Pakistan Credit Rating Agency Assigns Stability Rating of ‘AAA (F)’ To Primus Cash Fund

Lahore, July 03, 2012 (PPI-OT): The Pakistan Credit Rating Agency (PACRA) has assigned a stability rating of ‘AAA (f)’ (Triple A – fund rating) to Primus Cash Fund (PCF), an open-end money market fund. The fund’s rating denotes an exceptionally strong capacity to maintain relative stability in returns and possesses negligible exposure to risks.

The rating reflects the fund’s mandate to generate competitive returns with minimal risks, by investing primarily in shorter duration money market instruments. The fund’s very low risk emanates from its investment policy of maintaining minimum exposure of 70% in Government securities (primarily T-Bills). Furthermore, deposits are to be kept only in banks / DFIs carrying a minimum credit rating of AA. The fund intends to keep duration of its portfolio within the maximum limit of 45 days.

The key risks to fund’s stability are a) credit risk b) liquidity risk and c) interest rate risk. With 70% exposure in government and remaining in very strong banks/DFI, credit risk is well managed. PCF intends to manage liquidity risk by deploying funds in multiple banks, though initially concentration may be high. Regarding NAV volatility due to interest rate fluctuations, with planned duration for the fund’s portfolio, the impact would be minimal.

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