Analyst
Madiha Sohail
madiha.sohail@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
PACRA Maintains Stability Rating of JS Microfinance Sector Fund
Rating Type | Stability Rating | |
Current (12-Jun-23 ) |
Previous (12-Dec-22 ) |
|
Action | Maintain | Maintain |
Long Term | A(f) | A(f) |
Short Term | - | - |
Outlook | Stable | Stable |
Rating Watch | - | - |
JS Microfinance Sector Fund (or the "Fund") is a medium risk profile fund. The assigned rating indicates capacity of the Fund to withstand any economic crunch. The investment policy holds that JSMFSF aims to provide investors with competitive & attractive returns while providing comparatively higher returns than the traditional banking channels. At the end of Mar'23, the Fund had allocated ~97.8% of assets in Banks whereas remaining was invested in Others. Considerable holding in cash and bank balances strengthens the liquidity profile of the Fund. At the end Mar'23, the WAM was 1 day; limiting the exposure to credit risk while duration was 1 day; limiting the exposure to interest rate risk. The top 10 investors concentration of the Fund, at Mar’23 was ~90.09%, giving rise to a high level of redemption pressure.
Going forward, the Fund aims to provide income enhancement by investing in prime quality Microfinance sector products, Microfinance bank deposits and short-term Money Market instruments. 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 34.2bln at end Mar'23.