Press Release

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

Karachi, January 12, 2016: 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)). The previous rating action was announced on October 28, 2014.

MSF, as per constitutive documents, is required to place a minimum 70% of net assets in government issued Shari'ah compliant fixed income securities. As such, the potential upside of returns is limited due to a low interest rate environment. As such, the fund faced significant redemptions during the year. While there is no limit on duration, all Shari’ah compliant instruments available in the market carry returns pegged with market benchmark rates and are re-priced periodically. Funds exposure to price risk emanating from changes in interest rates remains manageable. Fund returns showcased volatility throughout the year due to the unstable nature of GoP Ijarah Sukuk prices which inherently stems from the demand-supply factors of the asset. Redemption risk remains manageable due to the liquid nature of assets held by the fund.


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



Jamal Abbas Zaidi
Advisor

Applicable rating criteria: Fund Stability Ratings (February 2012)

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