The Pakistan Credit Rating Agency Limited
27-Sep-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 Daily Dividend Fund
| Rating Type | Stability Rating | |
|
Current (27-Sep-24 ) |
Previous (28-Mar-24 ) |
|
| Action | Maintain | Maintain |
| Long Term | AA+(f) | AA+(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
NBP Islamic Daily Dividend Fund (or the Fund) is a low-risk profile Fund. The investment objective of the Fund is to provide competitive return along with daily dividend by investing in shariah compliant money market instruments. The assigned rating reflects the Fund's strong credit and interest rate risk profile emanating from its low-risk investment strategy. The credit quality of the Fund was ~57% in AA rated avenue.~40.20% in AAA/Govt Sec, and ~2.80% in others. At the end of Jun'24, the Fund had allocated ~59.1% in Banks in the form of cash & placements, ~18.9% in Short Term Sukuks, ~15% in GoP Ijara whereas, remaining was invested in others. The WAM of the Fund stood at 41 days at the end of Jun’24, limiting the credit risk of the Fund. At the end of Jun'24, the top ten investor concentration stood at ~48.51%, exposing the Fund to moderate redemption pressure.
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.