logo
The Pakistan Credit Rating Agency Limited
Press Release

Date
30-Jun-18

Analyst
Shahzaib Khalid
shahzaib.khalid@pacra.com
+92-42-35869504
www.pacra.com

Applicable Criteria

Related Research

Disclaimer
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 Maintain Stability Rating of NAFA Active Allocation Riba Free Savings Fund

Rating Type Stability Rating
Current
(30-Jun-18 )
Previous
(12-Jul-17 )
Action Maintain Maintain
Long Term A-(f) A-(f)
Short Term - -
Outlook Stable Stable
Rating Watch - -

The objective of the fund is to earn a reasonable rate of return along with a high degree of liquidity by investing in short-term Shariah compliant products. This fund is exclusively built for investment of fixed income portions of "fund of funds" schemes of NAFA.

Currently, 'NAFA Islamic Active Allocation Plan I', 'NAFA Islamic Active Allocation Plan II', 'NAFA Islamic Active Allocation Plan III', ‘NAFA Islamic Active Allocation Plan IV’, ‘NAFA Islamic Active Allocation Plan V’, ‘NAFA Islamic Active Allocation Plan Vl’, ‘NAFA Islamic Active Allocation Plan Vll’ and ‘NAFA Islamic Active Allocation Plan VIll’ have invested their fixed income portions in this fund. The unit holding pattern of these plans combined is highly concentrated with top 10 investors contributing 100% to the plans. Fund has (53%) exposure in banking deposit with 'AAA' rated bank, 'A+' rated bank (29.3%), 'AA-' rated bank (15%) and A- rated bank (17%) at end-Dec17.
Going forward the fund intends to maintain 20 % of its exposure in GoP bonds while 10% would be kept with banks rated 'A-' & above. Remaining exposure would be in sukuks with rating 'AA-' & above. Material changes in the fund's asset allocation strategy, which could negatively impact the fund's credit quality and exposure to interest rate risk, remains critical for the rating.

About the Entity
NBP Fund Management Limited (Formerly: NBP Fullerton Asset Management Limited), established in 2005, is licensed by Securities and Exchange Commission (SECP) to carry out asset management and investment advisory business. NBP is the largest shareholder of the AMC with a stake of ~54%, followed by Alexandra Fund Management Pte. Ltd ~36% stake. The CEO of NBP Fund, Dr. Amjad Waheed, also holds a stake of 10% in the company.

Company nine-member Board of Directors comprise the company’s CEO, three representatives of NBP, two representatives of FFMG and three independent directors. During the year Mr. Mudassir Husain Khan and Mr. Tariq Jamali joined the company’s board as a Non-Executive directors, both are the representatives of the bank. The company is currently managing a diversified fund slate of twenty funds in the categories of asset allocation, income, equity and money market.

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.