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The Pakistan Credit Rating Agency Limited
Press Release

Date
18-Oct-21

Analyst
Madiha Sohail
madiha.sohail@pacra.com
+92-42-35869504
www.pacra.com

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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 Stability Rating of NBP Islamic Daily Dividend Fund

Rating Type Stability Rating
Current
(18-Oct-21)
Previous
(16-Apr-21)
Action Maintain Maintain
Long Term AA(f) AA(f)
Short Term - -
Outlook Stable Stable
Rating Watch - -

NBP Islamic Daily Dividend Fund (or the "Fund") is a low risk profile fund. The Investment Policy states that a minimum of 10% must be invested in Cash and Cash Equivalents. At end Jun'21, the total cash balances placed at Banks rated mostly 'AA' and above were 85.96% and hence, the Fund is in line with it's Investment Policy. Furthermore, the Fund's total assets were divided with a percentage of 12.9% in Commercial Paper with entities rated 'AA'. The duration of the Fund was 11 days, at end Jun'21. This minimizes the Fund's exposure to interest rate risk. At end Jun'21 The unit holding pattern of the Fund is high with the top 10 investors contributing 72.61% of the total assets. This results in higher redemption pressure but the risk is mitigated due to the highly liquid nature of the Fund.
Going forward, the fund intends to maintain its current asset allocation. Material changes in the fund's asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk will impact the rating.

About the Entity
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 168,016mln at end-Jun'21, 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.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.