Press Release

VIS Reaffirms Management Quality Rating of National Investment Trust Limited (NIT)

Karachi, December 28, 2023: VIS Credit Rating Company Ltd. (VIS) reaffirmed Management Quality Rating of ‘AM1’ (AM-One) to National Investment Trust Limited (NIT). The assigned rating of ‘AM-1’ (AM-One) signifies that the asset manager exhibits excellent management characteristics. Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on December 29, 2022.

National Investment Trust Limited (‘NIT’ or ‘the AMC’) has been operating in the asset management industry for over six decades. The Company is a pioneer in mutual fund industry and is also the oldest AMC in Pakistan. Government of Pakistan (GoP) is the single largest shareholder (direct & indirect stake through various government owned entities) while other shareholders comprise private sector institutions.

Assigned rating take into account the majority shareholding and management control of NIT by GoP and the availability of its implicit support. During the year, overall Asset Management Company (AMC) industry experienced a growth of 28.6% during FY23 largely driven by a growth in money market funds due to high interest rates prevailing in the market. In relation to this, NIT’s AUMs comprising mostly of equity investments remained stagnant amid flat PSX Index during FY23, slipped in market position.

Historically, the AMC’s asset mix mostly remained concentrated in the equity portfolio, however during FY23, quantum of AUMs operating under money market and income schemes increased. As of FY23, money market and income funds together constituted around 45% of total AUMs (FY22 31%). Top-10 investors remained moderate in relation to peers, the same constitute around 36% in total AUMs.

Rating also incorporates AMC’s fund performance which is majorly weighted by the AMC’s largest equity fund (NIUT), during the year NIUT was placed in the 4th quartile on account of volatility of equity market performance. Overall, 49% of the total AUMs performance has deployed in the top 2 quartiles during FY23 (FY22: 93%).

Ratings also incorporate the overall financial performance of the AMC wherein management fee has witnessed a decline of 9% Y/Y, however, the overall recurring income witnessed a growth of 9% Y/Y mainly supported by higher dividend income and share profit from associates. The AMC’s financial risk profile is considered sound as the Company has a debt free balance sheet. The assigned rating remains dependent on improvement in market positioning and maintaining fund performance in line with peers.

For further information on this rating announcement, please contact Mr. M. Amin Hamdani (Ext: 217) or the undersigned (Ext: 201) at (021) 35311861-4 or email at info@vis.com.pk.



Javed Callea
Advisor

Applicable Rating Criteria: Asset Management Companies
https://docs.vis.com.pk/docs/AMC-Methodology-201906.pdf

VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf

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