PACRA Upgrades Stability Rating of NIT Income Fund
|Rating Type||Stability Rating|
The objective of NIT Income Fund is to generate competitive stream of return with moderate level of risk for its unit holders, by investing primarily in fixed income securities/instruments.
The rating reflects the fund's liquidity and credit profile emanating from significant allocation of assets as cash balances (63%) in banks having minimum credit rating of AA-. The remaining assets of the fund were invested as TFCs (26%) and T-Bills (1%). Exposure in Margin Trading System was ~2%, which due to its self-liquidating nature, possesses less risk over a short tenure. The unit holding pattern of the fund is less diversified with top ten investors representing ~71% of the fund's assets (out of which ~46%) are owned investments which exposes the fund to low redemption pressure.
Going forward, the fund intends to maintain exposure in cash balances and some part of the investment in TFCs. 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.
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. Adnan Afridi has been appointed as the Managing Director of the company in Feb-19. The authority for appointment of CEO/Managing Director lies with the Government of Pakistan.
Mr. Adnan Afridi, Managing Director of the company, holds profound experience in the financial services and capital markets. 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 assets under management of ~PKR 85 billion at end Dec-18.