The Pakistan Credit Rating Agency Limited
08-Mar-24
Analyst
Madiha Sohail
madiha.sohail@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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PACRA Maintains Stability Rating of NIT Islamic Income Fund
| Rating Type | Stability Rating | |
|
Current (08-Mar-24 ) |
Previous (08-Sep-23 ) |
|
| 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 medium risk profile Fund. The objective of the Fund 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 1.26bln at the end Dec’23 (Dec’22: PKR 1.60bln). The Fund had allocated ~60.38% in banks and ~12.94% in Corporate Sukuk. Whereas ~17.03% in GoP Ijarah Sukuks and ~7.86% in Musharaka Placements at the end of Dec’23. The WAM of the Fund stood at 187 days at the end of Dec’23, exposing the Fund to credit risk. The credit risk is high due to investment in Govt securities. However, it's manageable. The duration of the Fund stood at 149 days at the end Dec’23, exposing the Fund to high interest rate risk. The unit holding pattern of the fund stood at ~56.1% representing top ten investor concentration, limiting the exposure to redemption pressure.
Going forward, any material changes in the investment policy or the devised rating criteria for the assigned rating would have an impact on the ratings. Risk may vary slightly from time to time considering the volatility of economic conditions.
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 123.2bln at the end-Dec'23.