The Pakistan Credit Rating Agency Limited
06-Sep-24
Analyst
Hassaan Ahmad
Hassaan.Ahmad@pacra.com
+92-42-35869504
www.pacra.com
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Related Research
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PACRA Maintains Stability Rating of NIT Islamic Income Fund
| Rating Type | Stability Rating | |
|
Current (06-Sep-24 ) |
Previous (08-Mar-24 ) |
|
| Action | Maintain | Maintain |
| Long Term | AA-(f) | AA-(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
NIT Islamic Income Fund (or the “Fund”) is a low risk profile Fund. The Fund's objective is to generate a stable Shariah compliant income stream, while seeking maximum possible preservation of capital, over the medium to long-term period, by investing in a diversified portfolio of Shariah Compliant fixed income and money market 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 1.63bln at the end of Jun'24 (Jun’23: PKR 827mln). The credit quality of the Fund comprises of ~30.7% in AA rated avenues ~28.9% in A rated ~21.5% in Govt/AAA , ~21.2% in A, ~14.6% in GOP Ijara sukuk, whereas the rest was invested in others at the end of Jun'24. The Fund had allocated , ~42.3% in cash, ~38.8% in Corporate Sukuk, ~14.6% in GOP Ijarah Sukuks and ~4.3% in others at the end of Jun'24. The WAM of the Fund stood at 112 days at the end of Jun'24, exposing moderate credit risk. The duration of the Fund stood at 61 days at the end of Jun'24, exposing low interest rate risk. The unit holding pattern of the fund stood at ~51.80% representing top ten investor concentration, depicting high redemption pressure. Redemption pressure is addressed through maintenance of sufficient liquidity.
Going forward, any material changes in the investment policy or the devised rating criteria for the assigned rating would have an impact on 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 sixteen open-end funds which includes two non-public funds namely NIT-SEF and NIT-EMOF, four voluntary pension schemes, and an exchange-traded fund. The assets under management of the Company stood at ~PKR 141.4bln at the end of Jun'24.