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Pakistan Credit Rating Agency Limited assigns stability rating to Faysal MTS Fund

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by March 30, 2016 General

Lahore, March 30, 2016 (PPI-OT):The Pakistan Credit Rating Agency (PACRA) has assigned the stability rating of ‘A+'(f) (Single A plus; fund rating) to Faysal MTS Fund (FMTSF), an open-end income fund. The fund’s rating denotes a strong capacity to manage relative stability in returns and low exposure to risks. The objective of Faysal MTS Fund (FMTSF) is to provide competitive returns primarily through investment in the MTS market.

The fund’s mandate is to predominantly invest in Margin Trading System (MTS). MTS is a leveraged product offered by NCCPL. MTS is an undisclosed counterparty market for lenders and borrowers. This is only available for eligible securities also notified by NCCPL. All MTS transactions are entered at financing participation ratio of “15%” for borrower and “85%” for lender. Borrowers are required to pay mark-to-market losses to NCCPL on daily basis in cash. Each MTS contract cannot exceed 60 calendar days and on every fortnight, MTS will automatically reduce 1/4 of the contract value.

The rating of Faysal MTS Fund reflects comfort drawn on the elaborated and secure system of NCCPL. The fund intends to keep a minimum of 70% in MTS on quarterly average basis. The fund would observe per scrip exposure limit as per classification of scrips in four categories. The rest of the amount would be invested in other avenues, of which the rating may not be lower than ‘A+’. Going forward, continued compliance with the relevant guidelines is important.

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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