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The Pakistan Credit Rating Agency Limited
Press Release

Date
19-Nov-19

Analyst
Afnan Iqbal
afnan.iqbal_old@pacra.com_old
+92-42-35869504
www.pacra.com

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This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA

PACRA Assigns Initial Stability Rating to NBP Islamic Daily Dividend Fund

Rating Type Stability Rating
Current
(19-Nov-19 )
Action Initial
Long Term AA(f)
Short Term -
Outlook Stable
Rating Watch -

The rating reflects the fund's projected strong credit risk profile emanating from its investment strategy to invest in high credit quality investment avenues with sound liquidity. The projected asset allocation of the fund includes 80% placement with 'AA' and above rated banks and 20% exposure will be taken in CP/Sukus. The fund is projected to maintain its duration below 45 days, resulting in very low exposure to interest rate volatility.
Going forward, the fund intends to maintain its current exposure with banks, however allocation towards 'AA+' and 'AAA' rated banks will be improved. Material changes in the fund's asset allocation strategy, impacting it's credit quality and/or exposure to interest rate risk, would affect the rating.

About the Entity
NBP Fund Management Limited, 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%. During the year, Baltoro Growth Fund acquired the entire (36%) stake of Alexandra Fund Management Pte. Ltd. in the company. Baltoro Capital is a Pakistan focused private equity firm. Baltoro has made three investments in the pharmaceutical, renewable energy and financial services sectors. It is actively deploying its funds in businesses positioned to achieve extraordinary growth. The CEO of NBP Fund Management Limited, Dr. Amjad Waheed, also holds a 10% stake in the company.

The company’s nine-member Board of Directors include three independent directors and the CEO. The company is currently managing a diversified fund slate of 12 conventional funds, 15 shariah comliant funds along with 2 voluntary pension schemes, holding AUMs of ~PKR 99.3 bln at end-Sep'19.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.