The Pakistan Credit Rating Agency Limited
10-Oct-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 Income Fund
| Rating Type | Stability Rating | |
|
Current (10-Oct-24 ) |
Previous (09-Apr-24 ) |
|
| Action | Maintain | Maintain |
| Long Term | A+(f) | A+(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
NBP Islamic Income Fund (or the Fund) is a moderate-risk profile Fund. The investment objective of the Fund is to provide competitive returns by investing in Shariah compliant debt securities and money market instruments. The Fund's asset quality is adequate and is in line with the rating criteria at the end of Jun'24. As of the Jun'24, Fund's investment was ~59.2% in AAA/Government Securities rated avenue, ~15% in AA- rated avenue, ~12.1% in AA+ rated avenue, with the reminder invested in other categories. At the end of Jun'24, most investment was held in GoP Ijara Sukuk (~54.4%), followed by banks in form of cash & placements (~20.9%), TFC’s/sukuks (~10.6%) and remaining was invested in others. The duration of the Fund stood at 73 days at the end Jun’24, exposing low-interest rate risk. The WAM of the Fund stood at 288 days at the end of Jun’24, exposing high credit risk. At the end of Jun'24, the top ten investor concentration stood at 17.34%, exposing the Fund to low 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.