Analyst
Muhammad Junaid
muhammad.junaid@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
PACRA Maintains Stability Rating of NIT Income Fund
Rating Type | Stability Rating | |
Current (11-Mar-22 ) |
Previous (10-Sep-21 ) |
|
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 assigned rating reflects its competitive stream of returns with a moderate level of risk. The assigned rating reflects the moderate strength of the Fund's credit and interest rate risk profile. As per the rating criteria, the Fund shall keep at least 15% of assets in 'AAA' rated avenues. At the end Dec'21, the Fund had invested ~49% of net assets in 'AAA' rated avenues. About 42% of the Fund's assets were invested in banks rated 'AA-' and above. Whereas, ~8% of Funds were invested in 'A+' and above rated TFCs. The fund also had an exposure of ~19% of net assets in comparatively risky avenues such as corporate sukuks and MTS. The weighted average to maturity of the Fund was ~381 days as at end-Dec'21. While, the duration of the Fund stood at ~50 days which provides it the flexibility to deal with interest rate risk. The unit holding pattern of the Fund is highly concentrated with the top ten investors representing ~82% of the Fund's assets, out of which ~56% are owned investments which provide a cushion against the redemption pressure.
Going forward, based on market expectations the Fund may shift its assets towards long tenor instruments. Material changes in the Fund's asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk, would affect 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 ten board members out of which nine 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 thirteen 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 96,759mln (including SEF & EMOF) end-Dec'21.