The Pakistan Credit Rating Agency Limited
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Ayesha Qasim

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PACRA Maintains Stability Rating of JS Islamic Income Fund

Rating Type Stability Rating
(30-Oct-19 )
(02-May-19 )
Action Maintain Maintain
Long Term AA-(f) AA-(f)
Short Term - -
Outlook Stable Stable
Rating Watch - -

The rating reflects the fund's good credit quality, robust liquidity and low exposure to interest rate volatility. The fund adheres to conservative duration limit, and kept the duration below 45 days, in the last 2 quarters. At end-Jun'19, 74% of the fund's assets were palced with banks rated AA- and above while 22% of assets were invested in sukuks. The fund's unit holding pattern has high concentration with top 10 investors representing 88% of the net assets which exposes the fund to redemption pressure.
Going forward, the management of the fund intends to increase it's exposure towards bank placements while reducing the allocation in sukuks. 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 was incorporated in 1995 and listed on the Pakistan Stock Exchange since April 24, 2007. It is one of the oldest private sector asset management company in Pakistan and rated AM2 by JCR. JS Bank Limited owns ~65% of JS Investments Limited. JS Bank Limited carries a long-term rating of 'AA-' and short-term rating of 'A1+' by PACRA. JS investments has a diversified fund slate consisting of twelve open-end funds and two voluntary pension funds. The assets under management were ~PKR 19.07 bln at end-Jun'19.

The board of JS Investment Limited comprises eight members including the Chief Executive Officer. The board comprises two independent directors, one executive, and 5 non-executive directors. The Chairman Mr. Kamran Jafar is the Deputy CEO of JS Bank Limited, a seasoned banker with twenty years of a proven track record in banking. In the year 2016, he joined as a member of the Board of Directors of JS Investments Limited. The CEO, Mr. Hasnain Raza Nensey has profound experience in the financial industry.

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.