The Pakistan Credit Rating Agency Limited
08-Sep-23
Analyst
Wajeeha Asghar
wajeeha.asghar@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 (08-Sep-23 ) |
Previous (09-Mar-23 ) |
|
| 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 objective of 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 assigned rating reflects the Fund's moderate credit risk profile emanating from Fund's Investment policy to invest in avenues with sound liquidity. The AUMs of the Fund stood at PKR 2,432mln at the end Jun’23 (Dec’22: PKR 2,930mln). The allocation of the Fund as of Jun'23 was ~14.8% in A+ and higher-rated TFCs, around ~26.6% in Corporate Sukuks rated AA and above, ~25% in T-Bills, and about ~17.9% in PIBs. Additionally, the fund held ~12.7% in cash, primarily within A+ rated banks, with a minor allocation of approximately 2.8% in other avenues. The duration of the Fund was 68 days at the end Jun’23, exposing interest rate risk. The WAM of the Fund stood at 595 days at the end Jun’23, exposing high credit risk due to investment in Govt securities. The unit holding pattern of the Fund stood at ~82.5%, representing top ten investor concentration.
Going forward, any material changes in the investment policy would remain imperative. While compliance with the devised rating criteria for the assigned rating would remain critical.
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 92.97bln (including SEF & EMOF) end-Jun'23