The Pakistan Credit Rating Agency Limited
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Madiha Sohail

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PACRA Maintains Stability Rating of NIT Income Fund

Rating Type Stability Rating
(09-Sep-22 )
(11-Mar-22 )
Action Maintain Maintain
Long Term AA-(f) AA-(f)
Short Term - -
Outlook Stable Stable
Rating Watch - -

NIT Income Fund (or the 'Fund') is a medium-risk profile Fund. The assigned rating reflects the moderate strength of the Fund's credit and interest rate risk profile. The Fund had allocated ~46% of its net assets to Banks, mainly AAA rated banks, ~31% in TFCs rated AA- or higher whereas ~8% in PIBs. The duration of the Fund stood at ~39 days at the end-Jun'22 (Dec'21: 50days) hence, exposure to interest rate risk remained on lower side. Whereas, the WAM of the Fund was 327days at the end-Jun'22 (Dec'21: 381days) exposing the moderate level of credit risk. The unit holding pattern of the Fund is highly concentrated with the top ten investors representing ~84% of the Fund's assets, out of which ~56% was related party holding hence, reducing the redemption pressure.
Going forward, material changes in the Fund's asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk, would affect the rating.

About the Entity
National Investment Trust Limited was established in 1962 and is a pioneer in the mutual fund industry. The Company’s Board of Directors currently comprises eleven board members out of which ten are non-executive. Mr. Adnan Afridi, CEO/MD who joined in Feb'19 holds profound experience in the financial services and capital markets. Mr. Manzoor Ahmed is the COO and has a successful track record of managing the operations and investment portfolio of the Company. The Company is currently one of the largest asset management companies in Pakistan with a portfolio of fourteen open-end funds which includes two non-public funds namely NIT-SEF and NIT-EMOF, two voluntary pension schemes, and an exchange-traded fund. The assets under management of the Company stood at ~PKR 96.34bln (including SEF & EMOF) end-Jun'22.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.