The Pakistan Credit Rating Agency Limited
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Muhammad Usman

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PACRA Maintains Stability Rating of NIT Government Treasury Fund

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

The investment 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-Dec-17, 62% of the fund's exposure was in Government T-Bills and remaining portfolio was invested as cash (i.e. ~38%) with "AA+" and above rated banks. Fund’s average duration stood at 22 days in Dec-17. The unit holding pattern of the fund is highly concentrated with top10 investors representing ~93% of the fund of which 54% are owned investments, which reflects a low level of redemption risk.

Going forward, the fund intends to increase its exposure in T-Bills and the rating remains dependent on maintaining at least 50% allocation towards government securities or AAA exposure on the monthly average basis with portfolio duration not exceeding 60 days. Meanwhile, the remaining assets of the fund must be placed with investment avenues having credit ratings of 'AA' and above.

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 a major shareholder (41.65%) in the company. Other shareholders comprise prominent businessmen and commercial banks having a shareholding of 8.33% each. These shareholders are represented by a board of eleven directors. The company is currently one of the largest asset management company in Pakistan with a portfolio of 8 open-end funds & 2 pension funds. The open end funds have an AUM base of ~PKR 97bln at end-Dec17.

The Managing Director, Mr. Manzoor Ahmed, 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.