Press Release

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

Karachi, January 12, 2016: JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has reaffirmed the Fund Stability Rating (FSR) of Meezan Islamic Income Fund (MIIF) at ‘A-(f)’ (Single A Minus(f)). The previous rating action was announced on October 29, 2014.

Based on the low interest rate environment present and the limited yield on investment available in government issued Shari'ah compliant fixed income securities, the fund has re-allocated a portion of assets (based on month-end averages) towards Corporate Sukuks. The fund maintains a minimum counter party credit rating of ‘A-’ for investments. To ensure adequate liquidity levels, almost 50% of net assets have been held as cash and cash equivalents. As on the re-pricing model of Shari'ah compliant sukuks, MIIF’s exposure to price risk emanating from changes in interest rates remains manageable. The fund holds non-performing assets which have been fully provided for. Reversal in any can provide a positive boost in returns.

Re-alignment of portfolio mix has significantly increased weighted average time to maturity (WATM); though well below limits placed in constitutive document. Returns of the fund have slightly dropped during the year, reducing relative ranking as compared to peers. However, retail penetration has shown significant improvement, driving growth in total number of investors and improving concentration levels.

For further information on this rating announcement, please contact Mr. Javed Callea (Ext: 501) or the undersigned (Ext: 516) at 021-35311861-70 or fax to 021-35311872-3.



Jamal Abbas Zaidi
Advisor

Applicable rating criteria: Fund Stability Ratings (February 2012)

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