JCR-VIS Credit Rating Company Limited (JCR-VIS) has withdrawn the entity rating of BBB/A-2 (Triple B/A-Two) assigned to Mybank Limited, with immediate effect, on account of non-renewal of rating contract.

JCR-VIS reaffirms rating of Faysal Income & Growth Fund at A+(f) and upgrades MQ rating of Faysal Asset Management Limited to AM3+

JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has upgraded the Management Quality rating of Faysal Asset Management Limited to AM3+ (AM-3 Plus) and reaffirmed the fund stability rating of Faysal Income & Growth Fund (FIGF) at A+(f) (Single A Plus).

With the induction of personnel in the fund management function, the staff resource available to the company has been strengthened. The in-house research capabilities have also been enhanced over the last year. The company is managing three funds, while additional products are also in the pipeline. The management is actively pursuing to enhance the investor base by targeting the retail clientele.

FIGF remains invested largely in bank deposits while average allocation to equities has been in the range of 2-3% over the last one and a half years. Though risk as measured by NAV volatility is higher for the fund than other pure income funds, credit risk is considerably low on the fixed income portfolio.

JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the entity ratings of Sapphire Textile Mills Ltd. (STML) at A (Single A) for the medium to long-term and A-2 (A Two) for the short-term. The outlook on the medium to long-term rating is Stable.

The ratings reflect the strategy of the management to maintain a conservative capital structure to align with the risk inherent in the cyclical textile industry while undertaking a consistent level of BMR and expansion on the plant facilities adequately supported by the internal generation from operations. The company has also increased the level of value-addition within the textile industry whereby the contribution to profit before tax of the spinning division has reduced in FY2007 and this focus is expected to be maintained in the medium-term to counter the narrowing margins in the industry.

JCR-VIS is closely following the results reported by the textile industry in FY2008 which is turning out to be a tight year for the industry with high cotton prices which are not offset by commensurate yarn prices due to intense competition in the global markets. However, we are of the opinion that STML is not likely to face any significant pressure on liquidity position due to the low level of debt leverage as well as presence of liquid investments.