The Pakistan Credit Rating Agency Limited
Press Release


Madiha Sohail

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 Upgrades Stability Rating of NBP Islamic Daily Dividend Fund

Rating Type Stability Rating
(28-Sep-22 )
(19-Apr-22 )
Action Upgrade Maintain
Long Term AA+(f) AA(f)
Short Term - -
Outlook Stable Stable
Rating Watch - -

NBP Islamic Daily Dividend Fund (or the "Fund") is a low-risk profile fund. The assigned rating reflects strong capacity to uphold the stability of returns and respond to stress situations. The Fund adhere to meet the criteria for upgrade rating from AA to AA+. The Fund has invested ~87.7% of its net assets in banks mainly rated AAA, ~6.2% in short term Sukuks whereas 4.5% in placement with banks/DFI. The duration and the WAM both decreased to 6 days at the end Jun’22 (Dec’21: 32 days), limiting the exposure to interest rate and credit risk. The Fund is subject to high redemption pressure due to high top 10 investor concentration, which stood at 67% at end-Jun’22.. However, the highly liquid nature of the Fund provides cushion against the redemption pressure.
Going forward, the fund intends to maintain its current asset allocation. Material changes in the fund's asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk will impact the rating.

About the Entity
NBP Fund Management Limited (or the "Company"), 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%. In 2019, Baltoro Growth Fund has acquired the entire 36% stake of Alexandra Fund Management Private Limited in the Company. Baltoro Capital is a Pakistan focused private equity firm. Baltoro Capital has made investments in the pharmaceutical, renewable energy and financial services sectors in Pakistan. 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. With overall assets under management of PKR 177,186mln at end-Jun'22, the Company is currently managing a diversified fund slate of twenty five open-end mutual funds, two voluntary pension schemes and one Exchange Traded Fund.

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.