Press Release

JCR-VIS reviews its ratings in the Mutual Funds Sector

Karachi, December 29, 2008: JCR-VIS Credit Rating Company Limited considers the mutual fund sector to be under considerable stress in view of the prevailing conditions in the capital markets. Even after the removal of floor price levels on the stock exchange, volumes remain limited, not providing the investors any opportunity to off load their positions and exit the market. In response to this, fund managers have voluntarily continued suspension of issuance and redemption of mutual funds’ units with equity exposures, even after the expiry of the SECP directive on suspension.

JCR-VIS believes that the current state of capital markets has incapacitated the fund managers and it is difficult to assess either true performance of funds under management or fund manager’s ability. In view of this, JCR-VIS has revised the Management Quality Rating of the following AMCs to ‘AM-DS’ (AM - Developing Situation), defined as ‘unusual circumstances do not allow assessment of fund management practices at present’.


AKD Investment Management Ltd.
Previous Rating: AM3+
Current Rating: AM-DS

Al-Meezan Investment Management Ltd.
Previous Rating: AM2
Current Rating: AM-DS

AMZ Asset Management Ltd.
Previous Rating: AM3-
Current Rating: AM-DS

Crosby Asset Management (Pakistan) Ltd.
Previous Rating: AM4-
Current Rating: AM-DS

Faysal Asset Management Ltd.
Previous Rating: AM3+
Current Rating: AM-DS

National Fullerton Asset Management Ltd.
Previous Rating: AM2
Current Rating: AM-DS

National Investment Trust Ltd.
Previous Rating: AM2
Current Rating: AM-DS

UBL Fund Managers Ltd.
Previous Rating: AM2-
Current Rating: AM-DS

MQ ratings of these management companies will be revisited once the suspension has been removed.

Furthermore, JCR-VIS has also placed Fund Stability Ratings of the following income funds under ‘Rating Watch-Developing’ Status.

AKD Income Fund.
Current Rating: A-(f)

AMZ Plus Income Fund
Current Rating: BBB+(f)

BMA Chundrigar Road Savings Fund
Current Rating: A(f)

Meezan Islamic Income Fund
Current Rating: A(f)

NAFA Cash Fund
Current Rating: A(f)

Pak Oman Bank Of Punjab Advantage Plus Fund.
Current Rating: A(f)

United Growth & Income Fund
Current Rating: A(f)

United Money Market Fund
Current Rating: A+(f)

Large withdrawals within the income fund category have reduced the amount of liquid assets earlier carried by these funds and the proportion of long term bonds in relation to net assets has increased considerably. Concentration related risks have been aggravated by the reduced marketability of most assets carried on books. Income funds also experienced revaluation losses in November 2008, as discounts were applied to the value of TFCs and Sukuks carried in their portfolios, as per a SECP issued directive.

As previously communicated by JCR-VIS in its October 2008 press release, rankings for funds invested in equities will only be updated when market conditions normalize.

For further information on these rating announcements, please contact Ms. Sabeen Saleem (Ext: 510) or Ms. Sobia Maqbool (Ext: 506) at 5311861/5311862/5311863 or fax to 5311873.



Safdar Kazi
Director

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 2008 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .