The Pakistan Credit Rating Agency Limited
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Madiha Sohail

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PACRA Maintains Stability Rating of JS Islamic Income Fund

Rating Type Stability Rating
(05-Apr-23 )
(29-Sep-22 )
Action Maintain Maintain
Long Term AA-(f) AA-(f)
Short Term - -
Outlook Stable Stable
Rating Watch - -

JS Islamic Income Fund (the "Fund" or "JSIIF") is a medium-risk profile fund. The investment policy holds that the Fund will invest in Shariah Compliant Authorized Investments only. At the end of Dec'22, the total cash balances consisted of ~69.9% of the fund's net assets. The cash is invested in primarily 'A+' and 'AA-' rated banks. Moreover, the Fund had invested ~20.6% of net assets in Sukuks primarily rated 'AA' and above. The Sukuk portfolio includes ~7.7% allocation in GoP Ijara Sukuks whereas the remaining was invested in others. Considering the investment in longer term corporate bonds, the WAM of the Fund stood at 423 days at the end of Dec'22, exposing the Fund to credit risk. Whereas, the duration stood at 29 days; limiting the exposure to interest rate risk. The top 10 investors' concentration of the Fund, at Dec’22 was ~92.49%, giving rise to a high level of redemption pressure
Going forward, The Fund may also want to decrease the concentration in its unit holding pattern. 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, Venture Capital services and REIT management. The Company is headed by Ms. Iffat Zehra Mankani. She possess over 20 years of global experience in both public and private markets across multiple asset classes.
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 stood at ~PKR 44bln at end Dec'22.

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.