The Pakistan Credit Rating Agency Limited
18-Oct-21
Analyst
Madiha Sohail
madiha.sohail@pacra.com
+92-42-35869504
www.pacra.com
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PACRA Maintains Stability Rating of NBP Riba Free Saving Fund
| Rating Type | Stability Rating | |
|
Current (18-Oct-21 ) |
Previous (16-Apr-21 ) |
|
| Action | Maintain | Maintain |
| Long Term | A+(f) | A+(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
NBP Riba Free Savings Fund (or the "Fund") is an open‐end Islamic Income Scheme with a medium level risk profile. At end Jun'21, the Fund had placed ~44.7% of assets in Bank Deposits with banks mostly rated 'AA' and above. The remaining funds were invested in Sukuk, GoP Ijara Sukuk and commercial papers. The unit holding pattern of the Fund is moderately concentrated, top ten investors represent ~34% of the funds assets and thus, reduces redemption pressure. The average duration of the Fund was 50 days at end Jun'21. This strengthens the Fund's risk profile against interest rate risk.
Going forward, the fund intends to increase asset allocation with banks in low credit risk avenues (mostly in AA category and occasionally higher spectrum of A). Material changes in the fund's asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk, would affect 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.