Analyst
Muhammad Junaid
muhammad.junaid@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
PACRA Maintains Stability Rating of NBP Islamic Savings Fund
Rating Type | Stability Rating | |
Current (22-Mar-22 ) |
Previous (22-Sep-21 ) |
|
Action | Maintain | Maintain |
Long Term | AA-(f) | AA-(f) |
Short Term | - | - |
Outlook | Stable | Stable |
Rating Watch | - | - |
NBP Islamic Savings Fund (or the ‘Fund’) is a medium risk-profile fund. The assigned rating reflects the Fund's strong credit and interest rate risk profile emanating from its investment strategy. At the end-Dec'21, the Fund had placed ~70% of its net assets primarily 'A+' banks. However, the average allocation in 'A+' rated banks remained ~25% during CY21. The Fund had invested ~15% of its net assets in AA+ rated Certificate of Musharaka. The Fund had also invested ~12% of AUMs in ICPs rated AA and above. The WAM of Fund was 21 days at the end-Dec’21, which shields the fund from credit risk. The average duration of the Fund was within 45 days, reflecting relative immunity of the Fund from interest rate risk. At end-Dec'21, the top ten investors' concentration stood at ~32% representing a moderate level of redemption pressure.
Going forward, the Fund will invest per its authorized investment policy, however, the allocations will be diversified in line with market outlook. Material changes in the Fund's asset allocation strategy, impacting its credit quality and/or average duration, would affect the rating.
About
the Entity
NBP Fund Management Limited (or the "Company"), established in 2005, is licensed by Securities and Exchange Commission (SECP) to carry out asset management and investment advisory business. National Bank of Pakistan is the largest shareholder of the company with a stake of ~54%. In 2019, Baltoro Growth Fund has acquired the entire 36% stake of Alexandra Fund Management Private Limited in the Company. Baltoro Capital is a Pakistan focused private equity firm. Baltoro Capital has made investments in the pharmaceutical, renewable energy and financial services sectors in Pakistan. It is actively deploying its funds in businesses positioned to achieve extraordinary growth. The CEO of NBP Fund Management Limited, Dr. Amjad Waheed, CFA and family also holds a 10% stake in the company.
The Company’s nine-member Board of Directors includes three independent directors and the CEO. With overall assets under management of PKR 169,025mln at end-Dec'21, the Company is currently managing a diversified fund slate of twenty seven open-end mutual funds, two voluntary pension schemes and an Exchange Traded Fund.