PACRA Maintains Stability Rating of NBP Islamic Fixed Term Munafa Plan-III (Under NBP Islamic Mustahkam Fund)

NBP Islamic Fixed Term Munafa Plan-III (NIFTMP-III or the Plan) is a very low risk profile Plan. NIFTMP-III's objective is to protect the original investment while yielding a positive return at maturity. The rating reflects the Plan's strong credit and interest rate risk profile. The Plan's credit quality is strong and in line with the rating criteria. At the end of Sept'24, 99.9% of the Plan's assets were allocated to GoP Ijarah Sukuk. The WAM of the Plan stood at 235 days as of Sept'24, exposing it to moderate credit risk, which remains manageable due to a majority of investments in Government Securities (AAA). The Plan's duration stood at 171 days. Given downward interest rate trajectory, it is favorable for the investors. The Plan’s investments are effectively managed to balance the expense ratio and fixed returns promised to investors. The unit holding pattern is highly concentrated, with the top 10 investors representing ~72.46% of net assets, exposing the Plan to high 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 2006, 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. Individuals hold 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 397.1 bln at end-Sept'24, the Company is currently managing a diversified fund slate of twenty six open-end mutual funds, four voluntary pension schemes and several Investment Advisory mandates (SMAs).