Analyst
Muhammad Usman
muhammad.usman@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
PACRA Assigns Initial Stability Rating to NBP Government Securities Plan - I
Rating Type | Stability Rating | |
Current (28-Feb-19 ) |
||
Action | Initial | |
Long Term | AA-(f) | |
Short Term | - | |
Outlook | Stable | |
Rating Watch | - |
The rating incorporates the fund's very strong credit quality and moderate liquidity profile emanating from the fund's strategy to invest most of its funds in government securities (PIBs). The projected asset allocation of the fund includes ~10% Bank Deposits in 'AA-" and above rated' banks, whilst maintaining ~90% of the funds' AUMs in PIBs 'AAA rated'. The projected duration of the fund would be ~700 days, resulting in high exposure to interest rate volatility. The unit holding pattern of the fund is expected to be ~50% each in institutional and retail investors.
Going forward, the fund will be maintaining its exposure in government bonds. 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, 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-seven funds.