JCR-VIS Revises rating of KASB Islamic Income Opportunity Fund

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

The rating revision incorporates changes in the fund’s risk profile since the previous rating action. Unit holding of the fund features concentration, subsequent to major redemptions in November 2014. The fund holds a few assets that may not be readily liquidated, in view of which ability to sustain additional redemption pressure is considered limited. The management has however indicated that redemption pressure has eased off.

As an aggressive fixed income fund, KIIOF’s investment mandate permits the fund to assume sizable exposure to credit and market risk. At-end December 2014, about a fifth of the asset mix comprised investments in non-performing instruments.

The management expects to reach settlement of an outstanding exposure, representing 9.7% of assets, with property, offering upside potential. The fund’s exposure to interest rate risk is expected to remain manageable, given that return on long term Shariah complaint instruments is pegged to market benchmark rates. Returns of the fund have depicted some degree of volatility though remaining positive on a monthly basis throughout CY14.

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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