Analyst
Shahzaib Khalid
shahzaib.khalid@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
PACRA Maintain Stability Rating of NAFA Active Allocation Riba Free Savings Fund
Rating Type | Stability Rating | |
Current (30-Jun-18 ) |
Previous (12-Jul-17 ) |
|
Action | Maintain | Maintain |
Long Term | A-(f) | A-(f) |
Short Term | - | - |
Outlook | Stable | Stable |
Rating Watch | - | - |
The objective of the fund is to earn a reasonable rate of return along with a high degree of liquidity by investing in short-term Shariah compliant products. This fund is exclusively built for investment of fixed income portions of "fund of funds" schemes of NAFA.
Currently, 'NAFA Islamic Active Allocation Plan I', 'NAFA Islamic Active Allocation Plan II', 'NAFA Islamic Active Allocation Plan III', ‘NAFA Islamic Active Allocation Plan IV’, ‘NAFA Islamic Active Allocation Plan V’, ‘NAFA Islamic Active Allocation Plan Vl’, ‘NAFA Islamic Active Allocation Plan Vll’ and ‘NAFA Islamic Active Allocation Plan VIll’ have invested their fixed income portions in this fund. The unit holding pattern of these plans combined is highly concentrated with top 10 investors contributing 100% to the plans. Fund has (53%) exposure in banking deposit with 'AAA' rated bank, 'A+' rated bank (29.3%), 'AA-' rated bank (15%) and A- rated bank (17%) at end-Dec17.
Going forward the fund intends to maintain 20 % of its exposure in GoP bonds while 10% would be kept with banks rated 'A-' & above. Remaining exposure would be in sukuks with rating 'AA-' & above. Material changes in the fund's asset allocation strategy, which could negatively impact the fund's credit quality and exposure to interest rate risk, remains critical for the rating.
About
the Entity
NBP Fund Management Limited (Formerly: NBP Fullerton Asset Management Limited), established in 2005, is licensed by Securities and Exchange Commission (SECP) to carry out asset management and investment advisory business. NBP is the largest shareholder of the AMC with a stake of ~54%, followed by Alexandra Fund Management Pte. Ltd ~36% stake. The CEO of NBP Fund, Dr. Amjad Waheed, also holds a stake of 10% in the company.
Company nine-member Board of Directors comprise the company’s CEO, three representatives of NBP, two representatives of FFMG and three independent directors. During the year Mr. Mudassir Husain Khan and Mr. Tariq Jamali joined the company’s board as a Non-Executive directors, both are the representatives of the bank. The company is currently managing a diversified fund slate of twenty funds in the categories of asset allocation, income, equity and money market.