The Pakistan Credit Rating Agency Limited
12-Jul-17
Analyst
Mohsin Naseer
mohsin.naseer@pacra.com
+92-42-35869504
www.pacra.com
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Related Research
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PACRA Maintains Stability Rating of BMA Chundrigar Road Savings Fund
| Rating Type | Stability Rating | |
|
Current (12-Jul-17 ) |
Previous (13-Dec-16 ) |
|
| Action | Maintain | Maintain |
| Long Term | A+(f) | A+(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
The fund primarily invests in all fixed income and money market instruments of medium risk and short duration with the objective of providing high regular income to its unit holders.
The rating reflects the fund's good credit quality and sound liquidity profile. At end-May17, the fund is invested in PIBs (6%), while exposure as cash was 34%. The exposure was with banks rated 'A-' & above with highest exposure in ‘A’ (33.2%). The remaining portfolio of the fund was invested in Debt Instruments (24.5%) and Terms deposits (33.7%). The unit holding pattern of the fund is highly concentrated with the top10 investors representing 90% of the net assets. However, this risk is mitigated by sizeable investment (32%) of the management company.
Going forward, the fund intends to maintain a diverse asset mix; government securities, high credit quality TFCs, CPs and cash. The main risk factors affecting the stability of returns are sensitivity of government securities to changes in interest rates. Material changes in the fund's asset allocation strategy, which could negatively impact the fund's credit quality and exposure to interest rate risk, remain critical for the rating.
About
the Entity
BMA Funds, incorporated in April 2005 as a public limited company, is licensed to carry out asset management and investment advisory services under the Non-Banking Finance Companies Regulations. The company is a fully owned subsidiary of BMA Capital Management (BMA Capital). BMA Capital is owned by its founding members; Mr Muddassar M. Malik & Moazzam M. Malik and provides financial services. The company is currently managing two open-end funds with assets under management of ~PKR 218mln at end-May17
Currently, BMA Funds has a five member board including CEO, Mr. Khaldoon Bin Latif. He holds Bachelor degree holder in Economics. He has over a decade experience in the capital markets in Pakistan and Bahrain. Previously, he was working as CIO in JS Investments Limited. The other board member comprises two independent directors and a founding member of the sponsoring family. Mr Muhammad Iqbal acts as the chairman of the board. He possess over four decade of expertise in financial sector.