Karachi, January 04, 2023 (PPI-OT):VIS Credit Rating Company Limited has upgraded the Fund Stability Rating (FSR) of Askari Sovereign Yield Enhancer (ASYE) from ‘A+ (f)’ (Single A Plus (f)) to ‘AA-’ (Double A Minus (f)). The medium to long term rating of ‘AA-’ denotes high degree of stability in NAV. Risk is modest but may vary slightly from time to time because of changing economic conditions. The previous rating action was announced on March 3, 2022.

Askari Sovereign Yield Enhancer is an income fund investing in a pool of sovereign and fixed income debt instruments to generate a relatively higher yield than bank and other money market placements. The Investment Policy Statement (IPS) of ASYE stipulates a minimum rating ‘A+’ for Term Deposits and reverse repo transactions against government securities as well as for TFCs and Sukuks. For all other placements, the threshold is ‘A-’.

Assigned rating takes into account improved credit quality during FY22. Assigned rating also factors in breach in minimum regulatory requirement of net assets under management. Liquidity of the portfolio deteriorated with exposure in cash and government securities diluted. Top ten investor concentration, improved from previous year, albeit it remains high. The weighted average maturity (WAM) of the portfolio as per IPS is capped at 5 years. With T-Bills encompassing larger proportion in asset allocation, WAM of the portfolio witnessed a decline albeit within IPS prescribed thresholds.

Rating also factors in improvement in relative performance of the fund vis-à-vis peers. Although the fund underperformed against its benchmark, sustainability of the fund and maintenance of credit quality will remain important.

For more information, contact:
Director Compliance and Rating Analytics,
VIS Credit Rating Company Limited
VIS House, 128/C, 25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi, Pakistan
Tel: +92-21-35311861-72
Fax: +92-21-35311873
Email: bilal@jcrvis.com.pk
Website: https://www.vis.com.pk/