Press Release

JCR-VIS Reaffirms Fund Stability Rating of HBL Income Fund at A(f)

Karachi, January 01, 2013: JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has reaffirmed Fund Stability Rating of HBL Income Fund (HBLIF) at ‘A(f)’ (Single A(f)). The fund is managed by HBL Asset Management Limited.

At end-Nov’12, around 64.5% of total assets of the fund were invested in government securities. Holding of the fund in TFCs has reduced over time to 31% of total assets at end-Nov’12 and is within the target allocation of 30-35% envisaged for this avenue. While instances of non-performance in TFCs holding have been witnessed over the life of the fund, performance of the fund has depicted consistency and compared favorably against most of its peers over the past three years. There has been weakening in relative return ranking of the fund in the on-going year on account of provisioning against a non-performing asset. Net non-performing assets comprised 2% of net assets at end-Nov’12.

With expectations of decline in interest rates, the fund had built exposure in PIBs, comprising 7% of total assets at end-Nov’12. The same has been offloaded in Dec’12. Remaining exposures in the fund either have maturity of less than a year or returns on those instruments are reset to market rates after every six months; thus, limiting exposure to interest rate risk. However, there is price risk on the TFCs holding emanating from low trading volumes in the secondary debt market.

Net assets of the fund stood at Rs. 1.8b at end-Nov’12. Investor profile features concentration; however, sizeable investor in the fund is the parent bank of HBL AMC and its holding has remained stable over the years. In view of this, the fund manager has the flexibility to implement the envisaged investment strategy for the fund.

For further information on this rating announcement, please contact Mr. Javed Callea (Ext: 501) or Ms. Sobia Maqbool, CFA (Ext: 604) at 35311861-70 (10 lines) or fax to 35311872-3.




Jamal Abbas Zaidi
Deputy CEO

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 2012 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .