PACRA Maintains Stability Rating of NBP Government Securities Savings Fund
|Rating Type||Stability Rating|
NBP Government Securities Savings Fund(or the ‘Fund’) is low risk‐profile fund. The assigned rating reflects moderate strength of the fund's credit and interest rate risk profile. The investment policy holds that the minimum requirements of the fund entail that at least 70% must be invested in Government Securities. At the end of Dec'21, the Fund had allocated ~71% of net assets to government securities. Moreover, the cash balanced constituted ~28% of the net assets of the Fund. The Fund had placed cash in banks rated 'AA+'. Superior allocation profile of the Fund reinforces the credit profile of the Fund. At the end-Dec'21, the WAM of the Fund was reported at 222 days. Whereas, the average duration was recorded at 203 days. The Fund may be subject to interest rate risk due to high duration. The top 10 investors possess a concentration of ~57% in the fund's total assets. Therefore, the fund is subject to moderate redemption pressure.
Going forward, the Fund may increase its asset allocation towards government securities as mandated by its investment policy, depending on market situation. Material changes in the Fund's asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk, would affect the rating.
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 169,025mln at end-Dec'21, the Company is currently managing a diversified fund slate of twenty five open-end mutual funds, two voluntary pension schemes and an Exchange Traded Fund.