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 Money Market Fund
| Rating Type | Stability Rating | |
|
Current (17-Apr-25 ) |
Previous (10-Oct-24 ) |
|
| Action | Maintain | Maintain |
| Long Term | AA(f) | AA(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
NBP Islamic Money Market Fund ('NIMMF' or the 'Fund') is a low-risk profile fund. The investment objective of the Fund is to provide competitive return with maximum possible capital preservation by investing in low risk and liquid Shariah Compliant authorized instruments. The assigned rating reflects the Fund's strong credit and interest rate risk profile emanating from its investment strategy. Regarding asset allocation, the Fund had invested ~28.2% in Cash, ~21.5% in GoP Ijarah, ~21.4% in Money Market Placements, ~13.6% in Short Term Sukuk, ~12.3% in Placements with Banks and DFIs (Islamic), with the remainder in other assets and receivables as of end-December 2024. In terms of credit quality, the Fund maintained compliance with rating criteria through its allocations: ~55.2% to Government Securities/AAA-rated instruments, ~15.1% to AA+, ~12.7% to AA, with the balance in other categories. The Fund's duration stood at 73 days with a WAM of 79 days at end-December 2024, reflecting low credit risk exposure. The top ten investor concentration of 40.14% as of Dec'24 indicates moderate 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).