The Pakistan Credit Rating Agency Limited
22-Mar-18
Analyst
Ayesha Qasim
ayesha.qasim@pacra.com
+92-42-35869504
www.pacra.com
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Related Research
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PACRA Assigns Initial Stability Rating to JS Cash Fund
| Rating Type | Stability Rating | |
|
Current (22-Mar-18 ) |
||
| Action | Initial | |
| Long Term | AA+(f) | |
| Short Term | - | |
| Outlook | Stable | |
| Rating Watch | - | |
The fund mandate is to generate return by investing in low risk short-term fixed instruments, to provide a reasonable return to investors while ensuring high liquidity.
The rating reflects the fund's low risk profile emanating from sizeable allocation of assets towards highly liquid, low credit risk avenues. At end-Dec-17, the portfolio comprised cash balances (66%) and bank placements (10%) with majority of Exposure with AA and above rated banks. The remaining assets of the fund (i.e. 24%) were invested in T-bills. Average duration of the fund at end Dec-17 stood at 20 days; maximum duration at a quarter end during CY17 was 37 days. The unit holding pattern of the fund is highly concentrated with the top 10 investors representing around 74% of portfolio.
Going forward, the fund intends to maintain investing strategy towards high liquidity and low credit risk mainly in form of AA rated banks and government securities with duration not exceeding 45 days. Material changes in the fund's asset allocation strategy, which could negatively impact the fund's credit quality and exposure to interest rate risk, remains critical for the rating. PACRA would monitor performance against agreed parameters on bi-annual basis.
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 18 open-end mutual funds and 6 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 include 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. Mr. Asim Ilyas is the fund manager of JS cash fund for four years.