Press Release

VIS reaffirms Fund Stability Rating of Askari Sovereign Yield Enhancer

Karachi, November 26, 2019: VIS Credit Rating Company Limited (VIS) has reaffirmed Fund Stability Rating of Askari Sovereign Yield Enhancer (ASYE) at ‘A+(f)’ (Single A Plus (f)). The previous rating action was announced on July 05, 2018.

ASYE is managed by Pak Oman Asset Management Limited (POAML) since 2018; prior to this, ASYE was managed by Askari Investment Limited. Based on the constitutive document of ASYE, the fund is restricted to place a minimum 70% of net assets in government securities and placing a minimum 25% of net assets as cash or cash equivalents to ensure adequate liquidity. Average asset allocation of the fund (based on month-end averages) in T-Bills has remained on the higher side, while proportion of assets in PIBs has also increased in FY19. The same impacted the weighted average time to maturity (WATM) of the portfolio which was reported at 1.4 years at end-June 2019, which remained compliant with its IPS but exceeded VIS benchmarks. Sensitivity to interest rate movements increased during the year as duration stood at 0.76 years at end-FY19 vis-à-vis 0.09 years in FY18. On month-end average basis, a large portion of funds were parked in government paper while almost 13% of assets were deployed in cash. The fund remained compliant with our benchmarks with investments in instruments rated A+ or above.

In terms of fund size, ASYE has witnessed a downward trend as AUMs declined from Rs. 176.5m at end-May 2018 to Rs. 167.2m at end-June 2019 on account of higher redemptions from retail clients. The fund must ensure granularity as retail clientele stands to be on the lower side.

For further information on this rating announcement, please contact the undersigned (Ext: 207) at 021-35311861-66 or fax to 021-35311872.

Jamal Abbas Zaidi

Applicable Rating Criteria: Methodology - Fund Stability Ratings (December 2017)

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