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NIT to float two new funds soon

RECORDER REPORT

KARACHI: National Investment Trust (NIT) would float two funds shortly-NIT Privatisation Fund and NIT Fixed Income Fund Ñ aimed to broaden the investors base and give more dividends on capital market operations.

The NIT Privatisation Fund would buy the shares of the privatised units to be listed at the Karachi Stock Exchange. The government aims to privatise state-run companies through stock markets to give much needed impetus to the market and give more spread and investment opportunity to investors both home and abroad.

The Fund would be launched with the following objectives: broad-basing of ownership of state-owned enterprises; assisting small savers to benefit from the privatisation process; broadening the base of stock market, encouraging the privatisation process; and releasing funds to government prior to sale of strategic stake.

The NIT Income Fund would cater for those investors who are conservative and are looking for stability of principal along with a regular income stream. The Fund would also be attractive to overseas Pakistanis who would like to assure a regular monthly income for their relatives in Pakistan by investing in this fund. The Fund would invest in debt and regular income securities issued by the federal government, financial institutions, and corporations and terms finance certificates and certificate of investment. The size of the open-ended fund initially would be Rs 250 million.

Istaqbal Mehdi, Chairman and Managing Director of the NIT told a press conference on Friday that the health of the NIT had improved during the last six months following a boost at the stock market. Slowly the portfolio of the Trust has been switched to liquid stocks which in time of depression could be saleable.

He added that the value of NIT units during the last six months improved by 36 percent and in a year's period registered a growth of 60 percent. In the total portfolio of the Trust, the share of fuel and energy has been around 58 percent.

The unit price which was Rs 7.95 on July 1999 rose to Rs 10.80 as of December 31, 1999. He said that the total funds under management also increased from Rs 14 billion to Rs 19 billion during these six months while the unit price further improved and touched the barrier of Rs 13.30 last week thus resulting in increase of value of funds under management to Rs 23.6 billion.

The Trust earned about Rs 287 million by selling shares above their prevailing market rates and earned a net income of Rs 749 million during last six months.

The NIT chairman said that the trust has successfully structured its portfolio by investing in sectors like fuel and energy upto 45 percent, and in chemical and pharama upto 13 percent, which constitute 58 percent of the total portfolio and are the most lucrative sectors in terms of real growth. NIT is holding major shares in leading blue chips companies like PSO 20 percent, Shell 8 percent, Fauji Fertilizer 7 percent, Hubco 3 percent and PTCL 2 percent.

Istaqbal said that the management had taken initiatives for introducing major structural changes when the investment market was witnessing an unprecedented growth. To further protect unit holder's interest NIT had applied to Securities and Exchange Corporation of Pakistan for registration under the Asset Management Company Rules. He said that the request had been approved "in principle" and now all the advertisements of the Trust are approved first by SECP thus removing any doubts of exaggerated claims.

He added that confidence of the unit holders had improved following the Trust measures to recover a large portion of loans which now stood at only 2 percent of overall investments. After this recovery he said 98 percent of NIT's portfolio was now invested in shares of listed companies.

"The performance of NIT during the last six months has improved appreciable and unit-holders for the current fiscal year would get a healthy dividend," the chairman said.