The Pakistan Credit Rating Agency Limited
Press Release


Mohsin Naseer

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PACRA Assigns Initial Stablility Rating of NIT Islamic Income Fund

Rating Type Stability Rating
Action Initial
Long Term AA-(f)
Short Term -
Outlook Stable
Rating Watch -

The objective of the fund is to ensure a high level of portfolio liquidity, while maintaining a portfolio composition which yields returns in excess of the benchmark. The rating reflects the fund's low risk profile emanating from its policy to invest in avenues rated 'AA+' and above. At end-May17, 96% of the fund's exposure was invested as cash with “AA+” rated avenues and the remaining portfolio was invested in Corporate Sukuks. The unit holding pattern of the fund is highly concentrated with top10 investors representing 86 % of the total fund size, which reflects redemption risk.

Going forward, the fund intends to increase its exposure in banks with AA+ rated avenues. The remaining assets of the fund will be placed with high quality corporate bond. Material changes in the fund's asset allocation strategy, which could negatively impact the fund's credit quality and exposure to interest rate risk, remain critical for the rating.

About the Entity
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.

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 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.