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Pakistan Credit Rating Agency maintains stability rating of Pakistan Income Fund

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by January 9, 2013 General

Lahore, January 09, 2013 (PPI-OT): The Pakistan Credit Rating Agency (PACRA) has maintained the stability rating of Pakistan Income Fund (PIF), an open-end income fund, at ‘A+ (f)’ (Single A Plus ; fund rating). The fund’s rating denotes a strong capacity to manage relative stability in returns and low exposure to risks.

The fund’s investment objective is to earn reasonable rate of return by primarily investing in debt and fixed income securities without taking excessive risk.

The rating reflects the strong credit quality and sound liquidity profile of the fund emanating from sizeable investments in government securities. At end Sep-12, the portfolio is primarily allocated in government securities (PIBs:14%, T-bills:40%, GoP Ijara Sukuks:17%), while the remainder of the fund is invested in corporate debt securities, primarily TFCs (23%), and daily cash balance with high quality scheduled banks (6%).

Moreover, the non-performing assets comprise around 1% of the net assets at end Sep-12. However, the fund has sufficiently provided for the non-performing investments. The unit holding pattern of the fund is adequately diversified with top10 investors representing 40% of the fund’s assets.

Going forward, the management of the fund intends to maintain exposure to government securities (53%), corporate debt securities (37%), TDRs (7.5%) and cash balances (2.5%) with a duration of 1.5 years. The main risk factor arises from the fund’s interest rate sensitivity and volatility in prices of TFCs amidst largely illiquid debt market.

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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