Press Release

JCR-VIS Reaffirms Management Quality Rating of JS Investments Limited

Karachi, August 20, 2014: JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has reaffirmed the Management Quality Rating of JS Investments Limited (JSIL) at ‘AM2-’ (AM-Two Minus) with a ‘Stable’ Outlook.

In 2014, the company maintained its market share at about 3.6%; funds under management are invested in equities, fixed income securities, index constituents or other mutual funds, in line with their respective mandates. Two of the mutual funds, having limited size, are proposed to be merged into another fund, following which number of mutual funds under management (FUM) will reduce to 9. In relation to peers, the performance of equity/aggressive asset allocation/balanced FUMs has largely remained favorable. Returns of income/cash funds have declined in line with market benchmark rates; returns are largely in line with peers. Tracking error of index fund reduced while return of fund-of-funds improved as allocation to equity schemes was enhanced. The investment management team is supported by research function while compliance and risk, as a combined function, monitor various aspects pertaining to regulations and market risk. Scope of risk management may be enhanced, going forward.

Earlier in FY14, JSIL experienced a change at the helm, with Dr. Ali Akhtar Ali assuming the office of Chief Executive Officer; he was previously serving as the Chief Investment Officer (CIO) of the company. Following this change, the position of CIO is currently vacant. The company also experienced turnover at the position of Head of Internal Audit; currently an in-house resource has been assigned an acting charge while the company is looking to hire a permanent resource. Hiring has also been undertaken in research function. Stability in management team is considered essential.

The management’s focus is geared towards strengthening the retail outreach of the sales team to grow its existing funds; additional funds are not planned to be launched. Recent changes at the regulatory level further underscore the importance of tapping the retail market to develop a sustainable investor base. Additional resources are being hired by JSIL to reach out to its target market. In addition to the development of in-house sales team, progress has also been made recently in finalizing modalities for enhancing the utilization of the parent bank’s network for generating sales. JCR-VIS will continue to monitor the results of these initiatives.

For further information on this rating announcement, please contact Mr. Javed Callea (Ext: 501) or Ms. Sobia Maqbool, CFA (Ext: 604) at 35311861-70 or fax to 35311872-3.

Jamal Abbas Zaidi
Deputy CEO

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited 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.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.VIS is not an NRSRO and its credit ratings are not NRSRO credit ratings.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 2014 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.

JCR-VIS Credit Rating Company Limited