Pakistan Credit Rating Agency Maintains Stability Rating of Savings Plus Fund

Lahore, June 28, 2012 (PPI-OT): The Pakistan Credit Rating Agency (PACRA) has maintained the stability rating at ‘AA-(f)’ (Double A Minus – Fund Rating) of NAFA Savings Plus Fund (NSPF), an open-end income fund. The fund’s rating denotes a very strong capacity to manage relative stability in returns and very low exposure to risks.

The fund aims to minimize risk, maintain a high degree of liquidity and provide unit holders a reasonable return from a portfolio primarily consisting of short-term banks deposits (rated ‘A’ and above,) and money market instruments (rated ‘AA-’ and above,). As per NSPF’s investment policy, it will not invest in TFCs and/or spread transactions. The rating reflects fund’s ability to maintain a very good credit quality, sound liquidity profile and very low exposure against interest rate risk.

The fund’s very low risk emanates from its investment policy of maintaining a sizeable proportion of term deposits with banks rated ‘AA-’ and above, while only taking a limited exposure against banks having credit rating of ‘A’ and ‘A+’. Currently, a considerable portfolio comprises T-Bills (~38%), with a portfolio duration of 55 days at end-Mar12. Meanwhile, a sizable portion of the fund is invested in Margin Trading System [MTS] (~25%), with no direct exposure to equity market.

The remaining portfolio consists of placement with DFI (~16%), cash balances (~10%) and money market placements (~8) at end-Mar12. The funds has a diverse investor base with top 10 investors representing 35% of the total assets.

The rating is dependent upon maintaining Government securities exposure at ~30% of the net assets, with portfolio duration of less than 70 days. The remaining portfolio will be invested in a mix of MTS (35%) and placements with DFI/Banks (~30%).

For more information, contact:
Hammad Rashid
Analyst
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425
Email: hammad.rashid@pacra.com
Web: www.pacra.com

Leave a Reply