May 2019 pdf-icon


The BMA Empress Cash Fund is a professionally managed cash fund, which aims to minimize risk, maximize liquidity and generate a competitive rate of return. This will be achieved by concentrating portfolio allocation in AA rated banks and short duration sovereign rated securities.




Fund TypeOpen End


In April-19, BECF earned an annualized return of 9.94% as against benchmark of 10.11%, underperformed by 17bps. This performance is net of management fee and all other expenses. Under the current rising interest rates scenario, the Fund’s protfolio comprises of short maturity T-bills and high yield bank deposits while keeping the average portfolio maturity under 90 days, to avoid value erosion.



In April 2019, the uncertainty and volatility remained intact where country’s finance minister departed the economic ship in a surprised way further dented the already shattered investors’ confidence on the overall economic condition of country. Dr. A. Hafiz Shiekh is the new captain and is likely to accelerate and conclude the initiatives, programs entries and required agreements’ finalization to address financial needs of the hour. The IMF program is still yet to be finalized as IMF technical team is in country and is expected to dictate its conditions including key revenue measures for upcoming federal budget.
On a macro front, CPI clocked in at 8.82%, as compared to 9.41% in Mar’19. This translates 7% CPI (against 3.77% SPLY) for 10MFY19, witnessed an uptick of 0.21% from 6.79% last month and rightly in the range of 6.5-7.5% forecasted by SBP for FY19. On MoM basis, food inflation rose to 1.8%, house rent increased by 1.3%, education fee up by 1.8% and fuel prices registered an increment of 4.2%. Core inflation, (measuring non-food, non-energy inflation), witnessed an elevated slowdown relatively, falling 7% (YoY) in the reporting month versus 8.5% in last month and remained flat in SPLY.
Trade deficit improved by 5% MoM & 13% YoY up till 9MFY19 and stood at USD -2.176 billion versus USD -2.291 billion and USD -23.672 billion against USD -27,216 billion. FX reserves depleted by 9.6% and now stands at USD 15.742 billion versus USD 17.417 last month.
SBP sold T-Bills of PkR 1.094 trillion in 3 months (via two auctions at cut- off 11% & 10.9799%, respectively) and as expected, major participation came in 3 months T-Bills paper in the anticipation of policy rate hike. The central bank also sold PIBs in an auction of PkR 227.989 billion in 3 years’ tenure at the cut-off of 12.20%.
Going forward, all eyes are on how the new financial captain and its team addresses major issues including further PkR devaluation under IMF program, elimination of energy subsidies and upcoming expected IMF influenced budget for FY20. Considering aforesaid, we are of the view that SBP may increase 25-50bps in the next Monetary Policy, due in end of May.

Disclaimer: This publication is for informational purposes only and nothing herein should be construed as a solicitation, recommendation or an offer to buy or sell any Fund. All investments in mutual funds are subject to market risks. The NAV based prices of units and any dividends/returns thereon are dependant on forces and factors affecting the capital markets. These may go up or down based on market conditions. Past performance is not necessarily indicative of future results.

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