Press Release

JCR-VIS Revises Fund Stability Rating of Meezan Islamic Income Fund

Karachi, March 16, 2012: JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has revised the Fund Stability Rating of Meezan Islamic Income Fund (MIIF) from ‘A(f)’ (Single A(f)) to ‘A-(f)’ (Single A Minus(f)). The rating denotes moderate degree of stability in returns.

While performance of the fund has remained stable in FY10 and FY11, it has been affected in the on-going year on account of provisioning against a non-performing instrument. Even with significant provisions taken against this exposure, proportion of high risk assets has not reduced over time on account of attrition in fund size. Recovery in performance of the fund in the remaining months of FY12 is dependent on timely repayment by a restructured instrument and the direction of market rates.

At end-Dec’11, around 12% of the fund was invested in cash and bank balances, followed by corporate sukuks (36%), GoP Ijarah sukuks (39%) and commercial paper (11%). Fresh exposure in income instruments during CY12 was taken in commercial paper issued by highly rated companies operating in the power generation sector. Overall credit risk profile of exposures carried in the fund is moderate. With profit rates on income instruments pegged to market rates, the fund is exposed to low price risk emanating from movement in market profit rates. However, thin volumes in the secondary market for corporate sukuks pose significant price risk.

The investor profile of the fund features concentration. The fund has sizeable holding of liquid assets. The proportion of liquid assets in context of investor concentration will continue to be tracked by JCR-VIS.

For further information on this rating announcement, please contact Mr. Javed Callea (Ext: 501) or Ms. Sobia Maqbool, CFA (Ext: 506) at 021-35311861-70 or fax to 021-35311872-3.


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 .