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PACRA Maintains Stability Rating of JS Income Fund

December 6, 2018

Lahore, December 06, 2018 (PPI-OT): JS Income fund aims to preserve investors’ capital while providing a regular stream of current income on an annual basis which is higher than that offered by commercial banks on deposits of a similar liquidity profile as this fund. The fund operates a diverse portfolio of investment-grade debt securities, government securities and money market instruments. The fund may maintain liquidity in the form of spread transactions and bank deposits.

The rating reflects the fund’s good credit quality and liquidity profile emanating from sizeable allocation of assets in daily cash balances. At end Jun-18, the portfolio comprised cash balances (~43%) with majority of exposure with ‘A-‘ and ‘AA+’ rated banks. The remaining assets of the fund were invested with TFCs and Sukuks (~45%). At end Jun-18, fund’s weighted average maturity stood at ~2.4 years. The unit holding pattern of the fund is highly concentrated with the top ten investors representing 65% of the portfolio making the fund vulnerable to redemption pressure.

Going forward, the fund intends to take exposure in an optimal mix of sovereign fixed income instruments, placements with high rated financial institution and TFCs having credit rating of ‘A-‘ and above. 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.

For more information, contact:
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425

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