PACRA Maintains Stability Rating of JS Islamic Daily Dividend Fund
|Rating Type||Stability Rating|
The assigned rating reflects adequate strength of the fund's credit and interest rate risk profile emanating from its investment strategy to invest in adequate credit quality (at least 'AA' and above) and shorter duration investment avenues having sound liquidity. At end Dec'20, the fund had placed ~86% of its assets with a commercial Islamic bank rated 'AA'. Remaining assets were invested in short term Sukuk and ICP rated 'AA'. As per the investment policy guidelines, the fund shall place minimum 10% of assets in Cash and Cash equivalents: Shariah compliant Government Securities within 90 days maturity and cash with Islamic banks/Windows of Islamic Banks. This is expected to allow the fund to maintain a strong liquidity profile. The weighted average time to maturity of the fund shall not exceed 90 days and the maturity of any single asset shall not exceed 6 months, it limits the funds exposure to interest rate risk. Benchmark return of fund will be the 3-month average deposit rate of 3 'AA' rated Islamic banks/Islamic windows of conventional banks. Fund's unit holding pattern is highly concentrated with top 10 investors representing ~100% of the net assets; however, liquid nature of investments provide some comfort.
Going forward, the fund will invest in accordance with its authorized investment policy keeping under consideration the market expectations. Material changes in the fund's asset allocation strategy, impacting it's credit quality and/or exposure to interest rate risk, would affect the rating.
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.