The Pakistan Credit Rating Agency Limited
09-Apr-24
Analyst
Hassaan Ahmad
Hassaan.Ahmad@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 (09-Apr-24 ) |
Previous (13-Oct-23 ) |
|
| 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 objective of the Fund is to provide competitive return with maximum possible capital preservation by investing in low risk and liquid Shariah Compliant authorized instruments. At the end of Dec'23 the Fund had invested ~63.8% in bank deposits, placements & other banking instruments in AA category, ~13.6% in Gop Ijara Sukuk, ~12.6% in Short-term Sukuks in AA category and ~5.6% in money market placements, whereas remaining in others. The duration and WAM of the Fund stood at 63 days at the end Dec’23, limiting the fund to low interest rate risk and credit risk. The unit holding pattern of the Fund stood at ~31.76% at the end Dec’23, representing top ten investor concentration; exposing the Fund to moderate level of redemption pressure.
Going forward, any material changes in the investment policy and/or compliance with the rating criteria for the assigned rating would have an impact on the ratings.
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 ~268bln at end-Dec'23, 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.