Lahore, September 29, 2021 (PPI-OT):NBP Government Securities Liquid Fund (or the ‘Fund’) is a low risk-profile fund. The assigned rating reflects moderate strength of the fund’s credit and interest rate risk profile. The investment policy holds that the Fund must invest only in securities issued by the government. Moreover, deposits are only kept in Banks with a minimum rating of ‘AA’. At the end of Jun’21, T bills with 3 month maturity consisted of 99.64% of the net assets. Considerable holding of Government Securities mitigates the credit risk. The WAM has been parameterized by 90 days and as of Jun’21, the fund’s WAM was well within the limit at 57 days. Further, the duration of the Fund remained at an average of 57 days and as such does well to minimize exposure to interest rate risk.

Therefore, the liquidity risk of the fund appears to be mitigated successfully. The top 10 investors possess a concentration of 68.54% in the fund’s total assets. Therefore, the fund is subject to high redemption pressure. Going forward, the Fund may increase its asset allocation in Government Securities. 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