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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

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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 NAFA Government Securities Liquid Fund

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

The fund's mandate is to generate optimal return with minimum risk, to provide liquidity and reasonable income to its unit holders by investing primarily in short-term Government Securities.

The rating reflects strong credit quality of the fund. This emanates from maintaining a high exposure to government securities and low duration against interest rate risk. The fund continued to remain heavily invested in T-Bills. Fund's average exposure towards interest rate risk was sizeable minimal. In Dec-17, the average duration of the fund was 20 days. This has provided immaculate shield to the fund's NAV against risk of volatility affecting its pricing. The unit holding pattern of the fund emanates moderate liquidity risk as top 10 investors represents 69% of the fund's assets at end-Dec 17,


Going forward, the rating remains dependent on maintaining at least 70% allocation towards AAA exposure with portfolio duration not exceeding 45 days. Meanwhile, the remaining assets of the fund must be placed with scheduled banks having very strong credit quality. PACRA would monitor compliance against agreed parameters on monthly average basis.

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.