Analyst
Afnan Iqbal
afnan.iqbal_old@pacra.com_old
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
PACRA Maintains the Stability Rating of NBP Financial Sector Income Fund.
Rating Type | Stability Rating | |
Current (18-Oct-19 ) |
Previous (18-Apr-19 ) |
|
Action | Maintain | Maintain |
Long Term | A+(f) | A+(f) |
Short Term | - | - |
Outlook | Stable | Stable |
Rating Watch | - | - |
The rating reflects the fund's good credit quality, modest liquidity profile and its mandate of maintaining minimum exposure of 70% at all times in the financial
sector. At end‐Jun 19, the portfolio of the fund was primarily invested as bank deposits (78%). Exposure to interest rate risk is moderate as the duration of the fund did not exceed 13 days. The unit holding pattern of the fund is moderately concentrated with top 10 investors representing 25% of the fund's assets.
Going forward, the fund plans to maintain its current asset allocation towards bank deposits. 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
NBP Fund Management Limited, established in 2005, is licensed by Securities and Exchange Commission (SECP) to carry out asset management and investment advisory business. National Bank of Pakistan is the largest shareholder of the company with a stake of ~54%. During the year, Baltoro Growth Fund acquired the entire (36%) stake of Alexandra Fund Management Pte. Ltd. in the company. Baltoro Capital is a Pakistan focused private equity firm. Baltoro has made three investments in the pharmaceutical, renewable energy and financial services sectors. It is actively deploying its funds in businesses positioned to achieve extraordinary growth. 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 company is currently managing a diversified fund slate of thirty-four mutual funds and two pension funds.