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 Islamic Income Fund
| Rating Type | Stability Rating | |
|
Current (17-Apr-25 ) |
Previous (10-Oct-24 ) |
|
| Action | Maintain | Maintain |
| Long Term | A+(f) | A+(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
NBP Islamic Income Fund ('NIIF' or the 'Fund') is a moderate-risk profile fund. The investment objective of the Fund is to provide competitive returns by investing in Shariah compliant debt securities and money market instruments. The assigned rating reflects the Fund's moderate credit and interest rate risk profile emanating from its investment strategy. In terms of asset class, the Fund had allocated ~40.1% in GoP Ijarah, ~26% in Cash in Bank, ~16% in Placement against Bai-Muajjal, ~10.1% in Placement in Bank/DFIs, ~3.9% in TFC/Sukuk, ~1.5% in Govt Backed Securities, and ~2.4% in Others including receivables at the end Dec-2024. In the perspective of credit quality, the Fund was in line with the rating criteria and had invested ~55.5% in Govt Backed/AAA rated avenues, ~21.5% in A+, ~11.90% in AA-, and the remaining were invested in other categories. The duration of the Fund stood at 87 days at the end December 2024. The WAM of the Fund stood at 303 days, which indicates credit risk at the higher end of moderate spectrum. At the end of Dec'24, the top ten investor concentration stood at 18.18% which indicates low redemption pressure.
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).