Press Release

JCR-VIS Revises Fund Stability Rating of ABL Income Fund to ‘A(f)’

Karachi, December 31, 2015: JCR-VIS Credit Rating Company Limited (JCR-VIS) has revised the Fund Stability Rating of ABL Income Fund (ABL IF) to ‘A(f)’ (Single A(f)) from ‘A+’ (Single A plus(f)). Last rating action was taken on October 16, 2014.

ABL Income Fund (ABL-IF) is an open end fund launched in September 2008. The operational policy of the fund asserts that a quarter of assets must be deployed in cash and near cash instruments. Furthermore, TFC & Sukuk exposure and reverse repo against the same have been separated during the year. Spread transaction including Margin Trading System is also included with allowable allocation of 0-10%.

Asset mix experienced considerable variation in FY15. On month-end average basis, 21% assets were deployed in cash and bank balances. This allocation was increased at end-FY15 to 50% in order to gain advantage of attractive rates offered by banks. Average sovereign and corporate debt exposures equaled 56% and 10%, respectively during the year.

Compared to previous year, the fund exceeded internal duration limits on multiple occasions during the year. This increases market risk of the fund which may lead to a negative revaluation of the underlying assets in case there is a hike in discount rate, going forward. Given that the weighted average maturity and duration has surpassed JCR-VIS’s internal criteria, the risk profile of the fund is no longer commensurate with the previous outstanding rating.

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

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 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 December 31, 2015 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.