PACRA Maintains Stability Rating of NBP Islamic Money Market Fund
|Rating Type||Stability Rating|
The rating reflects adequate strength of the fund's credit and interest rate risk profile.The objective of the Fund is the maximum possible capital preservation by investing in low risk and liquid Shari’ah Compliant authorized instruments.As per the authorised investment policy, the fund may invest in shariah compliant government securities up-to 100% of the net assets and the policy also dictates a maximum 90% allocation in TDR and other placements. The weighted average time to maturity of net assets shall not exceed 3-months(90-days).The Benchmark is 3-months average deposit rates of three (3) AA rated Islamic Banks or Islamic windows of Conventional Banks. At end Dec'20, ~31% of fund's assets were placed with banks rated 'AA' and above, with ~47% in bank deposits while remaining funds were allocated to Sukuks and commercial papers. The unit holding pattern of the fund is slightly concentrated with top ten investors representing ~48% of the fund's assets, this exposes the fund to moderate level of redemption pressure.
Going forward, in accordance with the investment policy the fund may increase its exposure in govt securities and invest the remaining assets with banks while keeping under consideration the market expectation. Material changes in the fund's asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk, would affect the rating.
NBP Fund Management Limited (or the "Company"), 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%. In 2019, Baltoro Growth Fund has acquired the entire 36% stake of Alexandra Fund Management Private Limited in the Company. Baltoro Capital is a Pakistan focused private equity firm. Baltoro Capital has made investments in the pharmaceutical, renewable energy and financial services sectors in Pakistan. It is actively deploying its funds in businesses positioned to achieve extraordinary growth. The CEO of NBP Fund Management Limited, Dr. Amjad Waheed, CFA and family also holds a 10% stake in the company.
The Company’s nine-member Board of Directors includes three independent directors and the CEO. With overall assets under management of PKR 163,473mln at end-Dec'20, the Company is currently managing a diversified fund slate of twenty eight open-end mutual funds, two voluntary pension schemes and an Exchange Traded Fund.