘AA-‘(f) (Double A Minus; fund rating) to Faysal Financial Sector Opportunity Fund (FFSOF), an open-end income fund. The fund’s rating denotes a very strong capacity to manage relative stability in returns and very low exposure to risks. The fund’s investment objective is to generate a competitive rate of return to its investors by investing in money market and debt instruments with major exposure in financial sector.

The rating reflects sound credit quality and liquidity profile of the fund owing to sizeable investments in government securities and high rated banks. At end-Nov’15, the fund is primarily invested in daily cash with high credit quality (‘AA-‘ and above) rated banks (61.8%), while remaining assets are invested in government securities (PIBs: 25.7%) and TFCs (9.7%) rated ‘AAA’. Fund carries redemption risk as the unit holding pattern of the fund is concentrated, with the top 10 investors representing 63% of the net assets.

Going forward, the fund allocates 70% of the assets toward high quality financial sector TFCs and cash balances (rated ‘AA-‘ and above) and the remaining net assets of the fund are placed with government securities (30%). Material changes in the fund’s asset allocation strategy, which could negatively impact the fund’s credit quality and exposure to interest rate risk, remain critical for the rating.

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