Lahore, September 22, 2021 (PPI-OT): The stability rating of NBP Islamic Savings Fund (or the “Fund”) reflects low risk profile of the Fund. The Fund has mandate to invest primarily in Shariah compliant money market instruments and bank deposits and is bound to invest in money market avenues rated ‘AA-‘ and above. The placement of funds in Riba free deposits with Islamic banks/Islamic window of conventional banks, other than TDR, will be in higher of the ‘A’ spectrum. The credit risk is expected to remain on the lower side.

At the same time, the Fund policy dictates higher allocation to liquid avenues. This enhances the liquidity profile of the Fund. At end Jun’21, the Fund had invested ~63% of funds with banks and DFI’s mostly rated ‘AA-‘ and above. The Fund also had an exposure of ~16% in Islamic commercial papers rated ‘AA’ and above. The fund has allocated 16% of its assets in Certificates of Musharaka. The unit holding pattern of the fund is moderately diversified, top ten investors represent ~29% of the funds assets.

Going forward, the fund intends to maintain its current asset allocation and the deposit with banks will be made in low credit risk avenues (mostly in AA category and occasionally higher spectrum of A). Material changes in the fund’s asset allocation strategy, which could negatively impact the fund’s credit quality and exposure to interest rate risk, remain critical for 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