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The Pakistan Credit Rating Agency Limited
Press Release

Date
18-Oct-21

Analyst
Madiha Sohail
madiha.sohail@pacra.com
+92-42-35869504
www.pacra.com

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This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA

PACRA Maintains Stability Rating of NBP Islamic Income Fund

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

The assigned rating reflects the Fund's moderate credit risk and interest rate risk profile emanating from its investment strategy to invest in adequate credit quality and longer duration investment avenues having sound liquidity. The Fund had placed 44.3% of assets as daily product with banks mostly rated 'AAA'. 23% of the total assets were invested as term deposits with banks rated ‘AAA’ (10%) and ‘A+’ (13%). Remaining assets of the Fund were invested with Sukuks and Commercial Paper rated AA and AA+ respectively. The Fund's investment policy (IP) allows the fund to take 100% exposure in 'A‐' rated investment avenues of up to 90 days maturity. The Fund shall place minimum 25% of assets in Riba free accounts of Islamic banks. This is expected to allow the Fund to maintain a strong liquidity profile. The average duration of the Fund remained at 36 days, at end Jun'21 which protects the Fund from exposure against interest rate risk
Going forward, Material changes in the fund's asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk, would affect 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.