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Lahore, June 28, 2012 (PPI-OT): The Pakistan Credit Rating Agency (PACRA) has maintained the stability rating of JS Income Fund (JSIF) at ‘A+(f)’ (Single A Plus – Fund Rating), an open-end income fund. The fund’s rating denotes a strong capacity to maintain relative stability in returns and possesses low exposure to risks.
The fund’s objective is to preserve capital while providing income growth, through investing primarily in debt and fixed income securities. The rating reflects a strong credit quality of fund’s assets, mainly consisting of investments in government securities, Cash balances and TFCs. The fund has strong liquidity profile, with major investment in government securities (T-Bills: 42%) and cash balances (32%) at end-Mar12.
The remaining assets constitute a diversified TFC portfolio (~25% of net assets – end Mar12), primarily comprising good quality debt instruments. The fund made provisioning against some sizable non-performing assets, benefiting in improved quality of net assets. A considerable decrease in fund size along with the high concentration in unit holding pattern, increases fund’s vulnerability to redemption pressure.
Going forward, the fund aims to maintain half of the assets in government securities and limiting TFCs exposure to its current levels of ~25%. The main risk factor affecting the stability of the returns emanates from any further deterioration in the credit quality of the asset profile and volatility in prices of TFCs, amidst largely illiquid market. Any change in the fund’s asset-mix impacting its credit quality and/or liquidity, would remain critical for the fund’s 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