Pakistan Credit Rating Agency maintains stability rating of Riba free savings Fund

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

The objective of the Fund is to provide preservation of capital and earn a reasonable rate of return along with a higher degree of liquidity by investing in short-term products of Shariah compliant banks, money market instruments and Government securities.

The rating reflects strong credit quality of the fund’s assets and sound liquidity profile. At the same time, the rating incorporates fund’s low exposure to interest rate volatility. Currently, a significant portion of Fund’s assets comprises GoP Ijara Sukuks (~44% at end-Mar12); the remaining portfolio is dominated by cash balances with Islamic banks rated ‘A’ and above and short-term corporate Sukuks (commercial paper) having ‘AA’ and above rating. The unit holding pattern is fairly concentrated with top10 representing half of the fund’s net assets.

The rating is dependent upon maintaining 50% of the portfolio in GoP Ijara Sukuks, with portfolio duration of less than 90 days thereby limiting interest-rate risk. The remaining assets will be in the form of placements and cash balances with high rated DFI/banks.

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