NIT unit net asset value increased in Pakistan
Pakistan Times Business & Commerce Desk

KARACHI: The Chairman and Managing Director of National Investment Trust Tariq Iqbal Khan Saturday announced that the net income of the Trust for the 9 months period of current fiscal year registered a growth of 21 percent recording increase from Rs. 3.5 billion to Rs. 4.3 billion as compared to the corresponding period last year.

Addressing a press conference here he said the income translates into earning per unit of Rs. 2.93 as compared to Rs. 2.28 during the same period last year registering a growth of 28.5 percent The earning for the full previous fiscal year was Rs. 2.63.

The NIT chief took pride in stating that the Net Asset Value of the unit has increased from Rs. 30.53 as on June 30, 2004 (Ex-dividend) to Rs. 44.96 as on Marachi 31, 2005 showing an impressive growth of 47.3 percent during the period as compared to 47.2 increase in the KSE-100 Index. Thus NIT has once again outperformed the stock exchange benchmark by a margin of 0.1 percent despite the fact that increase in KSE-100 index was purely on the back of very few stocks where the Trust strategically remained under-weighted.

The NIT Chairman mentioned that the portfolio restructuring exercise that was started few years ago with the objective of improving the dividend yield and quality of portfolio has shown excellent results. It has now recorded a 31 percent strong rise in dividend income with Rs. 2,707 million earned for the first nine months of the current fiscal year as compared to Rs. 2,061 million earned in the corresponding period of last year. This has already crossed the full year dividend inflow of Rs. 2,487 million, recorded last year, which was highest ever in the 42 year-history of NIT.

The Chairman mentioned that as a result of enhanced and prudent stock market activities capital gains realized have shown as even stronger growth of 44 percent during the period. Capital gains realized rose to a record level of Rs. 2.4 billion as compared to Rs. 1.6 billion during the same period last year.

When asked by this correspondent about the major factor that attributed to the outstanding performance of NIT, he replied: “We started the turn around process in Oct. Nov. 2001 and laid stress on a proper management of whatever funds were available and according we converted the non-performing portfolios into performing ones in the first place.” Then the research department was improved and the quality of asset management was completely reviewed.

He recalled that NIT introduced a new marketing strategy and trained employees through seminars and workshops. The changed strategy guided investors not to go for speculative instruments and as a result NIT unit with a face value of Rs. 10 in 2002 had Rs. 21 in 2003. The said progress was followed by the streamlining of corporate governance department resulting in the dividend income increase from Rs. 1.5 to Rs. 3 billion, he explained.

He disclosed that at present there were 1.5 billion unit holders, 70 percent of which are financial institutions.

According to the accounts approved by the Board of Directors in the Annual General Meeting held today the sale of NIT units stood at Rs. 4.4 billion (including CIPs0 as against redemption of Rs. 9.6 billion. All redemptions were met to the utmost saitisfaction of the investors that has helped to further enhance the confidence of unit-holders and investors. In spite of these redemptions the net assets of the Fund have depicted a robust growth of 34.5 percent by increasing from Rs. 49.5 billion as on June 30, 2004 to Rs. 66.6 billion as on March 31, 2005.

He pointed out that the Karachi Stock market after touching the lifetime high level of 10,303 points on March 15 took a huge downward technical correction of 25.1 percent and dropped to 7,708 points level on March 28, 2005 whereas Net Asset Value of NIT unit fell by 17.9 percent only during the same period which clearly shows the strength its portfolio that in the declining market the rate of decline of NIT units is significantly low translating into a significant performance of 7.2 percent.

Tariq Iqbal concluded by saying that the pro-active and dynamic guidelines set by the BoD along with timely and precise execution of such policies are attributable for the remarkable performance of the Fund.●