The Pakistan Credit Rating Agency Limited
04-Dec-18
Analyst
Muhammad Usman
muhammad.usman@pacra.com
+92-42-35869504
www.pacra.com
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Related Research
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PACRA Maintains Stability Rating of NAFA Saving Plus Fund
| Rating Type | Stability Rating | |
|
Current (04-Dec-18 ) |
Previous (30-Jun-18 ) |
|
| Action | Maintain | Maintain |
| Long Term | AA-(f) | AA-(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
The objective of the fund is to minimize risk, preserve capital and generate a reasonable return along with a high degree of liquidity from a portfolio primarily constituted of bank deposits and money market instruments.
The rating reflects the fund's good credit quality, sound liquidity profile. The fund's low risk emanates from its investment policy of maintaining a sizeable proportion of placements with commercial banks predominantly rated in 'AA-' and 'AA+' category. At end-Jun 18, fund's exposure with banks was 77%, MTS was 18% and T-Bills was 5%. The majority of the exposure was with 'AA-' rated banks i.e. 24%. The other major avenue is MTS, which due to self-liquidating nature possesses less risk over short tenure. The fund's unit holding pattern remains adequately diversified with top 10 investors representing 54% of the fund's assets at end-Jun-18.
Going forward, the fund intends to maintain its investments in Government securities, MTS with rest of the assets invested in cash and placements with well-rated banks. 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 Baltoro Growth Fund ~36% stake which they acquired from Alexandra Fund Management Pte. Ltd. The CEO of NBP Fund Management Limited, Dr. Amjad Waheed, also holds a 10% stake in the company.
The company’s nine-member Board of Directors include three independent directors and the CEO. During the year Mr. Mudassir Husain Khan and Mr. Tariq Jamali joined the company’s board as a Non-Executive director, both are the representatives of the bank. The company is currently managing a diversified fund slate of twenty-five funds.