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The Pakistan Credit Rating Agency Limited
Press Release

Date
17-Apr-20

Analyst
Afnan Iqbal
afnan.iqbal_old@pacra.com_old
+92-42-35869504
www.pacra.com

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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-20 )
Previous
(18-Oct-19 )
Action Maintain Maintain
Long Term AAA(f) AAA(f)
Short Term - -
Outlook Stable Stable
Rating Watch - -

The rating reflects strong credit quality and liquidity profile of the fund. This emanates from maintaining a high exposure to government securities ~41% at end Dec-19. Fund's average exposure towards interest rate risk was low. The unit holding pattern of the fund represents moderate liquidity risk as top 10 investors represent 74% of the fund's assets at end Dec-19. Comfort can be drawn from the liquid nature of the investments.
Going forward, the fund intends to maintain its asset allocation towards goverment securities and bank deposits. Material changes in the fund's asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk, would affect the rating.

About the Entity
NBP Fund Management Limited, established in 2005, is licensed by Securities and Exchange Commission (SECP) to carry out asset management and investment advisory business. National Bank of Pakistan is the largest shareholder of the company with a stake of ~54%. During the year, Baltoro Growth Fund acquired the entire 36% stake of Alexandra Fund Management Private Limited in the company. Baltoro Capital is a Pakistan focused private equity firm. Baltoro has made three investments in the pharmaceutical, renewable energy and financial services sectors. It is actively deploying its funds in businesses positioned to achieve extraordinary growth. The CEO of NBP Fund Management Limited, Dr. Amjad Waheed, CFA and family also holds a 10% stake in the company.

The Company’s nine-member Board of Directors includes three independent directors and the CEO. During FY19 and 1QFY20 there have been four new inductions on the Board of Directors. With overall assets under management of ~PKR 111,842 mln at end Dec-19, the Company is currently managing twenty seven open-end funds and two voluntary pension schemes under thirteen different categories.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.