PACRA Assigns Initial Stability Rating to JS Islamic Premium Fund

In order to strengthen its penetration in Islamic Categories, JSIL launched the JS Islamic Premium Fund on 03 November 2023. The purpose of the fund is to contribute to and develop the microfinance industry. The Investment policy of the fund states that the fund can invest up to 75% as below as A- rated avenues, with no restriction regarding the time to maturity of any single asset in the portfolio or the Duration of a single security in the portfolio. JS Islamic Premium Fund’s primary aim is to optimize income generation by allocating funds to Shariah-compliant, top-tier Islamic financial instruments, including Islamic microfinance banks, Sukuks, Islamic bank deposits, and short-term money market instruments to maximize growth for your investments. The AUMs of the Fund stood at PKR 471mln at the end of Nov’23. As of the end of Nov'23, the Fund's credit quality was ~45.27% in AAA, ~53.03% in double AA, and remaining in others. The Fund had invested ~52.72% in Cash deposits, ~45.01% in Islamic Sukuks, and the remaining in others.
The duration of the fund stood at 66 days at the end of Nov’23, limiting the exposure to interest rate, and the WAM of the Fund stood at 613 days at the end of Nov’23, exposing high credit risk, Since the investment is in long-term Ijara Sukuk, the credit risk is at a manageable level. The unit holding pattern of the Fund stood at ~99.98%, representing the top ten investor concentration, exposing the fund to redemption pressure. However, investment in high-quality allocation avenues provides comfort. During Nov’23, JS Islamic Premium fund posted an annualized return of 18.71% against the Benchmark return of 10.62% thereby outperforming the Benchmark by 809 bps.
Going forward, compliance with the credit rating quality criteria for the assigned rating will remain crucial.

About the Entity
JS Investments Limited is the oldest private-sector Asset Management Company in Pakistan. The company was established in 1995 and is listed on the Pakistan Stock Exchange. The Company is part of the Jahangir Siddiqui (JS) Group. JS Bank Limited holds ~85% shareholding in the Company. JS Group has a strong presence in the financial sector with entities operating in the banking, insurance, brokerage, and asset management sectors. The group has recently ventured into energy infrastructure and OMC segments. JS Investments possesses licenses for Asset Management Services, Investment Advisory, Private Equity, Venture Capital services, and REIT management. The Company is headed by Ms. Iffat Zehra Mankani. She possesses over 20 years of global experience in both public and private markets across multiple asset classes.
The Company’s board of directors comprises eight members including the Chief Executive Officer. The board is dominated by representatives of JS Bank Limited and Jahangir Siddiqui & Company Limited. The board has three independent directors while all the other directors are non-executive directors. The board members possess strong profiles and skills suited to the financial services industry. Assets under management of the Company stood at ~PKR 58.5bln at the end of Nov'23.