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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 Islamic Income Fund (Formerly; NAFA Islamic Aggressive Income 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 investment objective of the fund is to earn reasonable rate of return for its unit holders by constructing a portfolio primarily invested in Shariah compliant money market and debt securities.

Currently, fund's exposure with sukuk is 12%, while 79% of the fund's assets are exposed as banking deposits with banks rated 'A-' & above. Exposure with 'AAA' rated banks was 27% whereas with A+ and A- rated banks exposure was 8% and 43% respectively at end-Dec 17. The unit holding pattern of the fund is reasonably concentrated with top10 investors representing 36% of the fund's total assets.
The fund intends to maintain its allocation towards bank placements (50%). The remaining assets (30%) will be invested in Shariah compliant government securities and good quality debt instruments. Material changes in the fund's asset allocation strategy, which could negatively impact the fund's credit quality and exposure to interest rate risk, remain 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.