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The Pakistan Credit Rating Agency Limited
Press Release

Date
11-Mar-22

Analyst
Muhammad Junaid
muhammad.junaid@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 Income Fund

Rating Type Stability Rating
Current
(11-Mar-22 )
Previous
(10-Sep-21 )
Action Maintain Maintain
Long Term AA-(f) AA-(f)
Short Term - -
Outlook Stable Stable
Rating Watch - -

NIT Income Fund (or the 'Fund') is a medium-risk profile Fund. The assigned rating reflects its competitive stream of returns with a moderate level of risk. The assigned rating reflects the moderate strength of the Fund's credit and interest rate risk profile. As per the rating criteria, the Fund shall keep at least 15% of assets in 'AAA' rated avenues. At the end Dec'21, the Fund had invested ~49% of net assets in 'AAA' rated avenues. About 42% of the Fund's assets were invested in banks rated 'AA-' and above. Whereas, ~8% of Funds were invested in 'A+' and above rated TFCs. The fund also had an exposure of ~19% of net assets in comparatively risky avenues such as corporate sukuks and MTS. The weighted average to maturity of the Fund was ~381 days as at end-Dec'21. While, the duration of the Fund stood at ~50 days which provides it the flexibility to deal with interest rate risk. The unit holding pattern of the Fund is highly concentrated with the top ten investors representing ~82% of the Fund's assets, out of which ~56% are owned investments which provide a cushion against the redemption pressure.
Going forward, based on market expectations the Fund may shift its assets towards long tenor instruments. Material changes in the Fund's asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk, would affect the rating.

About the Entity
National Investment Trust Limited was established in 1962 and is a pioneer in the mutual fund industry. The Company’s Board of Directors currently comprises ten board members out of which nine are non-executive. Mr. Adnan Afridi, CEO/MD who joined in Feb'19 holds profound experience in the financial services and capital markets. Mr. Manzoor Ahmed is the COO and has a successful track record of managing the operations and investment portfolio of the Company. The Company is currently one of the largest asset management companies in Pakistan with a portfolio of thirteen open-end funds which includes two non-public funds namely NIT-SEF and NIT-EMOF, two voluntary pension schemes, and an exchange-traded fund. The assets under management of the Company stood at ~PKR 96,759mln (including SEF & EMOF) end-Dec'21.

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.