Press Release

JCR-VIS reaffirms Fund Stability Rating of Meezan Sovereign Fund at AA(f)

Karachi, January 12, 2016: JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the Fund Stability Rating of Meezan Sovereign Fund (MSF) at ‘AA(f)’ (Double A(f)). The previous rating action was announced on October 28, 2014.

MSF, as per constitutive documents, is required to place a minimum 70% of net assets in government issued Shari'ah compliant fixed income securities. As such, the potential upside of returns is limited due to a low interest rate environment. As such, the fund faced significant redemptions during the year. While there is no limit on duration, all Shari’ah compliant instruments available in the market carry returns pegged with market benchmark rates and are re-priced periodically. Funds exposure to price risk emanating from changes in interest rates remains manageable. Fund returns showcased volatility throughout the year due to the unstable nature of GoP Ijarah Sukuk prices which inherently stems from the demand-supply factors of the asset. Redemption risk remains manageable due to the liquid nature of assets held by the fund.


For further information on this rating announcement, please contact Mr. Javed Callea (Ext: 501) or the undersigned (Ext: 516) at 35311861-70 or fax to 35311872-3.



Jamal Abbas Zaidi
Advisor

Applicable rating criteria: Fund Stability Ratings (February 2012)

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 January 12, 2016 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.