PACRA Maintains Stability Rating of NAFA Money Market Fund
|Rating Type||Stability Rating|
The fund's objective is to provide a stable income stream with the preservation of capital by investing in AA and above rated banks and money market instruments.
The rating reflects the fund's low-risk profile emanating from the fund's investment policy to invest in avenues rated 'AA' and above. At the end of Dec-18, the asset allocation of the fund consisted of Bank Deposits ~97%. The portfolio duration of the fund represents very low exposure towards interest rate volatility. The fund's unit holding pattern is concentrated with the top 10 investors comprising 57% of the fund's net assets, which shows moderate redemption pressure over the fund.
Going forward, the rating remains dependent on maintaining exposure with high credit quality financial institutions with portfolio duration not exceeding 90 days. Meanwhile, the remaining assets of the fund must be placed with scheduled banks having credit ratings of 'AA' and above.
NBP Fund Management Limited, 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%. During the year, Baltoro Growth Fund acquired the entire (36%) stake of Alexandra Fund Management Pte. Ltd. in the company. Baltoro Capital is a Pakistan focused private equity firm. Baltoro has made three investments in the pharmaceutical, renewable energy and financial services sectors. It is actively deploying its funds in businesses positioned to achieve extraordinary growth. The CEO of NBP Fund Management Limited, Dr. Amjad Waheed, also holds a 10% stake in the company.
The company’s nine-member Board of Directors include three independent directors and the CEO. During the year, there has been some new induction in the Board of Directors. The company is currently managing a diversified fund slate of twenty-six mutual funds and two pension funds.