PACRA Maintains Stability Rating of NBP Government Securities Plan-I

Lahore, February 12, 2021 (PPI-OT): The rating reflects the strength of the plan’s credit and liquidity risk profile. The plan’s good credit quality and sound liquidity profile emanates primarily from its mandate to invest at least 90% of its AUMs in Government Securities. At end-DeC’20, ~80% of plan’s assets were invested in PIBs, ~5% of exposure was maintained in T-Bills and ~11% of funds were deposited in bank rated ‘AA-‘. In CY20, average duration of the plan remained high, exposing it to interest rate risk.

However, the PIBs are to be held until maturity, eliminating the impact of interest rate volatility on the plan’s NAV. Due to the declining policy rates in 1HCY20, the plan generated a return of ~13.2% in CY20 and outperformed the benchmark and peer average. The plan’s unit holding pattern is highly concentrated with top 10 investors representing ~96% of the net assets. The plan is set to mature on July 12, 2021.

Going forward, the plan intends to maintain its asset allocation in government securities, while keeping the remaining fund’s as bank placements. Material changes in the plan’s asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk, would affect the rating.

For more information, contact:
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

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