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The Pakistan Credit Rating Agency Limited
Press Release

Date
09-Apr-24

Analyst
Hassaan Ahmad
Hassaan.Ahmad@pacra.com
+92-42-35869504
www.pacra.com

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This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA

PACRA Maintains Stability Rating of NBP Riba Free Saving Fund

Rating Type Stability Rating
Current
(09-Apr-24 )
Previous
(13-Oct-23 )
Action Maintain Maintain
Long Term A+(f) A+(f)
Short Term - -
Outlook Stable Stable
Rating Watch - -

NBP Riba Free Saving Fund (or the Fund) is a low-risk profile fund. The investment objective of the Fund is to provide preservation of capital and earn a reasonable rate of return along with a high degree of liquidity by investing in short-term Shariah compliant banks and money market / debt securities. The Fund had invested ~52% in GoP Ijarah Sukuks and Government backed security, ~32.4% in bank deposits, placements & other banking instruments in AA category and ~12% in Placements with NBFIs in AA category at the end Dec’23. The duration of the Fund stood at 78 days at the end Dec’23, exposing low interest rate risk. The WAM of the Fund stood at 546 days at the end Dec’23, exposing high credit risk due to the Fund’s investment in GOP Ijara Sukuks. However, investment in Govt securities mitigate the overall credit risk. The unit holding pattern of the Fund stood at ~16.45% at the end Dec’23 representing top ten investor concentration; exposing the Fund to a low level of redemption pressure.
Going forward, any material changes in the investment policy and/or compliance with the rating criteria for the assigned rating would have an impact on the ratings.

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 ~268bln at end-Dec'23, the Company is currently managing a diversified fund slate of twenty five open-end mutual funds, two voluntary pension schemes and one Exchange Traded Fund.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.