JCR-VIS Revises Fund Stability Rating of NAMCO Income Fund

Karachi, January 03, 2013 (PPI-OT): JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has revised the Fund Stability Rating of Namco Income Fund (NIF) to ‘A-(f)’ (Single A Minus(f)) from ‘A(f)’ (Single A (f)).

With introduction of Margin Trading System (MTS), the fund has taken significant exposure in this avenue. At end-Nov’12 around 53% of total assets were deployed in MTS; as per regulations, maximum exposure allowed in MTS is 40% of net assets, in case of income funds.

Additionally, around 19% of the fund was invested in a restructured Sukuk, which may have limited marketability. Cash and bank balances representing 19% of total assets were placed with banks having rating in the AA and A band.

With attrition in fund size, there has been weakening in liquidity profile of the fund. At end-Sep’12, the AMC held 54% of outstanding units of the fund, which may provide some cushion, if the AMC continues to hold its investment in the face of redemptions by other investors. Net assets of the fund stood at Rs. 90m at end-Nov’12; below minimum size of Rs. 100m, stipulated by regulations.

For more information, contact:
Mr. Javed Callea
Advisor
JCR-VIS Credit Rating Company Limited
Tel: +9221 35311861 (10 lines) (Ext: 501)
Fax: +9221 35311872-3
E mail: javed.callea@jcrvis.com.pk

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