Pakistan Credit Rating Agency upgrades stability rating of BMA Chundrigar Road Savings Fund

Lahore, January 09, 2013 (PPI-OT): The Pakistan Credit Rating Agency (PACRA) has upgraded the stability rating of BMA Chundrigar Road Savings Fund (BMA-CRSF), an open-end aggressive income fund to ‘A+ (f)’ (Single A Plus ; fund rating) [Previous rating: ‘A-(f)’]. The fund’s rating denotes a strong capacity to manage relative stability in returns and low exposure to risks.

The fund primarily invests in investment grade money market instruments and debt securities with the objective of providing high regular income to its unit holders.

The rating reflects the fund’s good credit quality and robust liquidity profile with higher allocation to government securities and relatively lower investments in corporate debt instruments. At end Sep-12, the fund is mainly invested in government securities (T-bills:54%, PIBs:7%), while the remaining assets comprise TDRs (19%), Sukuks (3%) and daily cash balances with good quality banks.

The fund’s exposure towards unrated instruments account for about 3% of the net assets at end Sep-12. The fund has made provisions against some non-performing assets, which has benefited the quality of net assets. The unit holding pattern of the fund is highly concentrated with the top10 investors representing 88% of the net assets. However, this risk is mitigated by sizeable investment of the management company.

Going forward, the management of the fund intends to increase the fund’s allocation towards government securities (T-bills:64%, PIBs:10%). The remaining assets will be invested in a mix of TDRs (10%), TFCs (2%) and cash balances with high quality banks. The main risk factors affecting the stability of returns emanate from sensitivity of government securities to changes in interest rates and provisioning against non-performing assets of the fund.

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

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