The Pakistan Credit Rating Agency Limited
01-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 Money Market Fund
| Rating Type | Stability Rating | |
|
Current (01-Sep-23 ) |
Previous (09-Mar-23 ) |
|
| Action | Maintain | Maintain |
| Long Term | AAA(f) | AAA(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | Yes | - |
NIT Money Market Fund (or the “Fund”) is low risk profile fund. The objective of the Fund is to generate competitive returns with minimum risk for its unit holders by investing in low risk, liquid, short tenor fixed income securities/money market instruments. The AUMs of the Fund stood at PKR 27,746mln at the end Jun’23 (Dec’22: PKR 21,734mln). The allocation of the Fund was ~74.6% in T-Bills, around ~11.3% in short term sukuks rated AA and above, ~10.8% in COI/LOP rated AA+ and above. However a small portion around ~2.6% of cash placed in Bank rated AAA while ~0.7% in others avenues at the end Jun’23. The duration and the WAM of the Fund stood at 53 days, exposing low interest rate and credit risk at the end Jun’23. The unit holding pattern of the Fund stood at ~58.5% representing top ten investor concentration. As per the assigned rating criteria, the Fund need to remain compliant to the specified criteria by investing minimum 75% in Govt/AAA rated avenues whereas maximum 25% in double AA+ and cannot invest below AA+. Considering the significant reduction of funds size, satisfactory fund performance and non-compliance from the respective criteria for the assigned rating, PACRA is keeping the Fund under surveillance and placing rating watch on the Fund.
Going forward, the Fund intend to comply with the assigned criteria. Compliance with the investment policy and rating criteria for the assigned rating would remain imperative.
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