Pakistan Credit Rating Agency assigns stability rating to BMA Chundrigar Road Savings Fund

Lahore, October 05, 2012 (PPI-OT): The Pakistan Credit Rating Agency (PACRA) has assigned a stability rating of “A-(f)” (Single A Minus ; fund rating) to BMA Chundrigar Road Savings Fund (BMA-CRSF), an open-end aggressive income fund. 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 good credit quality of fund’s assets, mainly consisting of Government securities (primarily T-bills), TFCs and cash balances with scheduled banks.

The rating incorporates sound liquidity profile due to high allocation towards short-term government securities (~80% at end-Aug12). The remaining assets comprise cash balances with banks and DFIs having ‘AA’ and above credit rating.

The fund made provisioning against some sizeable non-performing assets, which primarily has benefited the quality of net assets, further supplemented by AUM growth. The unit holding pattern is highly concentrated, with top five investors holding more than 80% of fund’s units. However, comfort can be drawn from significant holding of the management company in the fund.

Although the fund by policy can allocate assets in below investment grade and unrated avenues, it plans to maintain majority of its exposure in GoP securities, while moderately increasing its holding of debt instruments. Any change in the fund’s asset mix diluting credit quality and/or liquidity while increasing exposure towards low quality corporate debt instruments, would have negative implication for the fund’s rating.

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