Global Arab Network | Fitch Rates Morocco-Based BMCI Tresorerie at 'AAAmmf (mar)'

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Fitch Rates Morocco-Based BMCI Tresorerie at 'AAAmmf (mar)'

Global Arab Network - - Mohammed Almasri

Thursday, 10 June 2010 16:30

Fitch Ratings has today assigned a 'AAAmmf (mar)' national money market fund rating to BMCI Tresorerie, a fund domiciled in Morocco and managed by BMCI Gestion, a subsidiary of BMCI Banque ('AAA(mar)'/Stable/ 'F1+(mar)').

The 'AAAmmf(mar)' rating is the highest that can be assigned by Fitch in its National Money Market Fund ratings scale for Morocco and indicates an extremely strong capacity to preserve principal and provide shareholder liquidity through limiting credit, market and liquidity risk, relative to all other short-term investments in Morocco.

BMCI Tresorerie invests exclusively in Moroccan securities issued by the State or high quality and publicly-rated banks (notably BMCI Banque), and through repos backed by government bonds. The portfolio currently holds a limited exposure to unrated banks, due to mature shortly.
Those assets are deemed of good credit quality by Fitch. Exposure to a single issuer or counterparty is limited by regulation to 10%, or 20% for repo counterparties.
The interest rate risk is contained given a portfolio modified duration (sensitivity to interest rate moves) kept below 0.3 - which corresponds to approximately 120 days of average maturity - and through a limited exposure to assets maturing in more than one year.
This diverges from the base case at 'AAAmmf(xxx)' level detailed in Fitch's 'National Scale Money Market Fund Rating Criteria', which stipulates a maximum average maturity of 60-90 days and no investments in fixed-rate instruments above a year.
In the case of BMCI Tresorerie, Fitch gains comfort from the overall interest rate environment in Morocco, characterised by a moderate level of inflation and stable policy rates. The liquidity profile of the fund is very conservative, with a large part of the portfolio, typically a third, in overnight repos.

Controls and procedures at BMCI Gestion and the custodian bank, BMCI Banque, are adequate and the agency notes the strategic importance of the fund which represents a third of the fund manager assets and is distributed through bank retail networks and among BMCI Banque's institutional clients.

At end May-2010, the fund had MAD5bn of assets and the portfolio was 46% invested in government bills and bonds and 44% via overnight repos.

The agency will monitor the portfolio composition and its compliance with rating criteria on the basis of reports and holdings sent on a weekly basis by the custodian. Investors and market participants will soon find updated fund-level summaries and analytics for BMCI Tresorerie on Funds SMART, Fitch's MMF analytical tool which is available free of charge on Fitch's website www.fitchratings.com, although a username and password are required. Funds SMART can be accessed through the 'Surveillance' menu (Surveillance > Funds) or through the Fund ratings pages via the 'Sectors' menu (Sectors > Financial Institutions > Fund & Asset Manager Ratings > Surveillance tab).

Applicable criteria, 'Global Money Market Fund Rating Criteria', dated 5 October 2009 and 'National Scale Money Market Fund Rating Criteria' dated 15 March 2010, are available at www.fitchratings.com.

BMCI Gestion is the asset management subsidiary of BMCI Banque, the fourth-largest Moroccan bank in terms of deposits, which is majority owned by BNP Paribas ('AA'/Negative/ 'F1+'). It manages MAD12bn for retail investors, corporates and institutions. At end May-2010, the company had 17 staff, including four portfolio managers.

Global Arab Network

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