The Pakistan Credit Rating Agency Limited
17-Apr-25
Analyst
Usama Ali
usama.ali@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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PACRA Maintains Stability Rating of NBP Financial Sector Income Fund
| Rating Type | Stability Rating | |
|
Current (17-Apr-25 ) |
Previous (27-Sep-24 ) |
|
| Action | Maintain | Maintain |
| Long Term | A+(f) | A+(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
NBP Financial Sector Income Fund ('NFSIF' or the 'Fund') is a moderate-risk profile fund with an investment objective to provide income enhancement and capital preservation through investments in prime quality financial sector TFCs/Sukuks, bank deposits, and short-term money market instruments. In terms of asset allocation as of end-December 2024, the Fund had invested ~43% in Cash, ~26% in Money Market Placements, ~17% in T-Bills, ~5% in PIBs, ~2% in TFCs, and ~2% in MTS. From a credit quality perspective, allocations included ~35% in AAA-rated avenues, ~23.9% in A+, ~15.1% in A, ~13.6% in AA, ~5% in AA+, with the remainder in other rated avenues. The Fund's Weighted Average Maturity (WAM) stood at 150 days while its duration was 80 days as of end-December 2024, reflecting credit risk exposure but limited interest rate risk. The unit holding pattern showed high concentration risk with the top 10 investors representing ~53.86% of net assets, creating significant redemption risk.
Going forward, any material changes in the investment policy or devised rating criteria for the assigned rating would have an impact on the ratings.
About
the Entity
NBP Fund Management Limited (the "Company"), established in 2005, is licensed by the Securities and Exchange Commission of Pakistan (SECP) to carry out asset management and investment advisory services. The National Bank of Pakistan is the largest shareholder of the company, with a ~54% stake, followed by Baltoro Growth Fund (~36%) and individual investors (~10%). The CEO of NBP Fund Management Limited, Dr. Amjad Waheed, CFA, has over 25 years of experience in mutual funds and portfolio management. The Company’s eight-member Board of Directors includes three independent directors and the CEO. With total assets under management of ~PKR 575bln as of December 2024, the Company manages a diversified portfolio of twenty-six open-end mutual funds, four voluntary pension schemes, and one exchange-traded fund (ETF).