market review - js investments · market review may 2016 economy headline inflation continued its...

Market Review May 2016

ECONOMY Headline inflation continued its downward trajectory recorded at 3.17% YoY for May 2016 compared to 4.17% YoY recorded in April 2016. On a MoM basis CPI recorded a decrease of 0.21%. The sequential decline was a result of fall in food item prices by 0.7%MoM compared to 2.5% MoM rise in the previous month. Inflation for the period stood at 2.82% YoY in 11MFY16 compared to 4.65% YoY in the same period last year. Going forward inflation is expected to witness slight uptick considering rise in oil prices and advent of Ramadan in June. On monetary side, a surprising move by the SBP saw policy rate being slashed by 25bps to bring it down to 5.75% in its May Monetary Policy Statement on the back of lower inflation, easing pressures on the external account, and outlook on improved foreign exchange flows. In May 2016, foreign reserves stood rose by 4%MoM to stand at USD 21.6bn from continued strengthening of remittances inflow and approval of last trance from IMF under EFF facility. Remittances climbed to USD 16bn for 10MFY16 up by 5.2%YoY during the same period. Pakistan also remains strong on external front as current account balance has improved by 17.7% during 10MFY16 to clock at a deficit of USD 1.9bn against deficit of USD 2.1bn in the same period last year. Provisional current account balance remained positive for the month of April 2016 at USD 0.1bn albeit down by 55% MoM. Going forward, the budget for upcoming FY18 is expected to continue focus towards strengthening overall macro landscape, better fiscal management and higher growth targets. MONEY MARKET REVIEW In May, the State Bank of Pakistan borrowed funds worth PKR 523.78bn in the two T-bill auction against the month target of 300bn while maturity of PKR 242.834bn and the cut off yield for 3, 6 and 12 month averaged at 5.9875%, % 5.9992and 6.0162% respectively. Furthermore, SBP rejected the PIB auction held on 18 May, 2016 as market participation was below expectations at yields above last auction. During the month SBP unexpectedly cut the policy rate with yet another 25 basis points and brought down to 5.75%. Going forward the possible reversal of inflation trajectory provide little room for downward adjustment of policy rate while larger maturity of long term bonds maintained pressure on their respective yields. EQUITY MARKET REVIEW The positive momentum on the KSE30 Index continued for 4th consecutive month in May-16. The benchmark index rose by 2.85% during the outgoing month driven by Oil and Gas (+5.5%) and Cement sector (+4.2%). However, sequential decline of the heavyweight banking sector (-3.0%) underpinned index performance compared to the previous month. Two key highlights in May-16 remained (1) Foreign Institutional Portfolio Investment turned positive (US$3.6mn) following eight months of incessant outflow, and (2) a surprise reduction in policy rate by the central bank (by 25bp to5.75%). While volumes have picked up by 11% MoM, going forward the index trajectory largely hinges on successful inclusion of Pakistan in MSCI EM index, overall improvement in macroeconomic environment and stable political scenario.

Monthly YoY Inflation

0.0%

4.0%

8.0%

12.0%

16.0%

Apr

-12

Jul-1

2O

ct-1

2Ja

n-13

Apr

-13

Jul-1

3O

ct-1

3Ja

n-14

Apr

-14

Jul-1

4O

ct-1

4Ja

n-15

Apr

-15

Jul-1

5O

ct-1

5Ja

n-16

Apr

-16

Interbank rates KIBOR (Average) May ’16 vs. Apr ’16

6.4

6.3

6.3 6.

6

6.6 6.

8 6.9

6.5

6.3

6.4 6.

6

6.7 6.7 6.8

5.50

6.00

6.50

7.00

7.50

8.00

1M 3M 6M 9M 1Y 2Y 3Y

May '16 Apr '16

Market activity Daily volume vs. KSE-30 movement

19,000

20,000

21,000

22,000

-

50

100

150

200

250

2-May 6-May 12-May 18-May 24-May 30-May

Shrs in mnVolume (L.H.S) KSE-30 (R.H.S)

Unit Trust of Pakistan (UTP) May 2016

MUFAP Recommended Format

Investment philosophy UTP is a balanced fund that aims to preserve and grow investor’s capital in the long term while providing a regular stream of current income on an annual basis. The fund operates a diverse portfolio of equity and fixed income investments whereby the equity component is meant to provide the growth in capital while dividends on the equity component along with the fixed income investments help generate the current income.

Key information Fund type Open endCategory Balanced SchemeFund launch date 27 October, 1997Net Assets (PKR mn) 1,367.68NAV (PKR) 158.29Benchmark 50% 6M KIBOR & 50% KSE 30 IndexManagement fee 2.00% (Exclusive of SST & FED)Front-end Load 3.00%Back-end Load NILPricing mechanism Forward Trustee Central Depository Company of Pakistan Ltd.Dealing Days & Cut-off time (Monday to Friday) 3:00 p.m.Auditor KPMG Taseer Hadi & Co.Risk profile MediumListing PSXLeverage NILStability Rating 2 Star (1 Year), 3 Star (3 Year) , 3 Star ( 5 Year) by PACRAManagement Quality Rating AM2 by JCR-VISEntity Rating A+ (Long Term), A1 (Short Term) by PACRAInvestment Committee MembersDr. Ali Akhtar Ali - Chief Executive Officer Mr. Suleman Rafiq Maniya - Fund ManagerMr. Khawar Iqbal - Chief Financial Officer Mr. Yousuf Muhammad Farooq - Head of Research

Fund manager's review The month of May saw the bullish momentum continue at the bourse with the KSE100 index once again closing at all time highs though with some volatility as the upcoming budget along with the controversy surrounding Panama leaks put market participants on their toes. The KSE30 index went up by 2.85%MoM in May-16 as key index constituents barring banks performed well and the development on Pakistan being promoted to MSCI Emerging market continued to attract investor interest. Your Fund was up 1.84% up in the outgoing month slightly outperforming the benchmark slightly. Your fund booked decent gains in our off benchmark bets and reduced some equity exposure in the month by reducing exposure in Cements while building up in Fertilizers and OMC's. We believe the Pakistan story still has room and the recent cut in the discount rate has without doubt established equities as the asset class to own however equity market performance over the next few months would bring in some volatility which is why cash levels have been increased to benefit from this. The Fund has built some exposure into AGIL (Agri Autos Limited a House of Habib Company) recently where we believe the company will be a big beneficiary of improving Auto sales especially in a low interest rate environment, new products being launched by the company along with a very stable business model with roughly no foreign exchange risk would help in valuations being unlocked further. Your Fund Manager also visited one of our off benchmark companies called CEPB (Century Paper and Board- a Lakson Group Company) in Lahore recently where we were encouraged with the new coal plant coming online. This would result in the company not only competing against imports but also improving its sales volume and underlying profitability. CEPB is also a leveraged company and with lower financial charges the fund manager believes the investment theme in the company has significant room for growth. For 11MFY16, Your Fund has returned 6.77% against the benchmark being up only 1.43%, an outperformance of 534bps. We continue to be cognizant of the risks however we believe as stated earlier the equity theme is still compelling and we are yet to see the best.

Non Compliant Investments under Circular 07/2009 Name ofInvestment Type Value before

provision

Provision held

(if any)

Value after provision

% of Net Assets

% of Gross Assets

Agritech Ltd. Sukuks 112,298,115 112,298,115 - 0.00 0.00Azgard Nine Ltd.a PPTFC 31,980,766 (31,980,766) - 0.00 0.00Agritech Ltd.b PPTFC - - - 0.00 0.00Azgard Nine Ltd.c PPTFC - - - 0.00 0.00

(a) The commercial paper amounting to Rs. 75 mn of Azgard Nine Ltd has been settled through Issuance of 15,000 PPTFC's of an equivalent amount in the name of the fund. The said PPTFCs were restructured and ANL provided 772,253 shares of Agritech Limited at the rate of Rs. 35 each which reduced our provision accordingly. During the month of January 2013 5000 PPTFC'S have been disposed off. (b) Fund has received Agritech PPTFC's against interest receivable of Agritech Sukuk which is valued at zero but cost is carried at 18,665,000. (c) The Fund has received 3,853 Zero Coupon PPTFC against interest receivable of unlisted TFC's. Since these PPTFC's are received against already defaulted securities and even MUFAP started its revaluation, the management as a matter of prudence is not revaluing said PPTFC's. These PPTFC's are valued at zero but cost is carried at 19,265,000.

1 Cumulative return is based as per MUFAP stated methodology.

Performance (%) 1M 1Y 3Y 5Y Launch Avg. Ann.*

Fund 1.84 8.21 49.63 142.02 1588.96 16.41Benchmark 1.71 3.16 27.25 71.75 834.79 12.76Difference 0.13 5.05 22.38 70.27 754.17 3.64

* Average Annualized Return since inception as per Morning Star formula

Monthly performance (%) FY16 FY15 FY14 FY13 FY12

July 2.89 2.42 5.47 3.57 -0.15August -0.90 -6.41 -5.57 5.07 -1.21September -4.24 3.76 -0.66 -0.06 4.13October 5.66 3.43 2.44 1.64 0.39November -2.36 5.31 6.40 4.01 -2.44December 2.10 3.88 4.53 1.89 -2.45January 0.99 4.50 1.18 2.37 7.38February -4.01 -1.95 -0.19 4.73 5.16March 2.85 -8.59 4.49 1.70 4.88April 2.25 8.55 4.07 1.64 2.08May 1.84 -2.10 1.18 9.46 -0.67June 1.35 -1.36 -0.08 -1.05YTD 6.77 13.52 23.56 42.01 16.60Benchmark 1.43 7.85 18.21 22.77 8.37Difference 5.34 5.67 5.35 19.24 8.23

Asset allocation (%) May-16 Apr-16

Cash 40.91 13.51 Placement with Banks and DFIs - - Equity 53.64 64.43 TFCs / Sukkuks 0.69 - PIBs 3.55 10.56 T Bills - 10.11 MTS / Spread Transactions - - Other including receivables 1.22 1.39 Total 100.00 100.00

Asset quality (%age of total assets)

AA-29.75%

AA+0.11%

AA11.05%

A+0.70%

AAA*3.55% * Govt. securities (3.55%)

Equity sector breakdown (%) May-16 Apr-16

Cement 9.37 9.16 Automobile Assembler 6.55 7.83 Fertilizer 6.05 4.56 Oil & Gas Marketing Companies 4.48 5.37 Food & Personal Care Products 4.42 3.86 Others 22.77 33.65 Total 53.64 64.43

Top holding (%age of total assets) Pak Suzuki Motor Co. Ltd. 6.55 Cherat Cement Co. Ltd. 5.13 Fauji Fertilizer Bin Qasim Ltd. 4.51 Pakistan State Oil Co. Ltd. 4.48 D. G. Khan Cement Co. Ltd. 4.24 Synthetic Products Enterprises Ltd. 4.03 Rafhan Maize Products Ltd. 3.86 Adamjee Insurance Co. Ltd. 3.62 Agriautos Industries Ltd. 3.38 Pakistan Petroleum Ltd. 3.19

Disclosure for WWF Liability under Circular 17 of 2012 The Scheme has maintained provisions against Worker's Welfare Fund’s liability to the tune of Rs. 31,865,820, if the same were not made the NAV per unit/return of the Scheme would be higher by Rs. 3.69 / 2.3%. For details investors are advised to read the Note 9.1 of the latest Financial Statements of the Scheme.

Statistical analysis Fund Fund BM

Information Ratio 0.14 Beta 0.5 1.0Correlation 0.74 Largest Month Gain 14.0% 19.3%Standard Deviation 14.7% Largest Month Loss -24.0% -33.8%Expense Ratio* 0.20% % Positive Months 71.9% 64.7%

* For the month of May 2016.

EQU

ITY

SCH

EME

JS Growth Fund (JS GF) May 2016


Investment philosophy

The main objective of JSGF is to enable the Certificate Holders to participate in a diversified portfolio of high quality equity securities listed on the stock exchanges and to maximize the investment return, by prudent investment management. Key information Fund type Open endCategory Equity SchemeFund launch date 06 June, 2006 *Net Assets (PKR mn) 2,246.52NAV (PKR) 164.57Benchmark KSE30 IndexManagement fee 2.00% (Exclusive of SST & FED)Front-end Load 3.00%Back-end Load NILPricing mechanism Forward Trustee MCB Financial Services LtdDealing Days & Cut-off time (Monday to Friday) 3:00 p.m.Auditor Grant Thorton Anjum Rahman & CoRisk profile HighListing PSXLeverage NILStability Rating 2 Star (1 Year), 3 Star (3 Year) , 2 Star ( 5 Year) by PACRAManagement Quality Rating AM2 by JCR-VISEntity Rating A+ (Long Term), A1 (Short Term) by PACRAInvestment Committee MembersDr. Ali Akhtar Ali - Chief Executive OfficerMr. Khawar Iqbal - Chief Financial OfficerMr. Arslan Asif Soomro - Fund ManagerMr. Yousuf Muhammad Farooq - Head of Research Fund manager's review The month of May has historically seen a lull activity owing to the investors' anxiety over the announcement of government's budget for the next fiscal year. However, this time, the stocks seemed to be holding the ground on expectations of an upgrade to MSCI Emerging Market Index on 14th June 2016. Such an accolade will validate the resurgence of economic, as well as political stability, coupled with value-accretive capital markets reforms. The announcement, if made, will include Pakistan in the MSCI Emerging Market Index by next year but may witness pre-emptive bullish rally in anticipation of the foreign inflows, cushioned by a multi-year high economic growth in the country. Like everyone else, we too are hopeful and awaiting the final leg of the bull-run in the broader stock market. A few re-assuring signs in the current month were first positive foreign inflow in last 10 months. The foreign selling, emanating from global economic volatility and lower corporate growth of listed companies in Pakistan, seems to have ebbed. To almost everyone's surprise, the State Bank of Pakistan (SBP) had cut the Target Rate by 0.25% to 5.75% and endorsed a lower-for-longer outlook on the Interest Rates as well. This caused an uptick in the power sector stocks, which have become attractive on dividend yield, thus contributing to a surge in the Index. In contrast, squeezed by the government’s endeavors, the Banking Sector is feeling the pain because of falling investment yields, insipid advances growth and a mountain of maturities - Rs 1.4 Trillion - falling in the next couple of month. Add to that, the expected continuation of Super Tax would further chip off the hard-to-find earnings growth of the Banking stocks. An unfortunate sight was witnessed at Fauji Cement, which had seen its cement line (2) coming to standstill owing to a break down. In a peak margin, high sales growth environment, such a shortfall is likely to majorly dent the earnings of Fauji Cement along with repair costs and lost production. We believe, this is a blessing in disguise for other cement players with expected excess capacity and the ability to substitute exports; Cherat Cement, Lucky Cement, Kohat Cement and Maple Leaf Cement. Politically, Raheel Shareef met Chinese counterpart to discuss naval corporation, India's recently acquired ballistic technology and re-iterated to complete CPEC at "all-costs", US government disregarding Pakistan's request for F-16 and severing ties by targeting a Taliban leader - supposedly engaged by Pakistan in quadri-lateral peace talks- in Baluchistan region, a region that has long been a no-go area for drones attack. Regionally, India tried to exert its weight in the Southeast Asia by signing a deal of Chabahar Port with Iran and Afghanistan, prompting Pakistan to raise its eyebrows and enhancing border security at Torkham border while exposing Afghan intelligence spies in Baluchistan as well. All does not seem to be going to well in the South East Asia. Budget, MSCI and Ramzan; June would be an interesting month to comment upon.


Fund 1.02 5.40 60.51 188.97 156.91 9.90Benchmark 2.85 -0.94 23.11 76.67 70.62 5.49Difference -1.83 6.34 37.40 112.30 86.29 4.41



July 3.44 2.92 11.41 3.80 -1.13August -2.40 -9.21 -8.85 5.36 -5.05September -6.80 4.22 0.45 -0.71 5.12October 6.53 1.46 1.83 2.34 -3.31November -4.82 3.53 15.14 6.32 -3.28December 3.81 8.28 4.63 1.24 -3.95January -0.79 8.17 1.43 2.12 8.93February -4.46 -5.12 0.06 7.11 9.60March 4.74 -11.16 6.43 2.25 6.89April 3.49 11.54 3.18 3.00 2.49May 1.02 -2.67 1.78 14.87 2.07June 2.53 -1.28 -0.87 -0.35YTD 2.79 12.42 40.12 56.91 17.92Benchmark -3.67 5.67 25.96 35.95 2.90Difference 6.46 6.75 14.16 20.96 15.02 Asset allocation (%)

May-16 Apr-16Cash 30.13 7.73Equity 68.81 90.74Other including receivables 1.05 1.53Total 100.00 100.00 Equity sector breakdown (%)

May-16 Apr-16Insurance 13.46 13.98Automobile Assembler 9.87 11.97Commercial Banks 8.85 6.47Oil & Gas Marketing Companies 8.17 9.93Cement 6.51 14.14Others 21.95 34.25Total 68.81 90.74 Top holding (%age of total assets) IGI Insurance Ltd. 6.91Adamjee Insurance Co. Ltd. 6.55Cherat Cement Co. Ltd. 6.51MCB Bank Ltd. 5.50Indus Motor Co. Ltd. 4.97Rafhan Maize Products Ltd. 4.95Pakistan State Oil Co. Ltd. 4.93Pak Suzuki Motor Co. Ltd. 4.90The General Tyre & Rubber Co. of Pakistan Ltd. 4.12Shahtaj Sugar Mills Ltd. 3.54 Disclosure for WWF Liability under Circular 17 of 2012 The Scheme has maintained provisions against Worker's Welfare Fund’s (WWF) liability to the tune of Rs. 91,288,040, if the same were not made the NAV per unit/return of the Scheme would be higher by Rs. 6.69 / 4.1%. For details investors are advised to read the Note 9 of the latest Financial Statements of the Scheme. However, from July 01, 2015 WWF is not being charged. * Converted into open end scheme on 19 July, 2013. 1 Cumulative return is based as per MUFAP stated methodology.



*For the month of May 2016.

JS Value Fund (JS VF) May 2016



The fund maintains a portfolio of high yielding equity securities aiming at earnings derived from capital appreciation and dividend income. The portfolio seeks capital growth through investments in listed equity securities with better-than-average appreciation potential and liberal dividend policies. To benefit from changing interest rate environment and some portion of the portfolio is also kept in cash and near cash instruments (excluding TDR) which may include Government securities not exceeding ninety (90) days maturity. Key information Fund type Open endCategory Equity SchemeFund launch date 14 January, 1996 *Net Assets (PKR mn) 1,099.81NAV (PKR) 199.59Benchmark KSE30 IndexManagement fee 2.00% (Exclusive of SST & FED)Front-end Load 3.00%Back-end Load NILPricing mechanism Forward Trustee MCB Financial Services LtdDealing Days & Cut-off time (Monday to Friday) 3:00 p.m.Auditor KPMG Taseer Hadi & Co.Risk profile HighListing PSXLeverage NILStability Rating 1 Star (1 Year), 3 Star (3 Year) , 3 Star ( 5 Year) by PACRAManagement Quality Rating AM2 by JCR-VISEntity Rating A+ (Long Term), A1 (Short Term) by PACRAInvestment Committee MembersDr. Ali Akhtar Ali - Chief Executive OfficerMr. Khawar Iqbal - Chief Financial OfficerMr. Suleman Rafiq Maniya - Fund ManagerMr. Yousuf Muhammad Farooq - Head of Research Fund manager's review The month of May saw the bullish momentum continue at the bourse with the KSE100 index once again closing at all time highs though with some volatility as the upcoming budget along with the controversy surrounding Panama leaks put market participants on their toes. The KSE30 index went up by 2.85%MoM in May-16 as key index constituents barring banks performed well and the development on Pakistan being promoted to MSCI Emerging market continued to attract investor interest. Your Fund was up 1.74% up in the outgoing month slightly underperforming the benchmark. Your fund booked decent gains in our off benchmark bets and reduced some equity exposure in the month by reducing exposure in Cements while building up in OMC's and Commercial Banks. We believe the Pakistan story still has room and the recent cut in the discount rate has without doubt established equities as the asset class to own however equity market performance over the next few months would bring in some volatility which is why cash levels have been increased to benefit from this. Your Fund Manager also visited one of our off benchmark companies called CEPB (Century Paper and Board- a Lakson Group Company) in Lahore recently where we were encouraged with the new coal plant coming online. This would result in the company not only competing against imports but also improving its sales volume and underlying profitability. CEPB is also a leveraged company and with lower financial charges the fund manager believes the investment theme in the company has significant room for growth. For 11MFY16, Your Fund has returned 10.96% against the benchmark being up down by 3.67%, an outperformance of 1463bps. We continue to be cognizant of the risks however we believe as stated earlier the equity theme is still compelling and we are yet to see the best.

Performance (%) 1M 1Y 3Y 5Y 10Y Avg. Ann.*

Fund 1.74 13.36 64.73 203.77 234.28 12.82Benchmark 2.85 -0.94 23.11 76.67 73.12 5.64Difference -1.11 14.30 41.62 127.10 161.16 7.18

* Average Annualized Return since last ten year as per Morning Star formula Monthly performance (%)

FY16 FY15 FY14 FY13 FY12July 5.69 2.04 8.16 3.57 -0.10August -2.69 -6.80 -7.20 5.88 -3.25September -5.87 4.69 -0.82 1.11 4.09October 7.55 1.33 3.02 4.23 -0.60November -3.25 2.17 12.94 4.98 -5.32December 4.21 5.83 4.30 1.86 -2.97January 0.09 6.26 0.57 1.37 7.42February -5.23 -2.35 0.73 7.90 5.08March 5.88 -10.97 6.46 2.58 5.61April 3.44 10.44 2.87 3.74 0.00May 1.74 -3.52 2.13 14.40 5.13June 2.16 -1.00 -0.16 0.09YTD 10.96 9.72 35.52 64.30 15.25Benchmark -3.67 5.67 25.96 35.95 2.90Difference 14.63 4.05 9.56 28.35 12.35 Asset allocation (%)


May-16 Apr-16Commercial Banks 12.96 7.91Insurance 11.14 10.98Oil & Gas Marketing Companies 7.51 7.30Automobile Assembler 7.49 9.30Sugar & Allied Industries 6.55 6.05Others 24.85 47.90Total 70.51 89.45 Top holding (%age of total assets) Adamjee Insurance Co. Ltd. 7.91Pakistan State Oil Co. Ltd. 7.51MCB Bank Ltd. 6.63Al-Abbas Sugar Mills Ltd. 6.55Cherat Cement Co. Ltd. 6.31Rafhan Maize Products Ltd. 5.51United Bank Ltd. 5.31Pak Suzuki Motor Co. Ltd. 5.21Synthetic Products Enterprises Ltd. 3.83The General Tyre & Rubber Co. of Pakistan Ltd. 3.41 Disclosure for WWF Liability under Circular 17 of 2012 The Scheme has maintained provisions against Worker's Welfare Fund’s (WWF) liability to the tune of Rs. 39,130,068 if the same were not made the NAV per unit/return of the Scheme would be higher by Rs. 7.10 / 3.6%. For details investors are advised to read the Note 9.1 of the latest Financial Statements of the Scheme. However, from July 01, 2015 WWF is not being charged.

* Converted into open end scheme on 27 June, 2013. 1 Cumulative return is based as per MUFAP stated methodology.




EQU

ITY

SCH

EME

JS Large Cap. Fund (JS LCF) May 2016



JS LCF is an open-end Equity Scheme that aims to benefit from an attractive Capital Market in an economy with growth potential, to maximize the total investment return consisting of a combination of capital appreciation and dividend income. Consistent with its Investment Objective, the Fund shall invest primarily in equity securities of listed Large-Cap companies with market capitalization of over Rupees one billion. The remaining Funds shall be invested in Authorized Investments including cash and/or near cash instruments which include cash in bank accounts, and Government securities not exceeding ninety (90) days maturity.

Key information Fund type Open endCategory Equity SchemeFund launch date 14 May, 2004 *Net Assets (PKR mn) 746.61NAV (PKR) 109.56Benchmark KSE30 IndexManagement fee 2.00% (Exclusive of SST & FED)Front-end Load 3.00%Back-end Load NILPricing mechanism Forward Trustee Central Depository Company of Pakistan Ltd.Dealing Days & Cut-off time (Monday to Friday) 3:00 p.m.Auditor KPMG Taseer Hadi & Co.Risk profile HighListing PSXLeverage NILStability Rating 4 Star (1 Year), 4 Star (3 Year) , 4 Star ( 5 Year) by PACRAManagement Quality Rating AM2 by JCR-VISEntity Rating A+ (Long Term), A1 (Short Term) by PACRAInvestment Committee MembersDr. Ali Akhtar Ali - Chief Executive OfficerMr. Khawar Iqbal - Chief Financial OfficerMr. Arslan Asif Soomro - Fund ManagerMr. Yousuf Muhammad Farooq - Head of Research

Fund manager's review The month of May has historically seen a lull activity owing to the investors' anxiety over the announcement of government's budget for the next fiscal year. However, this time, the stocks seemed to be holding the ground on expectations of an upgrade to MSCI Emerging Market Index on 14th June 2016. Such an accolade will validate the resurgence of economic, as well as political stability, coupled with value-accretive capital markets reforms. The announcement, if made, will include Pakistan in the MSCI Emerging Market Index by next year but may witness pre-emptive bullish rally in anticipation of the foreign inflows, cushioned by a multi-year high economic growth in the country. Like everyone else, we too are hopeful and awaiting the final leg of the bull-run in the broader stock market.

A few re-assuring signs in the current month were first positive foreign inflow in last 10 months. The foreign selling, emanating from global economic volatility and lower corporate growth of listed companies in Pakistan, seems to have ebbed. To almost everyone's surprise, the State Bank of Pakistan (SBP) had cut the Target Rate by 0.25% to 5.75% and endorsed a lower-for-longer outlook on the Interest Rates as well. This caused an uptick in the power sector stocks, which have become attractive on dividend yield, thus contributing to a surge in the Index. In contrast, squeezed by the government’s endeavors, the Banking Sector is feeling the pain because of falling investment yields, insipid advances growth and a mountain of maturities - Rs 1.4 Trillion - falling in the next couple of month. Add to that, the expected continuation of Super Tax would further chip off the hard-to-find earnings growth of the Banking stocks. An unfortunate sight was witnessed at Fauji Cement, which had seen its cement line (2) coming to standstill owing to a break down. In a peak margin, high sales growth environment, such a shortfall is likely to majorly dent the earnings of Fauji Cement along with repair costs and lost production. We believe, this is a blessing in disguise for other cement players with expected excess capacity and the ability to substitute exports; Cherat Cement, Lucky Cement, Kohat Cement and Maple Leaf Cement.

Politically, Raheel Shareef met Chinese counterpart to discuss naval corporation, India's recently acquired ballistic technology and re-iterated to complete CPEC at "all-costs", US government disregarding Pakistan's request for F-16 and severing ties by targeting a Taliban leader - supposedly engaged by Pakistan in quadri-lateral peace talks- in Baluchistan region, a region that has long been a no-go area for drones attack. Regionally, India tried to exert its weight in the Southeast Asia by signing a deal of Chabahar Port with Iran and Afghanistan, prompting Pakistan to raise its eyebrows and enhancing border security at Torkham border while exposing Afghan intelligence spies in Baluchistan as well. All does not seem to be going to well in the South East Asia. Budget, MSCI and Ramzan; June would be an interesting month to comment upon.


Fund -0.21 4.44 90.88 236.71 475.15 15.62Benchmark 2.85 -0.94 23.11 76.67 181.61 8.97Difference -3.06 5.38 67.77 160.04 293.54 6.65



July 6.07 3.43 12.94 4.07 -1.09August -3.30 -10.37 -8.41 4.39 -6.17September -7.28 8.70 -1.23 -1.16 6.94October 7.83 6.87 3.16 1.89 -2.67November -5.91 7.34 12.98 6.40 -3.43December 4.67 9.16 5.55 1.40 -4.21January -0.49 8.86 4.48 2.87 9.03February -5.33 -3.83 -6.70 7.98 9.81March 6.35 -9.81 8.30 3.96 4.94April 2.23 12.66 3.63 0.66 0.44May -0.21 -3.00 3.40 12.08 3.08June 1.18 -1.79 0.52 -1.16YTD 3.22 31.74 39.64 54.57 14.87Benchmark -3.67 5.67 25.96 35.95 2.90Difference 6.89 26.07 13.68 18.62 11.97 Asset allocation (%)


May-16 Apr-16Cement 22.75 27.42Automobile Assembler 13.04 13.26Oil & Gas Marketing Companies 13.03 13.82Insurance 12.30 11.14Automobile Parts & Accessories 6.37 6.68Others 22.43 19.21Total 89.92 91.52 Top holding (%age of total assets) Cherat Cement Co. Ltd. 8.72Indus Motor Co. Ltd. 7.60Pakistan State Oil Co. Ltd. 7.35D. G. Khan Cement Co. Ltd. 6.55The General Tyre & Rubber Co. of Pakistan Ltd. 6.37IGI Insurance Ltd. 6.36Adamjee Insurance Co. Ltd. 5.94Attock Petroleum Ltd. 5.68Pak Suzuki Motor Co. Ltd. 5.43Orix Leasing Pakistan Ltd. 4.58

Disclosure for WWF Liability under Circular 17 of 2012 The Scheme has maintained provisions against Worker's Welfare Fund’s (WWF) liability to the tune of Rs. 45,687,183, if the same were not made the NAV per unit/return of the Scheme would be higher by Rs. 6.70 / 6.1%. For details investors are advised to read the Note 9.1 of the latest Financial Statements of the Scheme. However, from July 01, 2015 WWF is not being charged. * Converted into open end scheme on 26 September, 2010.




JS Islamic Fund (JS ISF) May 2016



JS Islamic Fund [JS ISF] aims to grow investor’s capital in the long term in adherence with principles of Shariah compliance as advised by the Shariah Advisory Council (SAC) of this fund. The fund investments are limited to asset classes approved by the Shariah Advisory Council (SAC) and all companies under investment consideration are semiannually screened for Shariah compliance. Key information Fund type Open endCategory Shariah Compliant Islamic - Equity SchemeFund launch date 27 December, 2002Net Assets (PKR mn) 597.83NAV (PKR) 101.70Benchmark KMI-30 IndexManagement fee 2.00% (Exclusive of SST & FED)Front-end Load 3.00%Back-end Load NILPricing mechanism Forward Trustee Central Depository Company of Pakistan Ltd.Dealing Days & Cut-off time (Monday to Friday) 3:00 p.m.Auditor A. F. Ferguson & Co.Risk profile HighListing PSXLeverage NILStability Rating 5 Star (1 Year), 4 Star (3 Year) , 3 Star ( 5 Year) by PACRAManagement Quality Rating AM2 by JCR-VISEntity Rating A+ (Long Term), A1 (Short Term) by PACRAInvestment Committee MembersDr. Ali Akhtar Ali - Chief Executive OfficerMr. Khawar Iqbal - Chief Financial OfficerMr. Arslan Asif Soomro - Fund ManagerMr. Yousuf Muhammad Farooq - Head of Research

Fund manager's review The month of May has historically seen a lull activity owing to the investors' anxiety over the announcement of government's budget for the next fiscal year. However, this time, the stocks seemed to be holding the ground on expectations of an upgrade to MSCI Emerging Market Index on 14th June 2016. Such an accolade will validate the resurgence of economic, as well as political stability, coupled with value-accretive capital markets reforms. The announcement, if made, will include Pakistan in the MSCI Emerging Market Index by next year but may witness pre-emptive bullish rally in anticipation of the foreign inflows, cushioned by a multi-year high economic growth in the country. Like everyone else, we too are hopeful and awaiting the final leg of the bull-run in the broader stock market. A few re-assuring signs in the current month were first positive foreign inflow in last 10 months. The foreign selling, emanating from global economic volatility and lower corporate growth of listed companies in Pakistan, seems to have ebbed. To almost everyone's surprise, the State Bank of Pakistan (SBP) had cut the Target Rate by 0.25% to 5.75% and endorsed a lower-for-longer outlook on the Interest Rates as well. This caused an uptick in the power sector stocks, which have become attractive on dividend yield, thus contributing to a surge in the Index. In contrast, squeezed by the government’s endeavors, the Banking Sector is feeling the pain because of falling investment yields, insipid advances growth and a mountain of maturities - Rs 1.4 Trillion - falling in the next couple of month. Add to that, the expected continuation of Super Tax would further chip off the hard-to-find earnings growth of the Banking stocks. An unfortunate sight was witnessed at Fauji Cement, which had seen its cement line (2) coming to standstill owing to a break down. In a peak margin, high sales growth environment, such a shortfall is likely to majorly dent the earnings of Fauji Cement along with repair costs and lost production. We believe, this is a blessing in disguise for other cement players with expected excess capacity and the ability to substitute exports; Cherat Cement, Lucky Cement, Kohat Cement and Maple Leaf Cement. Politically, Raheel Shareef met Chinese counterpart to discuss naval corporation, India's recently acquired ballistic technology and re-iterated to complete CPEC at "all-costs", US government disregarding Pakistan's request for F-16 and severing ties by targeting a Taliban leader - supposedly engaged by Pakistan in quadri-lateral peace talks- in Baluchistan region, a region that has long been a no-go area for drones attack. Regionally, India tried to exert its weight in the Southeast Asia by signing a deal of Chabahar Port with Iran and Afghanistan, prompting Pakistan to raise its eyebrows and enhancing border security at Torkham border while exposing Afghan intelligence spies in Baluchistan as well. All does not seem to be going to well in the South East Asia. Budget, MSCI and Ramzan; June would be an interesting month to comment upon.


Fund 1.85 9.22 103.36 273.17 698.67 16.72Benchmark 4.51 15.72 68.07 206.68 607.85 15.68Difference -2.66 -6.50 35.29 66.49 90.82 1.04



July 2.96 3.79 15.35 3.24 2.57August -4.33 -11.70 -11.98 6.71 -4.25September -6.10 9.19 1.59 0.11 7.38October 5.97 8.71 1.02 -0.36 1.10November -5.64 7.98 10.07 1.40 -6.35December 4.56 8.68 4.84 1.89 -7.14January 0.54 7.41 5.64 3.05 11.00February -5.20 -1.86 -3.33 7.08 6.68March 7.66 -10.57 7.37 2.83 12.78April 2.37 13.79 3.46 2.07 -3.64May 1.85 -1.15 0.81 11.39 5.59June 5.55 0.67 -0.64 -0.12YTD 3.47 42.90 38.43 45.51 25.84Benchmark 10.46 20.10 29.89 54.41 13.57Difference -6.99 22.80 8.54 -8.90 12.27 Asset allocation (%)


May-16 Apr-16Cement 31.62 34.90Automobile Assembler 16.31 19.96Oil & Gas Marketing Companies 15.43 16.20Textile Composite 8.53 8.64Jute 5.96 5.65Others 15.79 7.88Total 93.63 93.22 Top holding (%age of total assets) Cherat Cement Co. Ltd. 15.12Indus Motor Co. Ltd. 9.52Pakistan State Oil Co. Ltd. 9.01Nishat Mills Ltd. 8.53Pak Suzuki Motor Co. Ltd. 6.78Attock Petroleum Ltd. 6.42Thal Ltd. 5.96Engro Corporation Ltd. 5.36D. G. Khan Cement Co. Ltd. 5.14Kohat Cement Ltd. 4.89 Disclosure for WWF Liability under Circular 17 of 2012 The Scheme has maintained provisions against Worker's Welfare Fund’s (WWF) liability to the tune of Rs. 12,977,854, if the same were not made the NAV per unit/return of the Scheme would be higher by Rs. 2.21 / 2.2%. For details investors are advised to read the Note 9 of the latest Financial Statements of the Scheme. However, from July 01, 2015 WWF is not being charged. 1 Cumulative returns are based as per MUFAP stated methodology.


Beta 0.9 1.0Correlation 0.89 Largest Month Gain 15.4% 20.2%Standard Deviation 22.1% Largest Month Loss -28.7% -37.1%Expense Ratio* 0.28% % Positive Months 68.5% 65.3%


JS Fund of Funds (JS FoF) May 2016



JS FoF is a fund of funds that aims to grow investor’s capital in the long term while diversifying the asset manager risk bundled together with the benefits of an asset allocation fund. The fund operates a diverse portfolio of equity, balanced, fixed income and money market funds (both open and closed ended) with the option to adjust the asset mix as equity markets rise or fall and the economy strengthens or weakens.

Key information Fund type Open endCategory Fund of Fund SchemeFund launch date 31 October, 2005Net Assets (PKR mn) 175.57NAV (PKR) 55.13Benchmark Average of asset allocation funds returnsManagement fee 1.00% (Exclusive of SST & FED)Front-end Load 3.00%Back-end Load NILPricing mechanism Forward Trustee Central Depository Company of Pakistan Ltd.Dealing Days & Cut-off time (Monday to Friday) 3:00 p.m.Auditor KPMG Taseer Hadi & Co.Risk profile MediumListing PSXLeverage NILManagement Quality Rating AM2 by JCR-VISEntity Rating A+ (Long Term), A1 (Short Term) by PACRAInvestment Committee MembersDr. Ali Akhtar Ali - Chief Executive OfficerMr. Khawar Iqbal - Chief Financial OfficerMr. Arslan Asif Soomro - Fund ManagerMr. Yousuf Muhammad Farooq - Head of Research

Fund manager's review The month of May has historically seen a lull activity owing to the investors' anxiety over the announcement of government's budget for the next fiscal year. However, this time, the stocks seemed to be holding the ground on expectations of an upgrade to MSCI Emerging Market Index on 14th June 2016. Such an accolade will validate the resurgence of economic, as well as political stability, coupled with value-accretive capital markets reforms. The announcement, if made, will include Pakistan in the MSCI Emerging Market Index by next year but may witness pre-emptive bullish rally in anticipation of the foreign inflows, cushioned by a multi-year high economic growth in the country. Like everyone else, we too are hopeful and awaiting the final leg of the bull-run in the broader stock market. A few re-assuring signs in the current month were first positive foreign inflow in last 10 months. The foreign selling, emanating from global economic volatility and lower corporate growth of listed companies in Pakistan, seems to have ebbed. To almost everyone's surprise, the State Bank of Pakistan (SBP) had cut the Target Rate by 0.25% to 5.75% and endorsed a lower-for-longer outlook on the Interest Rates as well. This caused an uptick in the power sector stocks, which have become attractive on dividend yield, thus contributing to a surge in the Index. In contrast, squeezed by the government’s endeavors, the Banking Sector is feeling the pain because of falling investment yields, insipid advances growth and a mountain of maturities - Rs 1.4 Trillion - falling in the next couple of month. Add to that, the expected continuation of Super Tax would further chip off the hard-to-find earnings growth of the Banking stocks. An unfortunate sight was witnessed at Fauji Cement, which had seen its cement line (2) coming to standstill owing to a break down. In a peak margin, high sales growth environment, such a shortfall is likely to majorly dent the earnings of Fauji Cement along with repair costs and lost production. We believe, this is a blessing in disguise for other cement players with expected excess capacity and the ability to substitute exports; Cherat Cement, Lucky Cement, Kohat Cement and Maple Leaf Cement. Politically, Raheel Shareef met Chinese counterpart to discuss naval corporation, India's recently acquired ballistic technology and re-iterated to complete CPEC at "all-costs", US government disregarding Pakistan's request for F-16 and severing ties by targeting a Taliban leader - supposedly engaged by Pakistan in quadri-lateral peace talks- in Baluchistan region, a region that has long been a no-go area for drones attack. Regionally, India tried to exert its weight in the Southeast Asia by signing a deal of Chabahar Port with Iran and Afghanistan, prompting Pakistan to raise its eyebrows and enhancing border security at Torkham border while exposing Afghan intelligence spies in Baluchistan as well. All does not seem to be going to well in the South East Asia. Budget, MSCI and Ramzan; June would be an interesting month to comment upon.


Fund 3.71 10.45 66.03 163.39 310.60 14.27Benchmark 1.91 6.87 49.66 111.16 160.80 9.47Difference 1.80 3.58 16.37 52.23 149.80 4.79

* Average Annualized Return since inception as per Morning Star formula Monthly performance (%)

FY16 FY15 FY14 FY13 FY12July 2.66 4.88 13.60 0.36 0.03August -2.28 -7.37 -8.62 3.11 -3.49September -6.25 3.52 6.78 -0.38 6.18October 5.78 2.93 -0.05 1.52 0.88November -2.97 4.47 7.87 3.20 0.10December 3.78 5.34 4.63 1.07 -1.88January -1.11 5.35 3.32 2.31 4.34February -3.30 -0.95 -2.52 4.35 4.21March 6.21 -7.01 5.38 1.20 5.66April 3.63 10.03 4.43 2.59 -1.28May 3.71 -1.97 1.77 11.12 2.98June 1.01 -0.67 -10.01 1.15YTD 9.34 20.44 40.09 21.01 20.00Benchmark 3.73 21.16 19.79 26.91 9.88Difference 5.61 -0.72 20.30 -5.90 10.12 Asset allocation (%)

May-16 Apr-16Open-end - 92.83 Close-end - - T Bills - - Cash 99.82 7.09 Other including receivables 0.18 0.08 Total 100.00 100.00 Top holding (%age of total assets) n/a n/a

Disclosure for WWF Liability under Circular 17 of 2012 The Scheme has maintained provisions against Worker's Welfare Fund’s (WWF) liability to the tune of Rs. 11,932,101, if the same were not made the NAV per unit/return of the Scheme would be higher by Rs. 3.75 / 6.8%. For details investors are advised to read the Note 9.1 of the latest Financial Statements of the Scheme. However, from July 01, 2015 WWF is not being charged. 1 Cumulative returns are based as per MUFAP stated methodology.



* For the month of May 2016

JS Cash Fund (JS CF) May 2016



JS Cash Fund (JS CF) is an open-end 'Money Market Scheme' that mainly invests in low risk short-term fixed income instruments including money market instruments to provide a regular and reasonable return to investors while ensuring high liquidity. The Fund shall invest primarily in short duration instruments and may even hold some or all of its assets in cash for the purpose maintaining liquidity. Key information Fund type Open endCategory Money Market SchemeFund launch date 29 March, 2010Net Assets (PKR mn) 630.01NAV (PKR) 107.80Benchmark BM CF1

Management fee 0.50% (Exclusive of SST & FED)Front-end Load 1.00%Back-end Load NILPricing mechanism BackwardTrustee MCB Financial Services Ltd Dealing Days & Cut-off time (Monday to Friday) 3:00 p.m.Auditor KPMG Taseer Hadi & Co.Risk profile Extremely LowListing PSXFund stability rating (JCR-VIS) AA+ (f)Leverage NILManagement Quality Rating AM2 by JCR-VISEntity Rating A+ (Long Term), A1 (Short Term) by PACRAInvestment Committee MembersDr. Ali Akhtar Ali - Chief Executive OfficerMr. Khawar Iqbal - Chief Financial OfficerMr. Umair Ahmed Khan - Fund ManagerMr. Yousuf Muhammad Farooq - Head of Research Fund manager's review

JS Cash Fund reported an annualized return of 5.38% for the month of May, 2016 as compared to the annualized benchmark return of 5.03%, outperforming by the margin of 35 basis points.

During the month, fund reduced exposure in TBills to gain advantage of lower yields while placed funds in daily product at comparable higher rates even after DR cut of 25 bps announced by the SBP during the month.

Performance (%) Annualized performance2 1M 1Y 3Y 5Y Launch

Fund 5.38 6.51 8.44 10.63 12.00Benchmark 5.03 5.85 8.23 9.99 11.10Difference 0.35 0.66 0.20 0.64 0.90 Monthly performance (%) Annualized performance2

FY16 FY15 FY14 FY13 FY12July 5.87 8.62 7.28 10.42 11.66August 5.72 8.69 7.24 13.78 13.06September 6.94 8.68 5.83 8.35 11.85October 5.66 9.05 7.27 9.77 13.81November 4.54 9.34 7.65 7.65 10.43December 5.61 8.33 8.04 7.97 9.64January 5.70 10.03 8.06 7.72 11.03February 5.47 7.62 8.17 7.10 9.72March 5.54 7.17 8.86 7.79 10.31April 5.35 8.93 8.88 8.29 10.79May 5.38 6.65 8.91 8.17 10.00June 14.10 8.84 7.70 10.13YTD 5.75 9.30 8.21 9.11 11.62Benchmark 5.78 8.20 8.73 8.98 10.09Difference -0.03 1.10 -0.52 0.13 1.53 Asset allocation (%)

May-16 Apr-16Cash 99.49 66.90 Placement with Banks and DFIs - - T Bills - 32.70 Other including receivables 0.51 0.41 Total 100.00 100.00 Asset quality (%age of total assets)

AAA0.10%

AA58.03%

AA+0.09%

A+0.04%

AA-0.00%

* Govt. securities (0.00%)

Disclosure for WWF Liability under Circular 17 of 2012

Consequent upon the approval of the Board of Directors, the Management Company of the fund has prudently indemnify the unrecognized amount of WWF amounting to Rs. 10.884 million aggregated up to June 30, 2013. The fund is maintaining prospective provisioning against WWF with effect from July 01, 2013. The Scheme has maintained provisions against Worker's Welfare Fund’s (WWF) liability to the tune of Rs. 3,441,484, if the same were not made the NAV per unit/return of the Scheme would be higher by Re. 0.59 / 0.5%. For details investors are advised to read the Note 9.2 of the latest Financial Statements of the Scheme. However, from July 01, 2015 WWF is not being charged.

1. 50% Average return of 3-months deposit rates of AA and above rated

scheduled commercial Bank(s), and 50% average 3-months T-Bill rate. 2. Annualized return is based as per MUFAP stated methodology.

Statistical analysis Fund BM Fund BM

Standard Deviation 0.7% 0.5% Largest Month Gain 1.2% 0.9%Expense Ratio* 0.1% Largest Month Loss 0.0% 0.0%Duration (Days) 1 % Positive Months 100.0% 100.0%WAM (Days) 1


JS Income Fund (JS IF) May 2016



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 may maintain liquidity in the form of spread transactions and bank deposits. Key information Fund type Open endCategory Income Fund SchemeFund launch date 26 August, 2002Net Assets (PKR mn) 1,089.30NAV (PKR) 99.80Benchmark 40% 1Year PKRV Rate + 60% 6M KIBORManagement fee 0.75% (Exclusive of SST & FED)Front-end Load 1.00%Back-end Load NILPricing mechanism Forward Trustee MCB Financial Services LtdDealing Days & Cut-off time (Monday to Friday) 3:00 p.m.Auditor Grant Thorton Anjum Rahman & CoRisk profile Low To MediumListing PSXFund stability rating (PACRA) A+ (f)Leverage NILManagement Quality Rating AM2 by JCR-VISEntity Rating A+ (Long Term), A1 (Short Term) by PACRAInvestment Committee MembersDr. Ali Akhtar Ali - Chief Executive OfficerMr. Khawar Iqbal - Chief Financial OfficerMr Asim Ilyas - Fund ManagerMr. Yousuf Muhammad Farooq - Head of Research Fund manager's review For the month of May, 2016, JSIF yielded an annualized return of 11.44% as compared to the benchmark of 6.28%, outperforming by 516 basis points. During the month, fund has reduced exposure towards PIBs at reduced yields post DR cut and booked significant gains in the fund. Going forward, with benign inflation we will reallocate funds towards PIBs and rebalance the portfolio as per the market developments. Non Compliant Investments under Circular 07/2009 Name ofInvestment Type Value before

provisionProvision held

(if any)Value after provision

% of Net Assets

% of Gross Assets

Azgard Nine a TFC 6,661,110 (6,661,110) - - -

Azgard Nine b PPTFCs 31,980,766 (31,980,766) - - -

Agritech Ltd. c Sukuk 59,572,782 (59,572,782) - - -

Agritech Ltd.d PPTFC - - - - -

Dewan Cement e TFC 50,000,000 (49,990,000) 10,000 0.00 0.00

Azgard Nine f PPTFC - - - - - a) The fund has made a full provision against the principal amount in accordance with the requirements of regulatory body & the provisioning policy of the Fund. (b) The CP of ANL has been settled through issuance of 15,000 PPTFCs in the name of the Fund. These PPTFCs have been restructured however, the mgt. as a matter of prudence has maintained the provision against the said PPTFCs. In lieu of restructuring of Azgard Nine existing debt securities, Agritech pledge shares has been credited in Faysal Bank (Trustee of the Issuer) CDS account. These shares are booked and marked to market accordingly. (c) The fund has made a full provision against the principal amount in accordance with the requirements of Circular 1 & the provisioning policy of the Fund. (d) The Fund has made a full provision against the principal amount of Agritech Limited’s Sukuk in accordance with the requirements of Circular 1 of 2009 issued by the SECP and the provisioning policy of the Fund. The Fund has received Agritech Limited’s PPTFC of face value of Rs. 11.245 million against interest due on Agritech Limited’s Sukuk which is not recognized as income by the Fund and these PPTFCs are valued at zero. (e) Non rated securities. (f) The fund received 4,827 zero coupon PPTFCs against interest receivable of listed and unlisted TFCs. Since these PPTFCs are received against already defaulted securities and have non-performing status in MUFAP, therefore the management as a matter of prudence maintained the provision against the said PPTFCs. These PPTFCs are valued at zero but cost is carried at 24,135,000.

Performance (%) Annualized performance1 1M 1Y 3Y 5Y Launch

Fund 11.44 6.07 8.95 11.53 14.06 Benchmark 6.28 6.79 9.68 12.32 15.94 Difference 5.15 (0.72) (0.73) (0.79) (1.88) Monthly performance (%) Annualized performance1

FY16 FY15 FY14 FY13 FY12July 11.50 7.44 4.86 11.24 11.58August 5.82 9.04 6.71 20.78 22.81September 3.69 9.55 -0.15 11.71 12.05October 3.31 8.90 5.81 11.72 21.02November 5.95 14.85 12.33 5.78 10.81December 6.58 20.84 7.77 23.72 6.45January 3.76 16.64 10.36 6.49 13.54February 9.81 7.55 7.29 -0.85 11.42March 6.23 5.65 12.38 7.00 11.29April 0.86 17.17 13.93 8.69 3.67May 11.44 2.59 -0.41 7.67 12.94June 1.75 8.34 6.40 10.16YTD 6.43 10.65 7.67 10.60 13.07Benchmark 6.72 9.35 10.30 10.38 13.01Difference -0.29 1.30 -2.63 0.22 0.05 Asset allocation (%)

May-16 Apr-16Cash 77.93 27.93 Placement with Banks and DFIs - - Equity* 0.88 1.00 T Bills - 13.67 PIBs 5.13 34.43 TFCs / Sukkuks 8.64 9.37 MTS / Spread Transactions 6.08 4.41 Other including receivables 1.33 9.19 Total 100.00 100.00

* Under debt-swap arrangement with Azgard Nine Limited (ANL), the fund has received shares of Agritech Limited (AGL), against the investments of ANL-PPTFC and listed TFCs, these listed TFCs and PPTFCs had been fully provided. Asset quality (%age of total assets)

A+58.98%

AAA*5.13%

AA0.48%

"<BBB"0.00%

AA+0.28%

AA-18.19%

* Govt. securities (5.13%) Disclosure for WWF Liability under Circular 17 of 2012 Consequent upon the approval of the Board of Directors, the Management Company of the fund has prudently indemnified the unrecognized amount of WWF amounting to Rs. 20.426 million aggregated up to June 30, 2013. The fund is maintaining prospective provisioning against WWF with effect from July 01, 2013. The Scheme has maintained provisions against Worker's Welfare Fund’s (WWF) liability to the tune of Rs. 1,693,409, if the same were not made the NAV per unit/return of the Scheme would be higher by Rs. 0.16 / 0.2%. For details investors are advised to read the Note 9.1 of the latest Financial Statements of the Scheme. However, from July 01, 2015 WWF is not being charged. 1 Annualized performance return is based as per MUFAP stated methodology.


Standard Deviation 4.4% 1.0% Largest Month Gain 3.7% 1.2%Expense Ratio 0.12% Largest Month Loss -10.3% 0.0%Duration (Yr) 0.04 % Positive Months 92.2% 100.0%WAM (Yr) 0.70

* For the month of May 2016

JS Islamic Government Securities Fund (JS IGSF) May 2016



JS Islamic Government Securities Fund (JS IGSF) is an open end 'Shariah Compliant Sovereign Income Scheme' which aims at generating a stable stream of current HALAL income while ensuring low risk (volatility) and capital preservation in the medium to long term by investing primarily in Shariah Compliant Government Securities. Key information Fund type Open endCategory Shariah Compliant Income Scheme Fund launch date 5 June, 2013Net Assets (PKR mn) 261.77NAV (PKR) 103.50Benchmark BM IGSF1

Management fee 0.75% (Exclusive of SST & FED)Front-end Load 1.00%Back-end Load NILPricing mechanism Forward Trustee MCB Financial Services Ltd Dealing Days & Cut-off time (Monday to Friday) 3:00 p.m.Auditor KPMG Taseer Hadi & Co.Risk profile Low to MediumListing PSXFund stability rating (PACRA) AA- (f)Leverage NILManagement Quality Rating AM2 by JCR-VISEntity Rating A+ (Long Term), A1 (Short Term) by PACRAInvestment Committee MembersDr. Ali Akhtar Ali - Chief Executive OfficerMr. Khawar Iqbal - Chief Financial OfficerMr. Asim Ilyas - Fund ManagerMr. Yousuf Muhammad Farooq - Head of Research Fund manager's review

The fund recorded annualized return of 6.06% for the month of May, 2016 as compared to the benchmark return of 4.88% an outperformance of 118 bps.

During the month, fund manager maintained exposure into floater rental Ijara Sukuk while higher exposure was maintained in Fixed Rental Ijara Sukuk and fund witnessed a significant gain post DR cut. Furthermore, the remaining fund placed in banks at relatively better rate.

Performance (%) ` Annualized performance2 1M 6M 1Y 2Y Launch

Fund 6.06 4.45 3.65 5.04 6.64Benchmark 4.88 5.13 5.67 13.83 7.34Difference 1.18 -0.67 -2.02 -8.79 -0.71 Monthly performance (%) Annualized performance2

FY16 FY15 FY14 FY13July 4.58 2.42 6.83 n/aAugust 3.98 3.13 6.91 n/aSeptember -0.12 4.26 7.88 n/aOctober 2.33 6.45 6.81 n/aNovember 1.56 5.54 12.54 n/aDecember 6.75 5.80 9.47 n/aJanuary -1.27 12.25 6.55 n/aFebruary 3.34 5.95 11.28 n/aMarch 7.50 8.08 13.07 n/aApril 4.03 7.13 6.10 n/aMay 6.06 7.42 10.17 n/aJune 4.05 4.19 6.03YTD 3.59 6.22 8.80 6.03Benchmark 5.58 7.62 7.16 6.70Difference -1.99 -1.41 1.64 -0.67 Asset allocation (%)

May-16 Apr-16Cash 20.04 18.98Placement with Banks and DFIs - - TFCs / Sukkuks 77.54 79.01Other including receivables 2.43 2.01Total 100.00 100.00 Asset quality (%age of total assets)

AAA77.54%

A+18.96%

AA-0.76%

AA0.01%

AA+0.30%

* Govt. securities (77.54%)

Sukuks allocation - Top Ten Holding

77.54%

0.0%

25.0%

50.0%

75.0%

100.0%

125.0%

GoP Ijara Sukkuks

Disclosure for WWF Liability under Circular 17 of 2012

The Scheme has maintained provisions against Worker's Welfare Fund’s (WWF) liability to the tune of Rs. 981,093, if the same were not made the NAV per unit/return of the Scheme would be higher by Re. 0.39 / 0.4%. For details investors are advised to read the Note 10.1 of the latest Financial Statements of the Scheme. However, from July 01, 2015 WWF is not being charged.

1. The benchmark of the scheme shall be the average 6 month

Placement (Deposit) rate of 3 Islamic Banks (including Islamic windows of Commercial Banks)

2. Annualized return is based as per MUFAP stated methodology.


Standard Deviation 1.0% 0.4% Largest Month Gain 1.1% 0.7%Expense Ratio 0.11% Largest Month Loss -0.1% 0.0%Duration (Yr) 0.11 % Positive Months 94.6% 100.0%WAM (Yr) 2.04


JS Pension Savings Fund (JS PSF) May 2016



JS Pension Savings Fund (JS PSF) is designed to provide a secure source of savings and retirement income to individuals. JS PSF is a portable pension scheme allowing individuals the flexibility of contributions and portfolio customization through allocation of such contributions among equity and fixed income investment avenues suited to their specific needs and risk profile. Key information Fund type Open endCategory Pension Savings FundFund launch date 26 June, 2007Benchmark n/aManagement fee 1.50% (Exclusive of SST & FED)Front-end Load 3.00%Back-end Load NILPricing mechanism Forward Trustee Central Depository Company of Pakistan Ltd.Dealing Days & Cut-off time (Monday to Friday) 3:00 p.m.Auditor A. F. Ferguson & Co.Risk profile Investor dependent Leverage NILManagement Quality Rating AM2 by JCR-VISEntity Rating A+ (Long Term), A1 (Short Term) by PACRAInvestment Committee MembersDr. Ali Akhtar Ali - Chief Executive OfficerMr. Khawar Iqbal - Chief Financial OfficerMr. Suleman Rafiq Maniya - Fund ManagerMr. Yousuf Muhammad Farooq - Head of Research

Net Assets (PKR mn)JS-PSF - Equity Sub Fund 157.41JS-PSF - Debt Sub Fund 141.74JS-PSF - MM Sub Fund 106.40

NAV (PKR)JS-PSF - Equity Sub Fund 406.70JS-PSF - Debt Sub Fund 217.88JS-PSF - MM Sub Fund 176.51

Fund manager's review The Debt and Money Market Sub Fund recorded return of 10.69% p.a. and 5.02% p.a. respectively for the month of May, 2016 rise in PSFDSF return is due to capitalizing on reducing yields of PIBs post DR cut. Going forward we will maintain investment in Treasury Bill in Money Market Sub Fund while regain exposure towards PIBs in Debt Sub Fund conditioned to economic and inflation outlook.. The month of May saw the bullish momentum continue at the bourse with the KSE100 index once again closing at all time highs though with some volatility as the upcoming budget along with the controversy surrounding Panama leaks put market participants on their toes. The KSE30 index went up by 2.85%MoM in May-16 as key index constituents barring banks performed well and the development on Pakistan being promoted to MSCI Emerging market continued to attract investor interest. Your Fund was up 2.22% up in the outgoing month slightly underperforming the benchmark. Your fund booked decent gains in our off benchmark bets and reduced some equity exposure in the month by reducing exposure in Cements while building up in Fertilizers and OMC's. We believe the Pakistan story still has room and the recent cut in the discount rate has without doubt established equities as the asset class to own however equity market performance over the next few months would bring in some volatility which is why cash levels have been increased to benefit from this. The Fund has built some exposure into AGIL (Agri Autos Limited a House of Habib Company) recently where we believe the company will be a big beneficiary of improving Auto sales especially in a low interest rate environment, new products being launched by the company along with a very stable business model with roughly no foreign exchange risk would help in valuations being unlocked further. Your Fund Manager also visited one of our off benchmark companies called CEPB (Century Paper and Board- a Lakson Group Company) in Lahore recently where we were encouraged with the new coal plant coming online. This would result in the company not only competing against imports but also improving its sales volume and underlying profitability. CEPB is also a leveraged company and with lower financial charges the fund manager believes the investment theme in the company has significant room for growth.

Disclosure for WWF Liability under Circular 17 of 2012 The Scheme has maintained provisions against Worker's Welfare Fund’s (WWF) liability to the tune of Rs. 4,587,149, if the same were not made the NAV per unit/return of the Scheme would be higher by Rs. 5.73 (ESF), Rs. 2.18 (DSF), Rs. 1.58 (MMF) / 1.4% (ESF), 1.0% (DSF), 0.9% (MMF). For details investors are advised to read the Note 6.1 of the latest Financial Statements of the Scheme. However, from July 01, 2015 WWF is not being charged. 1 Annualized performance return is based as per MUFAP stated methodology.

Performance (%) 1M 1Y 3Y 5Y Launch

Equity Sub Fund 2.22 6.52 107.04 327.25 306.73Debt Sub Fund 1 10.69 4.97 20.49 51.59 117.90MM Sub Fund 1 5.02 4.34 18.37 47.44 76.52

Monthly performance (%) Annualized performance1

Equity Debt 1 MM 1

FY16 FY15 FY16 FY15 FY16 FY15July 2.86 2.37 6.81 10.18 7.76 5.62August -0.49 -9.03 8.91 10.22 3.44 6.40September -5.79 6.19 4.57 12.06 3.19 7.26October 5.99 12.91 4.74 11.13 3.15 6.47November -5.25 9.35 3.16 14.90 4.37 7.78December 3.21 4.98 3.93 18.85 4.76 7.62January -0.08 7.03 4.47 14.61 2.44 8.50February -4.95 -3.96 5.41 6.76 4.12 6.28March 4.27 -13.63 4.82 7.47 3.77 5.65April 2.38 9.14 0.45 11.89 3.61 6.10May 2.22 -3.78 10.69 4.73 5.02 4.89June 2.85 -0.06 5.32YTD 3.58 22.91 5.41 10.75 4.23 6.69

Asset allocation (%) Equity May-16 Apr-16Cash 24.38 6.25 Equity 74.61 92.54 Other including receivables 1.01 1.21 Total 100.00 100.00 Debt May-16 Apr-16Cash 4.99 4.77 Equity* 0.16 0.16 TFCs / Sukkuks 3.45 - T Bills & PIBs 90.99 94.92 Other including receivables 0.40 0.15 Total 100.00 100.00 Money Market May-16 Apr-16Cash 3.30 1.36 Placement with Banks - - Equity* 1.10 1.03 T Bills 95.50 97.51 Other including receivables 0.10 0.10 Total 100.00 100.00

* Under debt-swap arrangement with Azgard Nine Limited (ANL), debt and money market sub funds have received shares of Agritech Limited (AGL), against the investments of ANL-PPTFC, these PPTFCs in sub funds had been fully provided. Equity sector breakdown (%)

May-16 Apr-16Cement 12.42 13.32 Automobile Assembler 11.44 12.92 Pharmaceuticals 8.77 4.08 Automobile Parts & Accessories 8.08 7.52 Food & Personal Care Products 7.99 9.40 Others 25.91 45.30 Total 74.61 92.54

Top holding (%age of total assets) Agriautos Industries Ltd. 8.08 Cherat Cement Co. Ltd. 8.01 Pakistan State Oil Co. Ltd. 6.51 HinoPak Motors Ltd. 5.89 Pak Suzuki Motor Co. Ltd. 5.55 Abbott Laboratories Pakistan Ltd. 4.82 Rafhan Maize Products Ltd. 4.80 Adamjee Insurance Co. Ltd. 4.46 D. G. Khan Cement Co. Ltd. 4.41 Fauji Fertilizer Bin Qasim Ltd. 4.27

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D JS Islamic Pension Savings Fund (JS IPSF) May 2016



JS Islamic Pension Savings Fund (JS IPSF) is designed to provide a Halal and secure source of savings and retirement income to individuals according to the principles of Islamic Shariah. JS IPSF is a portable pension scheme allowing individuals the flexibility of contributions and portfolio customization through allocation of such contributions among equity, fixed income and other Halal investment avenues suited to their specific needs and risk profile.

Key information Fund type Open endCategory Shariah Compliant Voluntary Pension SchemeFund launch date 16 June, 2008Benchmark n/aManagement fee 1.50% (Exclusive of SST & FED)Front-end Load 3.00%Back-end Load NILPricing mechanism Forward Trustee Central Depository Company of Pakistan Ltd.Dealing Days & Cut-off time (Monday to Friday) 3:00 p.m.Auditor A. F. Ferguson & Co.Risk profile Investor dependent Leverage NILManagement Quality Rating AM2 by JCR-VISEntity Rating A+ (Long Term), A1 (Short Term) by PACRAInvestment Committee MembersDr. Ali Akhtar Ali - Chief Executive OfficerMr. Khawar Iqbal - Chief Financial OfficerMr. Suleman Rafiq Maniya - Fund ManagerMr. Yousuf Muhammad Farooq - Head of Research

Net Assets (PKR mn)JS-IPSF - Equity Sub Fund 122.95JS-IPSF - Debt Sub Fund 61.22JS-IPSF - MM Sub Fund 52.79

NAV (PKR)JS-IPSF - Equity Sub Fund 570.17JS-IPSF - Debt Sub Fund 186.38JS-IPSF - MM Sub Fund 163.10

Fund manager's review In the month of May, 2016, JS Islamic Pension Savings Debt Sub Fund and Money Market Sub Fund delivered returns of 5.90% annualized and 3.55% annualized respectively. During the month, allocation of government Ijara Sukuk has maintained exposure in IPSFDSF and IPSMMSF. Fund witnessed gains mainly from lowering of fixed rental rate Sukuks yields. The month of May saw the bullish momentum continue at the bourse with the KSE100 index once again closing at all time highs though with some volatility as the upcoming budget along with the controversy surrounding Panama leaks put market participants on their toes. The KMI30 index went up by 4.5%MoM in May-16 as key index constituents barring banks performed well and the development on Pakistan being promoted to MSCI Emerging market continued to attract investor interest. Your Fund was up 2.94% up in the outgoing month underperforming the benchmark. Your fund booked decent gains in our off benchmark bets and reduced some equity exposure in the month by reducing exposure in Cements while building up in Fertilizers and OMC's. We believe the Pakistan story still has room and the recent cut in the discount rate has without doubt established equities as the asset class to own however equity market performance over the next few months would bring in some volatility which is why cash levels have been increased to benefit from this. The Fund has built some exposure into AGIL (Agri Autos Limited a House of Habib Company) recently where we believe the company will be a big beneficiary of improving Auto sales especially in a low interest rate environment, new products being launched by the company along with a very stable business model with roughly no foreign exchange risk would help in valuations being unlocked further.

Disclosure for WWF Liability under Circular 17 of 2012 The Scheme has maintained provisions against Worker's Welfare Fund’s (WWF) liability to the tune of Rs. 2,977,965, if the same were not made the NAV per unit/return of the Scheme would be higher by Rs. 9.86(ESF), Rs. 1.45 (DSF), Rs. 1.16 (MMF) / 1.7% (ESF), 0.8% (DSF), 0.7% (MMF). For details investors are advised to read the Note 6.1 of the latest Financial Statements of the Scheme. However, from July 01, 2015 WWF is not being charged. 1 Annualized performance return is based as per MUFAP stated methodology.

Performance (%) 1M 1Y 3Y 5Y Launch

Equity Sub Fund 2.94 7.71 105.99 270.74 467.81Debt Sub Fund 1 5.90 3.83 15.45 37.68 85.60MM Sub Fund 1 3.55 2.65 15.51 35.16 62.42 Monthly performance (%) Annualized performance1

Equity Debt 1 MM 1

FY16 FY15 FY16 FY15 FY16 FY15July 1.17 2.68 6.74 0.61 5.24 2.72August -1.58 -7.17 5.08 0.14 4.85 1.32September -6.20 10.70 2.54 0.77 0.23 1.76October 6.14 4.65 2.59 5.98 2.49 6.19November -4.74 6.66 1.40 -8.03 0.45 0.64December 3.41 3.64 7.28 5.58 5.33 5.77January 1.24 5.39 -1.35 11.85 0.07 12.56February -5.26 0.20 -0.89 6.53 -0.85 6.12March 3.61 -9.73 8.66 7.07 3.42 7.32April 3.41 10.35 4.02 6.37 2.25 7.13May 2.94 -1.38 5.90 6.46 3.55 6.71June 4.26 2.64 3.98YTD 3.30 32.03 3.91 3.90 2.51 5.32 Asset allocation (%) Equity May-16 Apr-16Cash 24.34 7.33 Equity 75.43 89.76 Other including receivables 0.23 2.91 Total 100.00 100.00 Debt May-16 Apr-16Cash 7.81 13.71 IJARA Sukuk Bond 90.04 84.64 Other including receivables 2.15 1.66 Total 100.00 100.00 Money Market May-16 Apr-16Cash 62.90 63.91 IJARA Sukuk Bond 35.73 34.93 TDR - - Other including receivables 1.37 1.15 Total 100.00 100.00 Equity sector breakdown (%)

May-16 Apr-16Cement 16.38 19.61 Automobile Assembler 11.96 11.41 Pharmaceuticals 8.11 8.39 Automobile Parts & Accessories 7.61 7.05 Fertilizer 7.53 5.89 Others 23.85 37.41 Total 75.43 89.76 Top holding (%age of total assets) Cherat Cement Co. Ltd. 8.77 Agriautos Industries Ltd. 7.61 Rafhan Maize Products Ltd. 6.40 Pakistan State Oil Co. Ltd. 6.33 Abbott Laboratories Pakistan Ltd. 6.16 HinoPak Motors Ltd. 6.03 Pak Suzuki Motor Co. Ltd. 5.92 Synthetic Products Enterprises Ltd. 5.90 Fauji Fertilizer Bin Qasim Ltd. 5.74 D. G. Khan Cement Co. Ltd. 5.59

market review - js investments · market review may 2016 economy headline inflation continued its...

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