Analyst
Ayesha Qasim
ayesha.qasim@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
PACRA Maintains Stability Rating of JS Income Fund
Rating Type | Stability Rating | |
Current (12-Jul-17 ) |
Previous (09-Dec-16 ) |
|
Action | Maintain | Maintain |
Long Term | A+(f) | A+(f) |
Short Term | - | - |
Outlook | Stable | Stable |
Rating Watch | - | - |
The objective of the fund is to achieve a higher rate of income along with safety of capital for its unit holders by investing in a diversified portfolio of high quality fixed income and money market instruments.
The rating reflects the investment philosophy of the fund. The rating reflects the fund's strong credit quality and sound liquidity profile emanating from sizeable allocation of assets in daily cash balances. At end-May 17, the portfolio comprised cash balances (64%) and bank placements (23%) with majority of exposure with 'A+' rated banks. The remaining assets of the fund (i.e. 5.92%) were invested with TFCs followed with MTS (5.58%) transactions, which due to its self-liquidating nature possess less risk over the short tenure. The unit holding pattern of the fund is highly concentrated with the top10 investors representing almost entire portfolio making the fund vulnerable to redemption pressure.
Going forward, the fund intends to take exposure in an optimal mix of sovereign fixed income instruments, term and daily placements with higher rated financial institution and good quality TFCs having credit rating of 'A' and above. 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.
Draft
About
the Entity
Incorporated in 1995 and listed on PSX since April 24, 2007, JS Investments Limited (JSIL) is a private sector asset management company in Pakistan. JSIL is a subsidiary of JS Bank Limited - 65% shareholding at end-Dec16. JS Bank, in operations since December 2006, has a country-wide network of 307 branches (at end-Dec16).It carries a long-term rating of "AA-" and short-term rating of "A1+" by PACRA. The company has recently launched a capital protection scheme. JSIL is managing 10 open-end mutual funds and 2 pension schemes with collective AUMs of PKR 12,665mln at end-Apr-17. The company also manages SMAs mandates amounting to PKR 1,024mln at end-Mar17.
JSIL's board of directors comprises eight members - including CEO. The board structure include two group representatives, four representatives of the sponsoring bank and an independent director. The CEO Mr. Hasnain Raza Nensey, he has an aggregate work experience of 23 years of which around 15 years has been in the Financial Industry in Pakistan.