Press Release

JCR-VIS reaffirms Fund Stability Rating of Meezan Sovereign Fund at AA(f)

Karachi, August 29, 2013: JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the Fund Stability Rating of Meezan Sovereign Fund (MSF) at ‘AA(f)’ (Double A (f)).

MSF is the largest fund, in terms of net assets, managed by Al Meezan Investment Management Limited. Net assets of the fund have depicted low volatility. At end-FY13, net assets of the fund stood at Rs. 19.7b. In line with the investment policy, at least 70% of net assets have to be invested in government securities while remaining exposure will primarily be maintained as cash and bank balances with banks having rating in the ‘AA’ band. Duration of the fund is targeted at less than 90 days while weighted average time to maturity of the fund is capped at 4 years.

Actual asset allocation of the fund has remained aligned with the investment policy. At end-FY13, 72% of the net assets were invested in GoP Ijarah Sukuk. Duration and weighted average maturity of the fund continues to remain within the investment policy threshold. Shorter duration of the fund translates into low interest rate risk. Moreover, credit risk of MSF is considered minimum given that the fund has been structured as a government securities fund. Investor concentration in MSF has improved on a timeline basis.

GoP Ijarah Sukuk carried in the fund are not marked to market. The management has attributed this to non-availability of recent price data for GoP Ijarah Sukuk on account of lack of trades in the secondary market. The matter of pricing of GoP Ijarah Sukuk is being considered at industry level; it may have some impact on reported NAVs.

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 2013 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .