Pakistan Credit Rating Agency Maintains Stability Rating of Government Securities Liquid Fund

Lahore, June 28, 2012 (PPI-OT): The Pakistan Credit Rating Agency (PACRA) has maintained the stability rating of NAFA Government Securities Liquid Fund (NGSLF), at “AAA (f)” (Triple A ; fund rating) an open-end money market fund, The fund’s rating denotes an exceptionally strong capacity to maintain relative stability in returns and possesses negligible exposure to risks.

The objective of the fund is to generate optimal return with exceptionally low risk, and to provide a highly liquid avenue to its unit holders by investing primarily in short-term government securities. Strong credit quality of the fund’s assets and a strong liquidity profile emanates essentially from maintaining a minimum exposure of 85% in securities (primarily T-Bills) issued by the Government.

Remaining assets are to be kept only in the form of term deposits with banks / DFIs rated ‘AA’ and above. At the same time, the rating incorporates fund’s very low exposure to interest rate volatility by maintaining the duration of the T-Bills portfolio below 45 days.

The fund’s portfolio at end-Mar-12 comprises 87% T-bills with a weighted average maturity of 40 days. The remaining assets are deposits with DFIs and scheduled banks having ‘AA’ and above rating. However, the unit holding pattern remains concentrated with top10 investors representing 61% of the fund’s net assets.

The fund’s rating is dependent upon maintaining a minimum exposure of 75% in government securities alongwith a portfolio duration of less than 45 days. The remaining assets will be placed with banks and DFIs having very strong credit quality.

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