The Pakistan Credit Rating Agency Limited
30-Sep-21
Analyst
Muhammad Zain Ayaz
zain.ayaz@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 (30-Sep-21 ) |
Previous (30-Mar-21 ) |
|
| Action | Maintain | Maintain |
| Long Term | A(f) | A(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
The rating reflects the BMA Chundrigar Road Saving Fund's (or the "Fund") average credit quality and liquidity profile. During 2HFY21, the Fund has performed below its benchmark but better than industry average. AUMs of the Fund remained stagnant at PKR 114mln since Dec'20. At end Jun'21, the Fund was primarily invested in bank (~89%) having rating 'A' and above, while ~7% was invested in TFC's. The investment policy restricts the fund to invest its assets below 'BBB' rated avenues. Duration of investments stood at 44 days, at Jun'21. The unit holding pattern of the fund is highly concentrated with the top 10 investors representing ~93% of the net assets. However, this risk is mitigated by related party holdings (~74%).
Going forward, the fund intends to maintain its exposure towards cash with 'A' rated banks. The main risk factors affecting the stability of returns are sensitivity to changes in interest rates. Material changes in the fund's asset allocation strategy, which could further impact the fund's credit quality and exposure to interest rate risk, remain critical for the rating.
About
the Entity
BMA Asset Management Company was incorporated in April 2005 and acquired the license for investment advisory and asset management in April 2005 and July 2005, respectively. Mr. Mian Qasim Saeed Ahmed joined as a CEO in August 2020. He has eleven years of experience of this industry. The management team comprises seasoned professionals. The company has two funds under management, BMA Empress Cash Fund in the money market category and BMA Chundrigar Road Saving Fund in the aggressive fixed income category.
The Company's three member board comprise two independent and one non-independent directors. Mr. Salim Khan was appointed as the chairman of the board in October 2017. He possesses vast experience in strategic human resource consultancy and organizational development. The Company has a limited fund slate, as they are currently managing two funds with AUMs ~PKR 435mln at end Jun’21.