Press Release

JCR-VIS reaffirms Fund Stability Rating of Meezan Sovereign Fund at AA(f)

Karachi, December 30, 2016: JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the Fund Stability Rating of Meezan Sovereign Fund (MSF) at ‘AA(f)’ (Double A(f)). Previous rating action was announced on January 12, 2016.

Majority of the assets remained vested with Shariah compliant Government of Pakistan (GoP) Ijarah year on year. However, during the year the fund was not able to maintain the same due to dearth of Shariah Compliant issues in the market. Returns of the fund were volatile, attributable to price movements of Sukuks owing to demand-supply mismatch. Since majority of GoP fixed income instruments are floating rates; portfolio’s sensitivity to interest rate fluctuations remained manageable.

The fund’s concentration has improved minutely, however it continues to be significant with 62% of the fund being held by top ten investors. Furthermore, retail proportion shrank to 28% (FY15: 36%) as evidenced by the contracted number of retail investors. Given the sizeable liquid assets in the portfolio, liquidity risk continues to be manageable.

For further information on this rating announcement, please contact Mr. Jamal Abbas Zaidi (Ext: 207) or the undersigned (Ext: 201) at 35311861-70 or fax to 35311872-3.

Javed Callea

Applicable rating criteria: Fund Stability Ratings (February 2012)

Information herein was obtained from sources believed to be accurate and reliable; however, JCR-VIS Credit Rating Company Limited (JCR-VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. JCR-VIS, the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report. JCR-VIS is not an NRSRO and its credit ratings are not NRSRO credit ratings. JCR-VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2016 JCR-VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to JCR-VIS.

JCR-VIS Credit Rating Company Limited