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Pakistan Credit Rating Agency Limited maintains stability rating of Pakistan Income Fund

Lahore, January 01, 2016 (PPI-OT): The Pakistan Credit Rating Agency (PACRA) has maintained the stability rating of Pakistan Income (PIF), an open income fund, at ‘A+'(f) (Single A Plus ; fund rating). The fund’s rating denotes a strong capacity to manage relative stability in returns and low exposure to risks. The fund’s investment objective is to earn reasonable rate of return by primarily investing in debt and fixed income securities without taking excessive risk.

The rating reflects strong credit quality and sound liquidity profile of the fund emanating from sizeable investments in government securities. At end-Sep15, the portfolio was primarily allocated in government securities (PIBs: 43%, T-bills: 28%). Meanwhile, there was a high exposure towards debt securities, primarily TFCs from financial (11%) and corporate (8%) sectors.

This highlights the fund’s appetite for risk though currently these TFCs are mostly of good quality (AA- and above). At the same time, because of PIBs, the fund’s duration is comparatively high. The unit holding pattern of the fund is adequately diversified with top10 investors representing 41% of the fund’s assets as at Jun-15.

Going forward, the fund intends to maintain exposure to government securities, corporate debt securities and cash balances. The rating is contingent upon the fund’s interest rate sensitivity and volatility in prices of TFCs in case of exposure to low rated instruments. 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
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

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