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The Pakistan Credit Rating Agency Limited
Press Release

Date
01-Apr-21

Analyst
Afnan Iqbal
afnan.iqbal_old@pacra.com_old
+92-42-35869504
www.pacra.com

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This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA

PACRA Maintains Stability Rating of JS Cash Fund

Rating Type Stability Rating
Current
(01-Apr-21)
Previous
(19-Oct-20)
Action Maintain Maintain
Long Term AA+(f) AA+(f)
Short Term - -
Outlook Stable Stable
Rating Watch - -

The assigned rating reflects strong strength of the fund's credit, liquidity and interest rate risk profile. The fund's good credit quality and sound liquidity profile emanates primarily from its mandate to invest in government securities and other low duration avenues such as bank placement's and ensuring low exposure to interest rate risk. As per the investment policy, the fund shall invest in low risk and highly liquid, short duration assets including money market instruments. The fund may hold some or even all of its assets in cash to either provide liquidity or for defensive purposes. The time to maturity of any single asset shall not exceed six months and weighted average time to maturity of portfolio shall not exceed 90 days. At end Dec'20, ~96% of fund's assets were allocated to banks rated 'AA+' and above. Average duration of the fund remained within 45 days. Fund's unit holding pattern is highly concentrated with top 10 investors representing ~81% of the net assets; however, liquid nature of investments provide some comfort. The benchmark of the fund is 70% of three months PKRV rates + 30% three months average deposit rate of three 'AA' rated scheduled banks.
Going forward, the fund may maintain the exposure in banks depending on the prevailing market conditions. 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 and Venture Capital services. The Company has recently acquired REIT management license as well.

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 (CIS & VPS) stood at ~PKR 23,703mln at end Dec’20 and are spread across thirteen open-end mutual funds and two voluntary pension schemes. Investment platforms are provided to investors for both conventional and Islamic markets.

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.