The Pakistan Credit Rating Agency Limited
12-Jul-17
Analyst
Mohsin Naseer
mohsin.naseer@pacra.com
+92-42-35869504
www.pacra.com
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Related Research
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PACRA Maintains Stability Rating of JS Islamic Government Securities Fund
| Rating Type | Stability Rating | |
|
Current (12-Jul-17 ) |
Previous (30-Dec-16 ) |
|
| Action | Maintain | Maintain |
| Long Term | AA-(f) | AA-(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
The investment mandate of the fund is to generate stable return for its unit holders while ensuring capital preservation by primarily investing in Shariah compliant government securities.
The rating reflects the fund's low risk profile which emanates from its investment philosophy of maintaining a minimum exposure of 70% in Shariah compliant government securities (Ijarah Sukuks). At end-May17, fund's exposure with Government securities was 73%, while remaining net assets were kept with banks rated 'A+' (24%) & above. The monthly averages remained of Government securities exposure and average durations remained within the assigned parameters. Durations of the fund stood at 1.1 years. Fund's unit holding pattern depicts redemption pressure as 96% of the fund's assets were invested with top 10 investors at end-May17
Going forward, the fund intends to maintain exposure towards government securities (70%) and cash balances (30%) with duration not exceeding 2 years. Material changes in the fund's asset allocation strategy, which could negatively impact the fund's credit quality and exposure to interest rate risk, remains critical for the rating. PACRA would monitor performance against agreed parameters on monthly average basis.
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.