PACRA Maintains Stability Rating of NAFA Government Securities Savings Fund
|Rating Type||Stability Rating|
The objective of the fund is to provide competitive return from a low credit risk portfolio by investing primarily in Government Securities.
The rating reflects the fund's strong credit profile emanating from its investment policy to invest at least 70% in Government Securities (PIBs, T-bills) and remaining investments will be in bank deposits and money market placements etc. At end-May 17, 73.3% of the fund’s assets were invested in Government securities, all T-Bills. The remaining assets of the fund were invested with banks as banking deposits with 'AAA' rating (0.6%), 'AA+' rating (1.4%) and below ‘AA+’/above ‘A-’ (24.8%). On monthly average basis, the duration of the fund was 29 days in May-17. The unit holding pattern of the fund was highly concentrated towards top 10 investors representing 67% of the portfolio, this exposes fund towards redemption pressure.
Going forward, the rating remains dependent on maintaining at least 70% allocation towards government securities with portfolio duration not exceeding 2 years. PACRA would monitor compliance against agreed parameters on monthly average basis.
NAFA was incorporated in August 2005. National Bank of Pakistan (NBP) is the major shareholder of NAFA with 54% stake, followed by Alexandra Fund Management Pte. Ltd - 36% stake. With an asset base of PKR ~2trl at end-Dec16, NBP is the one of the country's largest commercial bank. The CEO of NAFA holds a stake of 10% in the company. Presently, the company is managing a diversified portfolio of 22 open-end funds (12 Shariah compliant & 10 conventional), two pension schemes and several discretionary portfolios with AUM of PKR 109bln at end May-17.
NAFA’s nine-member BoD comprises the company’s CEO, three representatives of NBP, two representatives of Alexandra Fund and three independent directors. During the year Mr. Nausherwan Adil – Senior Executive Vice President & Group Chief Operations of NBP, is the chairman of the board. The founding CEO, Dr. Amjad Waheed, CFA, holds a Doctorate in Business Administration; he has extensive experience in domestic and international capital markets. He is supported by an experienced and qualified team of professionals.