Karachi, December 29, 2017 (PPI-OT):JCR-VIS Credit Rating Company Limited (JCR-VIS) has revised the Fund Stability Rating of Meezan Sovereign Fund (MSF) to ‘AA- (f)’ (Double A Minus (f)) from ‘AA (f)’ (Double A (f)). Previous rating action was announced on December 30, 2016.
Rating action incorporates higher exposure to market risk assumed by the fund which is not commensurate with JCR-VIS’s benchmark for the assigned rating. Duration of the fund has consistently exceeded the 90 day criteria for a AA rated fund. Moreover, the fund has also taken exposure in A+ rated investment avenue which is not in compliance with credit risk criteria for a AA rated fund.
MSF operates as an open-end Shariah compliant sovereign fund. The offering document requires the fund to maintain a minimum 70% of net assets in government backed/issued securities. Barring two exceptions, the fund has remained compliant with the stipulated limit over the review period. At end-June’2017, net assets of the fund declined to Rs. 4.3b (FY16: Rs. 7.9b) owing to redemptions by associates. However, Assets under Management (AUM) profile improved with increase in proportion of retail AUMs and reduction in unit holder concentration.
For more information, contact:
JCR-VIS Credit Rating Company Limited
VIS House, 128/C,
25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi