PACRA Upgrades Asset Manager Rating of National Investment Trust Limited

Business News English

Lahore, May 24, 2021 (PPI-OT): National Investment Trust Limited (“NITL” or the “Company”) is one of the prominent and oldest AMC which reaps the benefit of being the first AMC in Pakistan. The rating upgrade takes into account the consistently better funds performance among peers, fund slate diversification, materialization of digital initiatives and a strong equity base and financial profile. The rating also takes comfort from experienced management team, structured investment decision making process, strong control environment and satisfactory governance framework.

The Compliance, Risk Management and Internal Audit functions are segregated in line with the best practices to strengthen the control environment. The rating also incorporates the sizeable growth in AUM’s by~24% to ~PKR 95bln at end-Dec’20 (Jun’20: PKR 76bln). The growth momentum is expected to continue with management focusing on strengthening its digital presence and outreach which would ultimately results in better retail penetration and distribution and customer services. The market share of ~9.7% at end-Dec’20 (Jun’20: ~9.8%) is well managed despite of the economic uncertainty amid Covid-19 and industry wide growth in relative fixed income avenues.

NITL’s product slate is tilted towards equity category and holds ~33% share of Shariah compliant and conventional equity category at end Dec’20. On average ~80% of AUMs were concentrated in equity funds; however, the management is now focusing to manage concentration in funds which is also evident from a considerable influx in Money Market Fund. NITL is also focusing to capture market share of non-traditional investment avenues and has recently entered into arrangements with prominent entities to provide investment advisory services under SMA mandate a separate SMA team has been hired in this regard.

The AMC is also expecting to launch Social Impact Fund which aims to generate specific beneficial social or environmental effects in addition to financial gains. The overall funds performance remained satisfactory where majority of the funds outperformed the industry averages and benchmark. NITL remained profitable in 1HFY21 and posted highest profits in industry and has the largest equity base at end-Dec’20. NITL’s capitalization and fee generation capabilities provides cushion against market volatility.

The rating is dependent upon the Company’s ability to sustain its market share and upholding strong investment processes and control environment. Meanwhile, consistent performance of funds compared to benchmark and peers is critical. Any sustained downturn in fund performance and/or significant loss in market share may impact the rating.

For more information, contact:
Analyst,
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore, Pakistan
Tel: +92-42-5869504-6
Fax: +92-42-5830425
Email: hammad.rashid@pacra.com
Website: www.pacra.com

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