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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 BMA Chundrigar Road 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 fund primarily invests in all fixed income and money market instruments of medium risk and short duration with the objective of providing high regular income to its unit holders.

The rating reflects the fund's average credit quality and liquidity profile. At end-Dec17, the fund is invested in PIBs (5%), while exposure as cash was 83%. The exposure was with banks rated 'A-' & above with highest exposure in ‘A-’ (71%). The unit holding pattern of the fund is highly concentrated with the top10 investors representing 80% of the net assets. However, this risk is mitigated by sizeable investment (27%) of the management company.
Going forward, the fund intends to maintain its exposure towards cash with banks rated A- and above. The main risk factors affecting the stability of returns are sensitivity of government securities to changes in interest rates. 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
BMA Asset Management Company (BMA AMC), incorporated in July 2006 as a public unlisted company, is licensed to carry out asset management and investment advisory services under the Non-Banking Finance Companies Regulations. The company is a majorly owned subsidiary of BMA Capital Management. The company has a limited fund slate (currently managing two funds) and the portfolio has decreased by ~15% in CY17. In terms of AUMs, it stood at ~PKR 7,728mln in Dec-17 (~PKR 9,059mln in Dec-16).

BMA AMC has a five member board including CEO. The other board member comprises three independent directors. Mr. Salim Khan appointed as a chairman of the board in October 2017 board election. He possess vast experience in Strategic Human Resource Consultancy and Organizational Development.

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.