Karachi, December 30, 2016: JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has reaffirmed Fund Stability Rating of Askari High Yield Scheme (AHYS) at ‘A(f)’ (Single A (f)). The previous rating action was announced on December 31, 2015.
AHYS (formerly known as Askari Income Fund) functions as an aggressive income fund with the objective of generating superior returns for its investors. As per its mandate, the fund may undertake exposure in riskier assets such as commercial paper and margin trading systems (MTS).
On an average basis, a sizeable proportion of net assets were deployed in government securities, including T-bills, PIBs and GoP Ijarah Sukuk, while exposure to private TFC/Sukuks was also considerable. Exposure in riskier MTS also increased on an average basis. Management plans to maintain the credit quality of investment distribution at current levels, going forward. However, in view of flexibility available in credit quality, fund is exposed to credit risk. Sensitivity to interest rate changes improved with lower Weighted Average time to Maturity (WAM) of 2.16 years and duration of 0.16 years at end-June 2016.
Net assets of the fund increased to Rs. 5.4b (FY15: Rs. 4.0b) at end-FY16; however, subsequently decreased to Rs. 5.1b at end-November 2016. Given that AUM base and retail proportion of the fund declined, share of related parties increased to 33.0% at end-FY16 (FY15: 35.2%). The fund holds several non-performing assets which are almost fully provided for. Reversals in any of these can provide the fund with positive returns.
For further information on this rating announcement, please contact the undersigned (Ext: 207) or Mr. Javed Callea (Ext: 201) at 021-35311861-70 or fax to 021-35311873.
Jamal Abbas Zaidi
Applicable rating criterion: Fund Stability Ratings (February 2012)
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