The Pakistan Credit Rating Agency Limited
31-Dec-18
Analyst
Shahzaib Khalid
shahzaib.khalid@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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PACRA Maintains Stability Rating of NIT Income Fund
| Rating Type | Stability Rating | |
|
Current (31-Dec-18 ) |
Previous (30-Jun-18 ) |
|
| Action | Maintain | Maintain |
| Long Term | A+(f) | A+(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
The objective of NIT Income Fund is to generate competitive stream of return with moderate level of risk for its unit holders, by investing primarily in fixed income securities/instruments.
The rating reflects the funds sound liquidity and strong credit profile emanating from significant allocation (~58%) in cash balances with AA+ rated banks. The portfolio of the fund at end Jun-18 is primarily invested in cash (~55%). The remaining net assets of the fund are allocated in TFCs (~20%), ~18% in T-Bills and ~6% in MTS. The unit holding pattern of the fund is highly concentrated with top ten investors representing 71% of the fund's assets, (of which ~38% are owned investments) which exposes the fund to low level of redemption pressure.
Going forward, the fund intends to increase its exposure in TFCs and T-Bills. The remaining assets of the fund will remain invested as cash balances. Material changes in the fund's asset allocation strategy, which could negatively impact the fund's credit quality and exposure to interest rate risk, remain critical for the rating.
About
the Entity
National Investment Trust Limited was established in 1962 as an unquoted public limited company. It is the first asset management company of Pakistan and is the pioneer of domestic mutual fund industry. Company’s Board of Directors currently comprise eleven board members out of which ten are non-executive. Mr. Manzoor Ahmed is the Managing Director of the company. The authority for appointment of CEO/Managing Director lies with the Government of Pakistan.
Mr. Manzoor Ahmed, Managing Director of the company, holds profound experience in the domestic mutual fund industry. He is supported by a team of qualified and experienced professionals. The company is currently one of the largest asset management companies in Pakistan with a portfolio of eight open end funds and two pension funds with overall AUMs of ~PKR 90 billion at end Nov-18.