The Pakistan Credit Rating Agency Limited
19-Apr-22
Analyst
Muhammad Junaid
muhammad.junaid@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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PACRA Maintains Stability Rating of NBP Money Market Fund
| Rating Type | Stability Rating | |
|
Current (19-Apr-22 ) |
Previous (18-Oct-21 ) |
|
| Action | Maintain | Maintain |
| Long Term | AA(f) | AA(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
NBP Money Market Fund (or the "Fund") is a low-risk profile fund. The Fund aims to provide stable income stream with preservation of capital by investing in AA and above rated banks and money market instruments. The assigned rating reflects very strong capacity to maintain relative stability in returns and respond to stress situations. As of end-Dec’21, the fund has invested ~99% of its net assets in ‘AA+’ and higher-rated banks emanating in low WAM and duration. Both the WAM and duration stood at 1 day at end-Dec’21. Accordingly, the Fund is shielded from interest rate risk. The investor base of the Fund is moderately diversified as the top 10 investor concentration stood at 42% at end-Dec'21. Therefore, it can be ascertained that the Fund is subject to moderate level of redemption pressure.
Going forward, in accordance with the investment policy the fund intends to maintain its current asset allocation. Material changes in the fund's asset allocation will impact the credit 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.