The Pakistan Credit Rating Agency Limited
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Madiha Sohail

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PACRA Maintains Stability Rating of JS Islamic Income Fund

Rating Type Stability Rating
(05-Oct-23 )
(05-Apr-23 )
Action Maintain Maintain
Long Term AA-(f) AA-(f)
Short Term - -
Outlook Stable Stable
Rating Watch - -

JS Islamic Income Fund ( or the "Fund") is a medium-risk profile fund. The objective of the Fund is to generate stable returns and ensure capital preservation over the medium to long term, by investing primarily in quality Sukuks, Shariah-compliant Government Securities, Shariah-compliant Bank Deposits, and other Shariah-compliant debt instruments. The assigned rating reflects the Fund's moderate credit and interest rate risk profile emanating from its investment strategy. At the end of Jun'23, the Fund had invested ~83.59% in mainly AA and above rated Corporate Sukuk. Moreover, the total cash balances consisted of ~12.3% of the fund's net assets in AA and above rated banks. As of Jun'23, the WAM stood at 1,208 days; exposing the Fund to credit risk. The duration stood at 91 days; limiting the exposure to interest rate risk. However, the credit risk in high due to investment in long-term securities such as Sukuk. The top 10 investor concentration of the Fund, at the end of Jun’23 was ~81.42%, giving rise to a high level of redemption pressure.
Going forward, any material changes in the Fund's asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk, would affect the rating. Risk may vary slightly from time to time considering the volatility of economic conditions.

About the Entity
JS Investments Limited is 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 a 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 36.2bln at end of Jun'23.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.