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The Pakistan Credit Rating Agency Limited
Press Release

Date
31-Dec-18

Analyst
Masooma Zahid
masooma.zahid@pacra.com
+92-42-35869504
www.pacra.com

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This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA

PACRA Maintains Stability Rating of NIT Government Bond Fund

Rating Type Stability Rating
Current
(31-Dec-18)
Previous
(30-Jun-18)
Action Maintain Maintain
Long Term AA(f) AA(f)
Short Term - -
Outlook Stable Stable
Rating Watch - -

The objective of NIT Government Bond Fund is to generate best possible return with minimum risk, for its unit holders, by investing primarily in the government securities.

The rating reflects fund's low risk and sound liquidity profile. At end Jun-18, the portfolio comprised bank placements of ~29% with AA+ rated banks. The remaining assets of the fund were invested with T-Bills (69%) which due to its self-liquidating nature possess less risk over the short tenure. The weighted average maturity of the portfolio stood at 20 days. The unit holding pattern of the fund is highly concentrated with top ten investors representing 78% of the fund's assets, (of which ~42% are owned investments) which exposes the fund to low level of redemption pressure.

Going forward, the fund intends to maintain exposure in T-bill and some part of the investment in banks having good credit quality. 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
National Investment Trust Limited was established in 1962 as an unquoted public limited company. It is the first asset management company of Pakistan and is the pioneer of domestic mutual fund industry. Company’s Board of Directors currently comprise eleven board members out of which ten are non-executive. Mr. Manzoor Ahmed is the Managing Director of the company. The authority for appointment of CEO/Managing Director lies with the Government of Pakistan.

Mr. Manzoor Ahmed, Managing Director of the company, holds profound experience in the domestic mutual fund industry. He is supported by a team of qualified and experienced professionals. The company is currently one of the largest asset management companies in Pakistan with a portfolio of eight open end funds and two pension funds with overall AUMs of ~PKR 90 billion at end Nov-18.

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.