Pakistan Credit Rating Agency upgrades Stability Rating of Askari Sovereign Cash Fund

Lahore, January 30, 2013 (PPI-OT): The Pakistan Credit Rating Agency (PACRA) has upgraded the stability rating of Askari Sovereign Cash Fund (ASCF), an open-end money market fund, to ‘AAA (f)’ (Triple A ; fund rating) [Previous Rating: ‘AA+’ (f)]. The fund’s rating denotes an exceptionally strong capacity to maintain relative stability in returns and possesses negligible exposure to risks.

The mandate of the fund is to earn a reasonable rate of return with minimal risk and preservation of capital by investing in highly liquid investments.

The rating reflects the strong credit quality and robust liquidity profile of the fund emanating from the change in operational investment philosophy of the fund to maintain a minimum allocation of 75% to government securities and portfolio duration of less than 45 days. The remaining assets of the fund will be invested in avenues rated ‘AA’ and above.

The fund’s portfolio, at end Nov-12, mainly comprises government securities, T-bills around 70% and PIBs around 5%. The fund carries a duration of 44 days, which indicates low exposure towards volatility in interest rates.

The remaining assets are placed as cash (3%) and TDRs (21%) with scheduled banks rated ‘AA’ and above. The unit holding pattern of the fund is fairly concentrated with the top10 investors representing 61% of the fund’s net assets resultantly exposing the fund to redemption pressure.

The fund’s rating is dependent on allocating the net assets in a highly liquid low-risk portfolio of government securities and bank balances. A minimum exposure of 75% in government securities is required, while the remaining assets must be placed with scheduled banks having very strong credit quality; the portfolio duration has to be less than 45 days.

For more information, contact:
Hammad Rashid
Analyst
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425
Email: hammad.rashid@pacra.com
Web: www.pacra.com

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