PACRA Maintains Stability Rating of NIT Government Bond Fund
|Rating Type||Stability Rating|
The fund's mandate is to generate reasonable return with minimal risk by primarily investing in bonds and short-term debt securities issued by Government of Pakistan (GoP).
The rating reflects the fund's very strong credit quality and a sound liquidity profile emanating from the fund's policy to invest 70% of asset in a mix of short-term and long-term government securities. At end-May’17, fund's exposure with T-Bills was 51% and 20% exposure was with PIBs. The remaining assets of the fund were invested as cash with banks rated 'AA+'. On monthly average basis, fund's duration was below 2 years in last 2 quarters. At end-May17, the unit holding pattern of the fund is highly concentrated towards top 10 investors representing 73% of the fund's assets, which exposes fund to redemption pressure.
Going forward, the rating remains dependent on maintaining at least 70% allocation towards government securities with portfolio duration not exceeding 2 years. PACRA would monitor compliance against agreed parameters on monthly average basis.
NIT is the first asset management company of Pakistan, formed in 1962. The Government of Pakistan (GoP) directly and indirectly through government owned entities is major shareholder (41.65%) in the company. Other shareholders comprise prominent businessmen and commercial banks having shareholding of 8.33% each. These shareholders are represented by a board of ten directors. The company is currently the largest asset management company in Pakistan with a portfolio of seven open end funds & two pension funds. The open end funds has an AUM base of ~PKR 107bln at end-May17. The company operates the country's largest equity fund - NI(U)T - (fund size of ~PKR 92bln at end May-17.)
The Managing Director, Mr. Shahid Ghaffar, holds profound experience in the domestic mutual fund industry. He is supported by a team of qualified and experienced professionals.