Press Release

JCR-VIS assigns initial Fund Stability Rating of Askari Sovereign Yield Enhancer
 

Karachi, December 31, 2015: JCR-VIS Credit Rating Company Limited (JCR-VIS) has assigned initial Fund Stability Rating of Askari Sovereign Yield Enhancer (ASYE) at ‘A+(f)’ (Single A Plus (f)).

ASYE was incorporated in September 2012 as an open end Income fund. Based on the constitutive document of ASYE, the fund is restricted to place a minimum 70% of net assets in government securities including Pakistan Investment Bonds (PIBs) and Treasury Bills (T-Bills). The fund further ensures adequate liquidity management by placing a minimum 25% of net assets as cash or cash equivalents which includes government securities with a maturity of less than 90 days.

Due to downward movement in the discount rate, average asset allocation of the fund (based on month-end averages) has shifted partially from T-Bills to PIBs. The same impacted the weighted average time to maturity (WATM) of the portfolio which reached 2.61 years at end-FY15 (July’14: 1.73 years) still compliant with its regulatory framework. As such, sensitivity to interest rate movements as signified by duration has also increased by end-FY15.

ASYE is currently placed in the 3rd quartile for FY15 as compared to the 2nd quartile for the previous financial year. Shift in net assets of the fund from Rs. 1.25b at end-FY14 to Rs. 0.91b at end-FY15 has occurred due to corporate redemptions as a consequence of changes in the tax regime. Retail quantum in the fund has improved resulting in growth of net assets to Rs. 1.7b at end-Oct’15.

For further information on this rating announcement, please contact the undersigned (Ext: 516) or Jazib Ahmed, CFA (Ext: 510) at 021-35311861-70 or fax to 021-35311873.

Jamal Abbas Zaidi
Advisor

Applicable Rating Criteria: Methodology - Fund Stability Ratings (February 2012)
http://jcrvis.com.pk/Images/FSRMeth-201202.pdf

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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 2015 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