JCR-VIS reaffirms Fund Stability Rating of PICIC Income Fund

Karachi, February 25, 2015 (PPI-OT): JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the Fund Stability Rating (FSR) of PICIC Income Fund (PIF) at ‘A+(f)’ (Single A Plus(f)). The previous rating action was announced on December 23, 2013.

Asset allocation has so far remained conservative vis-a-vis the allowed policy limits, with just under two-thirds of assets remaining deployed in government paper during FY14 and another one-fifth in cash and bank placements. All credit exposures are subject to minimum rating of ‘A+’. The maximum limit for exposure in margin trading system is proposed to be revised downwards from 40% to 15%; actual investment in this avenue has remained below 15%during FY14.

The IPS allows the fund to extend duration up to two years (preferably 365 days). The same stood at 484 days at end-December, 2014. The duration increased on account of larger holding of PIBs, given the management’s expectations regarding downward movement in policy rate. Accordingly, the fund’s exposure to interest rate risk has trended upwards.

Investor concentration has improved on a timeline basis, though it is still considered to be on the higher side. Performance of the fund is benchmarked against average 6 months KIBOR. In addition to depicting a decline in line with the general trend in interest rates in the market, return of the fund has remained lower than the benchmark over the last three years as assets held by the fund do not carry return pegged to KIBOR.

For more information, contact:
Ms. Sobia Maqbool
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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