KARACHI (November 19 2002) : The efforts of the management of National Investment Trust during the past year, coupled with the stewardship of its chairman, have seen Pakistan's largest Mutual Fund become the best performing fund in the country.
The Governor, State Bank of Pakistan, Dr Ishrat Hussain, stated this during his visit to NIT headquarters on Monday.
The SBP governor commended NIT's portfolio restructuring exercise which has seen the Fund revive its role as one of the most active investors in the market, while re-defining the focus of it's investment objective, in order of priority, as income generation, capital preservation, and growth.
Dr Ishrat Hussain visited the NIT Head Office and received a presentation on the performance of the organisation during the past 12 months from its Chairman and Managing Director, Tariq Iqbal Khan. Khalid Siraj, Senior Adviser to the Minister of Finance, Taufiq Hussain, Deputy Governor, SBP, and Mansur-ur-Rehman Khan, Executive Director, SBP, accompanied the governor.
The NIT chairman, during his presentation, highlighted that NIT's return to its unit holders during the previous year had substantially outstripped the return being provided by any alternative investment sources, thus beating the yield curve by a wide margin.
He said that NIT has also been active in undertaking block transactions for divestment of ifs illiquid portfolio to the sponsors of the projects at substantial premiums over prevailing market prices. This accrues significant income for the Fund, while at the same time freeing resources for investment in more liquid avenues.
The full implementation of International Accounting Standard (IAS) 39 in FY2002 and the consequent bifurcation of the portfolio into a tradable component, and a component which is available for sale, will further increase the flexibility available to management to continue streamlining the portfolio, while capitalising on any available opportunity.
All these steps have started yielding tangible benefits, which is also reflected in the fact that NIT's rating by the Pakistan Credit Rating Agency (Pacra) has been improved by two notches to A (f).
Established in 1962, NIT is the largest open-ended mutual fund in Pakistan, with investments in approximately 570 out of the 725 listed Pakistani companies, and around 58,000 Unit-holders.
What makes NIT unique among other mutual funds is the huge size of the fund, which at present is approximately Rs 25 billion ie, approximately five percent of the total market capitalisation of the Karachi Stock Exchange, making NIT the largest single investor on the exchange.