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 Riba Free Saving 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 Riba Free Saving Fund ('RFSF' or the 'Fund') is a moderate-risk profile Fund. The investment objective of the Fund is to provide preservation of capital and earn a reasonable rate of return along with a high degree of liquidity by investing in short-term Shariah compliant banks and money market / debt securities. In terms of asset allocation at end-Dec'24, most investment was held in banks in the form of cash & placements (~44%), followed by Bai Muajjal (~24.9%), placements in NBFs (~13.7%), with the remainder invested in others. In perspective of credit quality as of end-Dec'24, the Fund's investments comprised ~27.6% in AA+ rated avenues, ~18.5% in AA rated avenues, ~17.1% in AAA/Government Securities rated avenues, ~10.7% in AA- rated avenues, with the balance in other categories. The Fund's asset quality is adequate and in line with the rating criteria at end-Dec'24. Both duration and WAM stood at 35 days and 28 days respectively at end-Dec'24, effectively limiting interest rate and credit risk. The top ten investor concentration of ~59.55% exposes the Fund to high 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).