Press Release

JCR-VIS Reaffirms Fund Stability Rating of PICIC Islamic Income Fund

Karachi, December 22, 2014: JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the Fund Stability Rating (FSR) of PICIC Islamic Income Fund (PIIF) at ‘A(f)’ (Single A (f)). The previous rating action was announced on August 04, 2014.

As a Shariah compliant income fund, PIIF’s investable universe of assets is restricted to securities/counterparties that are approved by the Shariah advisor. Moreover, the investment policy of the fund only allows for investment in issues/issuers rated ‘A’ or above, with portfolio duration targeted at 2 years (preferably not more than 365 days).

Size of the fund has declined substantially, post launch. Asset allocation has remained aligned with the investment policy, with funds largely deployed with banks and DFIs. Some exposure in corporate Sukuk has been built in recent months, which has increased the weighted average maturity of the portfolio, though still remaining well within policy limits. The fund manager is looking to build the corporate Sukuk portfolio further.

PIIF is exposed to reinvestment rate risk, which has heightened lately, as is the case with other Islamic income funds. Inability to lock-in returns over the long term means that returns will remain under pressure if the policy rate declines further.

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

Jamal Abbas Zaidi
Deputy CEO

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 2014 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