The Pakistan Credit Rating Agency Limited
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Madiha Sohail

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PACRA Maintains Stability Rating of NBP Islamic Mahana Amdani Fund

Rating Type Stability Rating
(18-Oct-21 )
(16-Apr-21 )
Action Maintain Maintain
Long Term A(f) A(f)
Short Term - -
Outlook Stable Stable
Rating Watch - -

NBP Islamic Mahana Amdani Fund (or the "Fund") is a medium risk profile fund. The Investment policy of the Fund emphasizes that a minimum of 25% of the total Fund's assets must be invested in Riba Free Term Deposits. In line with this requirement, the Fund invests 28.72% in Riba Free term Deposits with Islamic Banks, mostly rated "A+" and above and GOP Ijarah Sukuks. Furthermore, 42.7% of the Fund's total assets are constituted by Bank Deposits in banks mostly rated "AA+" and above. Moreover, the Fund invests 6.8% of its assets in Government Securities. The average duration of the Fund was 49 days, which plays a role in minimizing the total exposure to interest rate risk. The Fund has a diversified unit holding pattern, where top 10 investors contribute towards 21.69% of the total Fund's Assets. Therefore, there appears a low amount of 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 168,016mln at end-Jun'21, the Company is currently managing a diversified fund slate of twenty eight open-end mutual funds, two voluntary pension schemes and an 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.