National Investment Trust Limited (NITL)

NITL was incorporated as an unquoted public limited company in 1962. The principal activity of the company is to manage NI(U)T, an open end mutual fund. The fund is the largest open-end mutual fund in Pakistan, with investments in approximately 600 of the 706 listed Pakistani Companies. NIT’s portfolio has over 90 percent correlation with the Karachi Stock Exchange all Share Index and is as such the nearest proxy to an Index fund in Pakistan. NI(U)T is valued at approximately Rs. 26 billion. The fund has a 93% weighting in equities and 7% weighting in fixed income securities. NITL’s objective is to provide its Unit-holders with a balance between their regular income needs and long-term capital appreciation. NITL has approximately 62,000 unit holders and over 19 branches and 2 booths across Pakistan.

NI(U)T’s unique attraction is that it provides investors with a one window entry to Pakistan’s equity markets which at times can be illiquid and volatile. Pakistan, like most developing markets, has only a handful of stocks with the market capitalization and liquidity which makes them feasible additions to an international investment portfolio. However, these stocks are not representative of the economy as a whole and ignore the usual engine of growth for developing economies- the middle to small sized companies which can grow at multiples of, rather than percentage points over, last year’s performance. Identifying these companies is hard enough, but even if one could identify them, trading in their shares is likely to be so illiquid as to make adding them to your portfolio a considerable challenge.

In this environment, NI(U)T offers an unparalleled avenue for investing in corporate Pakistan:

• Established since 1962
• Historical entitlement to a preferential allocation of shares in companies to be listed (withdrawn as per 1995)
• Investments in 600 out of a total of 706 listed companies
• Track record of regular dividend payments
• The portfolio accounts for nearly 4 % of the stock market and nearly 80 % of all domestic mutual funds
• Offers investors ready and easy access to Pakistan’s capital market

Compounding this lack of ready access is the fact that there are only a handful of offshore funds dedicated to investing in Pakistan. Additionally, given their size they also do not provide the investor with a wide enough exposure to the currently un-fancied, but potentially most lucrative, medium sized and smaller companies. The fund has also significant strategic holdings in some of Pakistan’s best-managed companies and in major privatization transactions e.g. Pakistan State Oil, Sui Northern, Sui Southern, Karachi Electric Supply Corporation, Pakistan Tele Communication Limited etc. These companies comprise the backbone of Pakistan’s economy.

In 1998, NITL embarked on a major restructuring program, which included induction of senior professional management and modern asset management techniques. The other major step taken by the company includes its proactive role in corporate governance. Each investment decision is made within guidelines provided by NITL’s investment committee. The objective of the team - management approach is to safeguard the fund from over reliance on any individual and to ensure transparency and rigorous evaluation of investment decisions.

Shareholders of National Investment Trust Limited. The GOP presently owns 8.33% of NITL’s shares directly and 50% shares indirectly through government controlled entities. 8.33% shares is owned by each PICIC and MCB while 25% of NITL shares are held by three industrialists in equal proportions. The following is a list of NITL’s shareholders.

1. National Bank of Pakistan
2. Habib Bank Limited
3. United Bank Limited
4. Muslim Commercial Bank
5. Pakistan Industrial Credit & Investment Corporation
6. Industrial Development Bank of Pakistan
7. Investment Corporation of Pakistan
8. Pakistan Insurance Corporation
9. Government of Pakistan
10. Seat held by late Mr.Ahmed Dawood is vacant
11. Mr. Abdul Hamid Adamjee
12. Mian Tajammal Husain