Pakistan Credit Rating Agency maintains Stability Rating of IGI Islamic Income Fund

Lahore, January 23, 2013 (PPI-OT): The Pakistan Credit Rating Agency (PACRA) has maintained the stability rating of IGI Islamic Income Fund, an open-end Shariah compliant income fund (IGI-IIF), 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 investment objective of the fund is to provide investors with reasonable rate of return along with long term capital appreciation by investing in a diversified portfolio of Shariah compliant investment instruments.

The rating incorporates the strong credit quality of the fund’s assets along with a robust liquidity profile emanating from a sizeable investment in GoP Ijara Sukuks (48%), at end Sep-12. The remaining portfolio is dominated by daily cash balances with ‘A’ rated Islamic banks (45%) and short-term corporate Sukuks (8%). Meanwhile, the rating incorporates the fund’s low exposure to interest rate volatility emanating from a portfolio duration of 79 days. The fund, highly concentrated unit holding pattern (top10 investors represents 96%), remains vulnerable to redemption pressure.

Going forward, the fund intends to invest in Government issued Ijarah Sukuks (50%) and good quality corporate Sukuks (25%), with a portfolio duration of less than 180 days. To ensure sound liquidity, the remaining assets would be placed with financial institutions of strong credit ratings.

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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