The Pakistan Credit Rating Agency Limited
17-Oct-19
Analyst
Afnan Iqbal
afnan.iqbal_old@pacra.com_old
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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 the Stability Rating of BMA Chundrigar Road Savings Fund.
| Rating Type | Stability Rating | |
|
Current (17-Oct-19 ) |
Previous (17-Apr-19 ) |
|
| Action | Maintain | Maintain |
| Long Term | A+(f) | A+(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
The rating reflects the fund's average credit quality and liquidity profile. At end‐Jun'19, the fund is invested in cash (75%), while exposure as T‐Bills was 13%.
The exposure was with banks rated 'A‐' & above with highest exposure in ‘A‐’ (77%). The unit holding pattern of the fund is highly concentrated with the top
10 investors representing 93% of the net assets. However, this risk is mitigated by sizeable investment (75%) 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 was incorporated in April 2005 and acquired the license for investment advisory and asset management in April 2005 and July 2005 respectively. The ex-CEO of the company, Mr. Khaldoon bin Latif resigned in Nov-18 and the position of CEO is currently vacant. The company is in the process of hiring a new CEO. The management team comprises seasoned professionals and the majority of the personnel have been with the company for more than a decade. The company has a limited fund slate (currently managing two funds). In terms of AUMs, it stood at ~PKR 282 mln in Jun-19.
The company has a five-member board, including the CEO, out of which two members are independent directors. Mr. Salim Khan was appointed as the chairman of the board in October 2017. He possesses vast experience in strategic human resource consultancy and organizational development.