Analyst
Shahzaib Khalid
shahzaib.khalid@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
PACRA Maintain Entity Ratings of JS Income Fund
Rating Type | Stability Rating | |
Current (30-Jun-18 ) |
Previous (12-Jul-17 ) |
|
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 good credit quality and liquidity profile emanating from the sizeable allocation of assets in daily cash balances. At end-Dec 17, the portfolio comprised cash balances (59%) with the majority of exposure with 'A-' and 'AA-' rated banks. The remaining assets of the fund (i.e. 35%) were invested with TFCs. 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 a 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 P
About
the Entity
Incorporated in 1995 and listed on PSX since April 24, 2007, JS Investments Limited is a private sector asset management company in Pakistan. It is a subsidiary of JS Bank Limited - 65% shareholding at end-Dec17. JS Bank, has a country-wide network of 323 branches (at end-Dec17). It carries a long-term rating of "AA-" and short-term rating of "A1+" by PACRA. JS Investments is managing 13 open-end mutual funds and 2 pension schemes with collective AUMs of PKR 12,316mln at end-Dec-17.
JS Investment’s board of directors comprises eight members - including CEO. The board structure includes two group representatives, four representatives of the sponsoring bank and an independent director. The CEO Mr. Hasnain Raza Nensey, has an aggregate work experience of over two decades, mainly in the Financial Industry in Pakistan.