Analyst
Shahzaib Khalid
shahzaib.khalid@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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.