The Pakistan Credit Rating Agency Limited
19-Oct-22
Analyst
Madiha Sohail
madiha.sohail@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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PACRA Maintains Stability Rating of NBP Islamic Mahana Amdani Fund
| Rating Type | Stability Rating | |
|
Current (19-Oct-22 ) |
Previous (19-Apr-22 ) |
|
| Action | Maintain | Upgrade |
| 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 assigned rating reflects moderate strength of the Fund's credit and interest rate risk. The Fund had invested in ~44% of its net assets in banks, mainly in ‘AAA’ rated banks, 23.5% in sukuks, ~9.9% in certificate of musharaka whereas ~7.7% in GoP/Ijarah. The duration of the Fund was 54 days in the end Jun’22 (Dec’21: 61 days), exposing the Fund to interest rate risk. The WAM of the Fund was slightly decreased to 584 days in the end Jun’22 (Dec’21: 607 days), exposing the Fund to high level of credit risk. The Funds exposure to Government-issued Sukuks, mainly 10 year and 5 year GOP Ijara Sukuk, has resulted in higher WAM. However, the related credit risk is low as higher maturity securities are backed by GOP. The unit holding pattern of the Fund was ~15% representing top ten investor concentration.
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 177,186mln at end-Jun'22, the Company is currently managing a diversified fund slate of twenty five open-end mutual funds, two voluntary pension schemes and one Exchange Traded Fund.