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
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 Government Securities Liquid Fund
| Rating Type | Stability Rating | |
|
Current (17-Apr-25 ) |
Previous (27-Sep-24 ) |
|
| Action | Maintain | Maintain |
| Long Term | AAA(f) | AAA(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
NBP Government Securities Liquid Fund ('NGSLF' or the 'Fund') is a very low-risk profile fund. The investment objective of the Fund is to generate optimal return with minimum risk, to provide easy liquidity and reasonable income to its unit holders by investing primarily in short-term Government Securities. The assigned rating reflects the Fund's strong credit and interest rate risk profile emanating from its low-risk investment strategy. As of December 2024, in terms of asset allocation, the Fund had invested ~95.8% in ST Govt Securities (T-Bills), ~4% in Cash, and ~0.2% in Others. From a credit quality perspective, the Fund had allocated ~97.6% to AAA-rated avenues, ~2.1% to AA+, and the remaining ~0.2% to other rated avenues. Both the Weighted Average Maturity (WAM) and duration of the Fund stood at 79 days as of end-December 2024, effectively limiting both interest rate risk and credit risk. A key concern remains the high top-ten investor concentration (~78.09%), which exposes the Fund to potential redemption pressure. This redemption risk is mitigated through the Fund's predominant investment in short-term government securities (T-Bills: ~95.8%).
Going forward, any material changes in the investment policy or the 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).