The Pakistan Credit Rating Agency Limited
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Madiha Sohail

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PACRA Maintains Stability Rating of JS Islamic Daily Dividend Fund

Rating Type Stability Rating
(05-Apr-23 )
(29-Sep-22 )
Action Maintain Maintain
Long Term AA(f) AA(f)
Short Term - -
Outlook Stable Stable
Rating Watch - -

JS Islamic Daily Dividend Fund (or the "Fund") is a low risk-profile fund. The investment policy holds that the Fund will invest in Shariah Compliant Authorized Investments only. At the end-Dec'22, the allocation in 'AAA' rated bank consisted of ~99% of the fund's net assets. Moreover, the Fund had invested ~1% of net assets in Others. Considerable holding in cash and bank balances enforce the liquidity profile of the Fund. Resultantly, the WAM stood at 1 day; limiting the Fund to credit risk whereas the Duration of Fund is low and it was recorded at 1 day at end-Dec'22; limiting the Fund's exposure to interest rate risk. The top 10 investors concentration of the Fund, at Dec’22 was ~91.0%, keeping redemption pressure to high level.
Going forward, the Fund may further diversify its asset allocation to ensure lesser concentration risk, depending on market situation. The Fund may improve its unit holding pattern. Material changes in the Fund's asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk, would affect the rating.

About the Entity
JS Investments Limited is one of 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 strong presence in the financial sector with entities operating in 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 possess 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 two independent directors while all the other directors are non-executive directors. The board members possess strong profile and skills suited to the financial services industry. Assets under management of the Company stood at ~PKR 44bln at end Dec'22.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.