The Pakistan Credit Rating Agency Limited
18-Oct-21
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 Money Market Fund
| Rating Type | Stability Rating | |
|
Current (18-Oct-21 ) |
Previous (16-Apr-21 ) |
|
| Action | Maintain | Maintain |
| Long Term | AA(f) | AA(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
NBP Islamic Money Market Fund (or the "Fund") is a low risk profile fund. The Investment Policy enforces a minimum requirement of 10% on the total investment in Cash and Cash equivalents. At end June'21, the Fund had invested 77.1% of the total Fund's assets in Banks mostly rated "AA+" and above. Furthermore, short term sukuks constituted towards 9.3% of the total Fund's assets in corporates ranked 'AA+'. Moreover, the Fund does well to keep its average duration at 16 days (At end Jun'21) and therefore, minimizes its exposure to interest rate risk. The unit holding pattern is adequateconcentrated, with top 10 investors contributing towards 43.68% of the total Fund's assets and therefore subjects the Fund to a moderate level of redemption pressure. However, the highly liquid nature of the Fund provides a reasonable cushion against this risk.
Going forward, in accordance with the investment policy the fund intends to maintain its current asset allocation. Material changes in the fund's asset allocation 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 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.