Lahore, July 05, 2018 (PPI-OT): JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed Fund Stability Rating of Askari Sovereign Yield Enhancer (ASYE) at ‘A+(f)’ (Single A Plus (f)). The previous rating action was announced on December 30, 2016.
ASYE is managed by Pak Oman Asset Management Limited (POAML) since 2018; prior to this, ASYE was managed by Askari Investment Limited. Based on the constitutive document of ASYE, the fund is restricted to place a minimum 70% of net assets in government securities and placing a minimum 25% of net assets as cash or cash equivalents to ensure adequate liquidity. Due to movements in the discount rate, average asset allocation of the fund (based on month-end averages) has shifted to T-Bills.
The same impacted the weighted average time to maturity (WATM) of the portfolio which was reported at 0.93 years at end-May 2018, which was compliant with its regulatory framework. As such, sensitivity to interest rate movements as signified by duration also reduced at end-11MY18. On month-end average basis, a large portion of funds were parked in government paper while almost 14% of assets were deployed in cash. Based on the IPS and actual asset allocation, the rating will be constrained by any change in credit quality of the fund’s assets. Moreover, keeping duration of the fund aligned with the expected interest rate scenario would be important, going forward.
Moreover, the fund has witnessed a significant downward trend in its size; AUMs declined from Rs. 1.5b at end-June 2016 to Rs. 176.5m at end-May 2018 on account of higher redemptions from corporate clients. The fund must ensure granularity in tandem with future growth prospects.
For more information, contact:
JCR-VIS Credit Rating Company Limited
VIS House, 128/C,
25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi