JCR-VIS Revises Fund Stability Rating of KASB Income Opportunity Fund

Karachi, February 17, 2015 (PPI-OT): JCR-VIS Credit Rating Company Limited has revised the Fund Stability Rating (FSR) of KASB Income Opportunity Fund (KIOF) from ‘BBB-(f)’ (Triple B Minus(f)) to ‘BB+(f)’ (Double B Plus). The previous rating action was announced on May 15, 2013.

The rating revision takes into account changes in the fund’s risk profile, subsequent to major redemptions in November 2014. Number of unit-holders in the fund is very limited, with almost 92% of the outstanding units held by KASB Bank Limited (KBL) as of end-November 2014. The fund holds sizeable amount of assets that may not be readily liquidated, in view of which ability to sustain additional redemption pressure is considered constrained.

The management has however indicated that redemption from KBL is not anticipated in the near term. Being an aggressive fixed income fund, the fund has sizable capacity to assume credit and market risk. More than one-fourth of the fund’s assets comprise high risk exposures; these include equity exposures to the extent of 14.6% of assets.

The management expects to reach settlement of an outstanding exposure, representing 8.2% of assets, with property, offering upside potential. While exposure to interest rate risk has remained low, the fund is exposed to market risk on account of its equity exposure. In line with the profile of assets, the fund’s return has featured notable variation over time.

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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