ASSIGNMENT 3 FINANCIAL MANAGEMENT

Muhammad Abrar Naeem 094532-113

Salman

Ayaz Yazdani

Usman Ahmed 084232033

JS Income Fund (JS IF)
JS Investment was founded in 1995. It is the oldest AMC in Pakistan. It has a market capitalization of around 4.33 billion (as at Dec 2008). It is best rated AMC in Pakistan with a rating of AMC2+, it manages over USD 400 million in assets. JS IF is an income fund that aims to preserve investor’s capital while providing a regular stream of current income on an annual basis which is higher than that offered by commercial banks on deposits of a similar liquidity profile as this fund. The fund operates a diverse portfolio of investment-grade debt securities, government securities and money market instruments. The fund maintains liquidity in the form of spread transactions and bank deposits.

Key Information
Fund type Open end Category Income Fund Funds launch date 26 August, 2002 Fund Assets (PKR mn) 4,016.83 NAV (PKR) 103.18 Benchmark 1M KIBOR Management fee 1.50% Front-end Load 1.00% Pricing mechanism forward Trustee MCB Financial Services Ltd Dealing Days & Cut-off time (Monday to Friday) 3:00 PM Auditors KPMG Taseer Hadi & Co. Risk profile Low Listing LSE Leverage NIL AMC Rating AM2+

Rating Product

Ratin g

Definition

Asset Manager Rating

AM2+

Asset Manager meets very high investment management industry and benchmarks with notes strength in several of the rating factors

Entity Rating – JSIL Credit Rating – Short Term

A1+

Obligations supported by the highest capacity for timely repayment

Entity Rating – JSIL Credit Rating – Long Term

AA-

Very high credit quality. ‘AA’ rating denote a very low expectation of credit risk

Fund Rating
JS Aggressive Allocation JS Fund of Funds JS Growth Fund JS Income Fund JS Value Fund Asset

Normal
4 star 4 star 3 star 5 star 5 star

Long Term
N/A N/A N/A 5 star N/A

UTP A30+ UTP Islamic Fund UTP Large Cap. Fund Unit Trust of Pakistan

4 star 4 star 4 star 5 star

5 star N/A N/A N/A

Performance (%)
1M Fund Benchmar k Differenc e 0.57 12.91 -12.34 6M 11.97 13.33 -1.36 1Y 14.56 13.55 1.01 3Y 10.65 12.14 -1.49 Launch 10.35 7.98 2.37

Monthly performance (%)
FY10 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May 9.32 10.48 13.41 37.73 -0.12 0.57 FY09 13.22 11.26 13.88 14.68 -27.24 14.41 12.43 15.08 38.90 9.58 15.35 FY08 9.96 9.58 8.94 10.09 8.86 8.56 10.09 8.43 9.32 9.84 9.58 FY07 9.71 9.45 10.35 9.07 10.31 11.13 10.61 9.96 8.81 11.78 8.69 FY06 7.93 8.31 15.08 13.22 11.92 12.17 12.30 10.87 9.71 10.09 12.56

Jun

15.62

10.48

9.96

10.61

YTD Benchmar k Differenc e

11.30 13.16 -1.86

11.58 14.23 -2.65

9.64 10.61 -0.97

10.15 9.98 0.17

11.40 9.03 2.37

Performance Charts

Statistical Analysis
Fund Beta Standard Deviation Largest Month Gain 0.3 2.6% 3.7% Benchmark 1.0 1.2% 1.2%

Largest Month Loss % Positive Months Weighted Maturity (Yr) Avg.

-2.6% 94.4% 2.11

0.0% 100.0%

Investment Composition
Asset Allocation (%)
Dec-09 Term Fin. Certificates Term Deposits Cash PIBs Commercial paper Treasury Bills Others TOTAL 37.49 29.83 16.20 11.92 1.76 0.00 2.80 100.00 Nov-09 36.69 4.27 19.09 5.60 2.34 19.89 12.12 100.00

Some Key ratios of JS Investment of their last four years are given below

Key Ratios Valuation Earnings per shares Breakup value per share PKR PKR

2008

2007

2006

200 5

5.49 19.24

5.21 15.95

5.32 23.6 8 N/A N/A N/A N/A N/A N/A

1.44 11.3 3 N/A N/A N/A N/A N/A N/A

Price earnings ratio Market price to break up value Market value per share - year end Market value per share - High Market value per share - Low Market Million) capitalization (PKR in

times times PKR PKR PKR

17.31 4.94 95.07 126.5 53.5 9,507

14.20 4.63 73.90 74.90 61.40 7,390

Key Ratios

2008

2007

2006

2005

Historical trends Management fee (PKR in Million) Operating profit (PKR in Million) Profit before tax (PKR in Million) Profit after tax (PKR in Million) Assets under management (PKR in Million) No. of funds under management share capital (PKR in Million) shareholders’ Million) equity (PKR in 627 673 574 549 38,974 462 629 537 521 29,651 461 679 602 532 22,617 300 251 200 144 16,285

16 1,000 1,924

12 1,000 1,595

9 500 1,184

9 500 567

Total assets (PKR in Million) No. of employees Contribution to the national exchequer (PKR in Million)

4,302

2,547 189

2,353 132 41

1,503 93 80

69

67

Conclusion
For the month of Dec 2009, JSIF yielded an annual return of 0.57% as compare to the benchmark of 12.91%. Also they had eliminated their exposure to Treasury Bills in the month of Dec 2009 as compare to the

allocation of 19.89% in Nov 2009. Term Deposits were increased by 25.56% in the month of Dec 2009 as compared to Nov 2009. They have the highest rating of AM2+; therefore their profile is less risky. Risk Level is low because the investment is done into 7 different areas and the assets are dispersed in different areas. Also they have 5 star rating for both Normal and Long Term.

Sign up to vote on this title
UsefulNot useful

Master Your Semester with Scribd & The New York Times

Special offer for students: Only $4.99/month.

Master Your Semester with a Special Offer from Scribd & The New York Times

Cancel anytime.