JCR-VIS assigns initial Fund Stability Rating of Askari High Yield Scheme at A(f)

Karachi, December 31, 2015 (PPI-OT): JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has assigned initial Fund Stability Rating of Askari High Yield Scheme (AHYS) at ‘A(f)’ (Single A (f)). AHYS (formerly Askari Income Fund) operates as an aggressive income fund since 2007. As per regulatory limits, the fund may take exposure in riskier assets such as commercial paper and margin trading systems (MTS). More so, the fund is only required to maintain lower liquidity at 10% of net assets. Asset allocation of the fund was primarily split between private and public fixed income securities. The former comprises Sukuks and TFCs issued by stable entities.

There has been a change in the composition of public securities’ holdings as the fund shifted investment from Treasury Bills (T-Bills) to Pakistan Investment Bonds (PIBs). This change has impacted the weighted average time to maturity (WATM) of the portfolio which jumped to 3.70 years at end-FY15 (July’14: 2.01 years) and increased sensitivity to interest rate changes as signified by duration which more than doubled to 2.62 years at end-FY15 (July’14: 1.24 years) still compliant with its regulatory framework.

Net assets of the fund remain strong increasing to Rs. 4b at end-FY15 (FY14: Rs. 3.6b) and further to Rs. 5.2b by Oct’15. Retail proportion showcased growth over the period to 23.1% of net assets at end-FY15 (FY14: 19.5%) due to the potential upside of higher returns.

The fund holds several non-performing assets which are fully provided for. Reversals in any of these can provide the fund with unexpected high returns. The fund further holds properties and ordinary shares, provided in lieu of non-performing investments. The same are being liquidated.

For more information, contact:
Ms. Sobia Maqbool
CFA
JCR-VIS Credit Rating Company Limited
VIS House, 128/C,
25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi
Tel: +92-21-35311861-72
Fax: +92-21-35311873
Email: sobia@jcrvis.com.pk

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