PACRA maintains Stability Rating to NBP Islamic Government Securities Plan – III

NBP Islamic Government Securities Fund is a low-risk profile open-ended Fund. The objective of the Fund is to offer different allocation plans and to provide investors in each allocation plan with attractive returns, by investing primarily in Shariah-Compliant Government Securities. Allocation plan(s) launched by the NBP Fund Management Limited under this Fund may be perpetual or may have fixed maturity. NBP Islamic Government Securities Plan I, II, III, IV and V come under the umbrella of this Fund. The plans will invest in authorized avenues to meet investment objectives.
Initially, NBP Islamic Government Securities Plan – III was launched on 19 Jan'24. The plan, in line with its investment objectives, shall invest in the authorized investment avenues i.e. Islamic Government Securities, cash deposits in Islamic banks, or Islamic window of conventional banks excluding term deposit certificates.
The initial size of the plan was PKR 611mln at the end of Jun-24. The Plan had invested ~93.60% in AAA-rated GoP Ijara Sukuk, and 3.5% in AA& AA- rated bank. The WAM of the Plan stood at 487 days at the end of Jun’24, exposing the Fund to high credit rate risk. However, since the investment is in GoP Ijara Sukuk, the credit risk is at a manageable level. The duration of the Plan stood at 131 days at the end of Jun’24, exposing the Fund to interest rate risk. The unit holding pattern of the top ten investor concentration of the plan was ~52.60%, exposing the Plan to high redemption pressure risk. However, the ability to meet redemption remained sound on the back of a strong liquid profile.
Going forward, any material changes in the investment policy or the devised 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.
The Company’s nine-member Board of Directors includes three independent directors and the CEO. With overall assets under management of PKR ~346bln at end-Jun'24, the Company is currently managing a diversified fund slate of twenty-six open-end mutual funds, four voluntary pension schemes and one Exchange Traded Fund.