The Pakistan Credit Rating Agency Limited
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Ayesha Qasim

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PACRA Maintains Stability Rating of NIT Islamic Income Fund

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

The objective of the NIT Islamic Income 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 rating reflects the fund's low risk asset allocation by investing in good credit quality investment avenues. At end Jun-18, ~74% of the fund's exposure was invested as cash with “AA+” rated bank and ~13% with ‘’A+’’ rated bank. The remaining portfolio (~13%) was invested in Corporate Sukuks. The unit holding pattern of the fund is highly concentrated with top ten investors representing ~69 % of the total fund size of which ~29% are owned investments, which reflects low level of redemption risk.

Going forward, the fund intends to increase its exposure in corporate sukuks. The remaining assets of the fund will remain invested in cash balances. 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.