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 Government Securities Liquid Fund
| Rating Type | Stability Rating | |
|
Current (27-Sep-24 ) |
Previous (28-Mar-24 ) |
|
| Action | Maintain | Maintain |
| Long Term | AAA(f) | AAA(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
NBP Government Securities Liquid Fund (or the "Fund") is a very low-risk profile Fund. The investment objective of the Fund is to generate optimal return with minimum risk, to provide easy liquidity and reasonable income to its unit holders by investing primarily in short-term Government Securities. 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 ~97.6% in AAA/ Gov Sec rated avenue. ~1.70% in AA+, and ~0.70% in others. At the end of Jun'24, the Fund had allocated ~69.2% in T-bills, ~23.4% in the form of cash, ~6.7% in PIB’s, whereas, remaining was invested in others. The duration & WAM of the Fund stood at 73 days at the end of Jun’24, limiting the interest risk & credit risk of the Fund. At the end of Jun'24, the top ten investor concentration stood at ~75.15%, exposing the Fund to very high redemption pressure. Redemption pressure is address through majority investment in short term government securities.
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.