Press Release

JCR-VIS Reaffirms Fund Stability Rating of ABL Government Securities Fund at A+(f)

Karachi, August 13, 2014: JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the Fund Stability Rating of ABL Government Securities Fund (ABL GSF) at ‘A+(f)’ (Single A Plus(f)).

As a Government Securities Fund, ABL GSF’s investment policy restricts exposures to either government paper, reverse repo against the same and bank deposits; previously allowed exposure to corporate debt instruments has been eliminated from the policy document. Actual exposure in government paper averaged almost three-fourths of the fund’s assets during FY14, with minimum exposure at any month-end being 53%. Other exposures are subject to minimum counterparty rating of ‘AA-’. Accordingly, the fund’s exposure to credit risk is considered low.

The AMC has extended the target duration of the fund from 1 year to 2 years; actual duration has also trended upwards, recorded at 509 days at end June 2014, as the fund has built substantial exposure in PIBs. This has increased the fund’s exposure to interest rate risk and adverse movement in market benchmark rates could affect the valuation of portfolio holdings. Given the interest rate volatility in the market in the past and its impact on bond prices, JCR-VIS will continue to monitor the fund’s duration for impact on the fund’s risk profile.

For further information on this rating announcement, please contact the undersigned (Ext: 501) or Ms. Sobia Maqbool, CFA (Ext: 604) at 021-35311861-70 or fax to 021-35311873.

Javed Callea
Advisor

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 August 13, 2014 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.