KARACHI, Oct 23: The National Investment Trust is working on re-construction of its portfolio to ensure better income levels of the unit holders and be in a position to declare good dividends, NIT chairman Tariq Iqbal Khan said here on Tuesday.

Talking to a group of journalists, he said the environment of the capital market was very conducive for investment at present levels. “We have built up our positions last Tuesday to take the long-term benefit of lower prices of the selected scrips,” he informed.

The NIT will develop its operational strategies according to the stock market environment and capitalize the opportunity for optimum gains, he remarked.

He said the current slump on the KSE has naturally affected the value of NIT portfolio, however, the fundamental strength of NIT core investments remains unquestioned. Last year NIT earned a total dividend income of over Rs1.6 billion on investment portfolio, which at current market prices would provide a yield of 10 per cent, that shows the strength of the core holdings.

Tariq said the trust adopted a strategy of value based trading, whereby disinvestments were only made on strategic considerations, and substantially above the market prices. This policy proved invaluable in stemming the erosion of value from the fund, and enabled the NIT to book capital gains in a falling market, he observed.

Tariq Khan stated that NIT is in the process of restructuring it’s portfolio and henceforth the NIT’s investment considerations will factor in the fact that the NIT portfolio includes some scrips, which bear fundamental value, even though current market prices are depressed.

The National Investment Trust is an open-ended mutual fund that also happens to be the largest mutual fund in the country with over 60 per cent of market share of the mutual fund industry. At present NIT has around 65,000 unit holders, who collectively hold 1.75 billion NIT units.

The total value of the funds invested in the market by the NIT, at current prices, is Rs16.1 billion, which is over 5 per cent of the total market capitalization of the Karachi Stock Exchange, making NIT the largest single investor on the KSE.

To a question about the privatization of NIT, he said the Cabinet Committee on Privatization in the last week of September decided to disinvest 58 per cent government holding in the NIT through the Privatization Commission.

The Privatization Commission has already started initial work on this project, he added.—APP