The Pakistan Credit Rating Agency Limited
28-Dec-18
Analyst
Muhammad Usman
muhammad.usman@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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PACRA Assigns Initial Stability Rating to NBP Aitemaad Mahana Amdani Fund
| Rating Type | Stability Rating | |
|
Current (28-Dec-18 ) |
||
| Action | Initial | |
| Long Term | A(f) | |
| Short Term | - | |
| Outlook | Stable | |
| Rating Watch | - | |
The objective of the fund is to provide monthly income to investors by investing in Shariah Compliant money market and debt avenues. The rating incorporates the fund's good credit quality and sound liquidity profile emanating from the fund's strategy to invest in good quality shariah compliant instruments. At end Oct-18, ~99% of the fund's net assets were invested as cash with banks. The fund has a diversified unit holding pattern, with top 10 investors representing ~95% of the fund size, of which ~61% are group’s own investments, which exposes the fund to a low level of redemption pressure.
Going forward, the fund intends to maintain its exposure in cash. 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, there has been some new induction in the Board of Directors, the AMC is waiting for the SECP approval. The company is currently managing a diversified fund slate of twenty-six funds.