PACRA Upgrades Rating of NBP Islamic Income Fund
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NBP Islamic Income Fund (or the "Fund") is a medium-profile fund. The Fund seek to provide competitive returns by investing in Shariah compliant debt securities and money market instruments. During CY21, the Fund invested on average ~50% of net assets in Banks. The average allocation towards 'AA-' and above rated securities was ~52% during CY21. At the end-Dec’21, the Fund had allocated 45% of assets to banks , with 32% assigned to a ‘AAA’ rated bank and 12% invested in an 'A' rated bank. The Fund had also invested ~22% of its AUMs in ICPs rated 'AA'. Furthermore, the Fund had invested ~18% of net assets in Sukuks rated AA and above. The average WAM stood at 180 days in CY21. The WAM of the Fund was 193 days due to investment in high-tenor Sukuks, the high WAM exposes the Fund to moderate credit risk. The duration of the Fund stood at 42 days, shielding the Fund from interest rate risk. The average duration during CY21 was within the same range and stood at 41 days. The investor base of the Fund is moderately diversified with the top 10 investor concentration standing at 29% at end-Dec'21.
Going forward, the Fund intends to maintain its allocation in high rated banks. 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 seven open-end mutual funds, two voluntary pension schemes and an Exchange Traded Fund.