The Pakistan Credit Rating Agency Limited
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Madiha Sohail

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PACRA Maintains Stability Rating of JS Cash 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 Cash Fund (or the 'Fund') is a low-risk profile Fund. The objective of the Fund is to invests in low risk, short-term instruments including Government Securities to provide a regular and reasonable return to investors while ensuring high liquidity. The Fund shall invest primarily in short duration instruments and may even hold some or all of its assets in cash for the purpose of maintaining liquidity. The assigned rating reflects the Fund's low credit and interest rate risk profile emanating from its investment strategy. As of Jun'23, the Fund had allocated ~53.53% of assets in PIBs, ~28.36% in T-Bills, ~1.72% of cash in mainly AA and above rated banks and ~14.42% in AA and above rated Corporate Sukuk. At the end-Jun'23, the WAM and duration stood at 62 days; limiting the exposure to credit risk and interest rate risk. The unit holding pattern of the Fund is highly concentrated with the top ten investors representing ~85.88% of the Fund's assets at the end of Jun'23; exposing the Fund to high level of redemption pressure. However, strong credit quality of asset allocation bodes well for managing the credit risk and provides comfort to manage the redemption pressure. During FY23, the Fund remained compliant with the credit quality criteria barring a minor deviation in early FY23. The Fund's performance remained in line with peers during FY23 and gave an annualized return of 17.58%.
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.