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PACRA Maintains Stability Rating of NBP Government Securities Liquid Fund

Lahore, September 29, 2022 (PPI-OT):NBP Government Securities Liquid Fund (or the ‘Fund’) is a very low risk-profile fund. The assigned rating reflects moderate strength of the fund’s credit and interest rate risk profile. The Fund had invested 98% in Bank Alfalah Limited rated AA+ which shows high concentration risk. To mitigate the concentration risk, the management has plans to diversify its banking exposure by investing ~30% in three different triple AAA rated banks.

The duration and WAM of the Fund stood at 1 day at the end Jun’22 (Dec’21: 12 days), limiting the exposure to interest rate and credit risk. The Fund’s top 10 investor concentration stood at 63% of net assets at end-Jun’22 out which ~23% of net assets are of relative party, which may subject the Fund to low redemption pressure. Going forward, material changes in the Fund’s asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk, would affect the rating.

For more information, contact:
Analyst,
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore, Pakistan
Tel: +92-42-5869504-6
Fax: +92-42-5830425
Email: hammad.rashid@pacra.com
Website: www.pacra.com

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