The Pakistan Credit Rating Agency Limited
06-Dec-18
Analyst
Shahzaib Khalid
shahzaib.khalid@pacra.com
+92-42-35869504
www.pacra.com
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Related Research
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PACRA Maintains Stability Rating of JS Income Fund
| Rating Type | Stability Rating | |
|
Current (06-Dec-18 ) |
Previous (30-Jun-18 ) |
|
| Action | Maintain | Maintain |
| Long Term | A+(f) | A+(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
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.
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 eleven open-end funds and two voluntary pension funds. The AUMs are ~PKR 18bln at end-Oct'18.
The board of JS Investment Limited comprises eight members including the Chief Executive Officer. The board has one independent director, four sponsor representatives and two group representatives. The Chairman Mr. Basir Shamsie is a part of the JS Group since 1994 and is the Chairman of JS Investments Limited since 2016. The CEO, Mr. Hasnain Raza Nensey has profound experience in the financial industry.