The Pakistan Credit Rating Agency Limited
28-Mar-24
Analyst
Hassaan Ahmad
Hassaan.Ahmad@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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 Financial Sector Income Fund
| Rating Type | Stability Rating | |
|
Current (28-Mar-24 ) |
Previous (28-Sep-23 ) |
|
| Action | Maintain | Maintain |
| Long Term | A+(f) | A+(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
NBP Financial Sector Income Fund (or the Fund) is a moderate-risk profile fund. The investment objective of the Fund is to provide income enhancement and preservation of capital by investing in prime quality Financial Sector TFCs/Sukuks, Bank deposits and short-term money market instruments. The Fund had invested ~74.7% in bank deposits, placements & other banking instruments in A category and~8.7% in TFC/Sukuks whereas remaining ~6.1% was invested in other avenues at the end Dec’23. The duration of the Fund stood at 73 days at the end Dec’23, limiting the exposure to interest rate risk. The WAM of the Fund stood at 247 days at the end Dec’23, exposing the Fund to credit risk. As of Dec'23, the unit holding pattern of the Fund stood at ~41.23% representing the 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.