The Pakistan Credit Rating Agency Limited
Press Release
a

Rating Action
Lahore: (24-January-2007)
    PACRA Assigns the Asset Manager Rating to
National Investment Trust Limited (NITL)
 

 
Analyst
Moin Khalid
(+92-42-586 9504)
moin@pacra.com

 

 

 













 

 

 

 

 

 

 

Disclaimer
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The Pakistan Credit Rating Agency (PACRA) has assigned an asset manager rating of “AM2-” to National Investment Trust Limited (NITL). The rating denotes the company’s very strong capacity to manage the risks inherent in asset management and the asset manager meets very high investment management industry standards and benchmarks.

The rating reflects the company’s strong franchise, sound control systems, and established infrastructure including its extensive outreach. Although the management’s focus on preparing the entity for privatization has constrained the pursuit of aggressive marketing strategy, or other initiatives adopted by the industry in recent years for improving service standards, mainly linked with technological advancement, the entity has demonstrated a strong capacity to effectively manage the Fund [National Investment (Unit) Trust], while also providing an improved level of service to investors. This was mainly a result of the reform process initiated under the guidance of the present Managing Director in early 2002, aimed at gradual restructuring of the portfolio through effective investment strategies, strengthening in-house research capabilities, stream lining of the systems and processes, and reinforcement of the overall control environment. These initiatives led to a substantial improvement in the performance of the Fund. Moreover, since the current MD has been instrumental in turnaround of the company, his continuity till the completion of the privatization process remains a critical rating factor. Meanwhile, pending the privatization, the rating would remain on rating watch.

About the company: NITL, an unquoted public limited company, was established in 1962 with a mandate to manage National Investment (Unit) Trust. The Fund is the largest open-end mutual fund in the country, with net assets of over PKR 70bln at end-Sep06. Government of Pakistan controls NITL by virtue of its power to appoint the Managing Director, and majority shareholding in the company, directly and indirectly though government controlled entities. In line with the Cabinet Committee on Privatization approval, the process for privatization of the management rights of the Fund is currently in process.
 
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's 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.

 

    
justin guarini