KARACHI, Feb 7: The National Investment Trust (NIT) would launch two new products to suit separately those classes of investors who prefer, to earn dividends irrespective of fluctuations in Net Asset Values (NAVs) and the other for those who are averse to risks and would rather put money in capital-protected funds. Chairman NIT, Tariq Iqbal Khan told a press briefing on Thursday that the decision about the new products would be taken at the Board meeting to be held on Friday.

Khan, who also heads the Investment Corporation of Pakistan (ICP) — managers of the 26 closed-end mutual funds — said that there never was a proposal to merge ICP with NIT, but the process of privatization of the latter was going apace. The four prospective bidders: ABAMCO, Arif Habib Securities, PICIC and First Habib Modaraba were in the process of conducting the ‘due diligence’ exercise.

Khan recalled that he had taken over the reins of NIT — the open- ended mutual fund, that claims 60 per cent of the market share of the country’s mutual fund industry — on October 3. He stated that the Trust had started fresh investment into the equity markets from October 16 and between then and now, the NAV of NIT unit had risen 43.7 per cent to Rs11.01, from Rs7.66. Some 61,000 unit holders, collectively hold 1.67 billion NIT units.

The market value of total funds under NIT management was stated to have increased by 38.2 per cent to Rs18.45 billion. NIT chief who was refreshingly open to press criticism, said that during this time, NIT had outperformed the KSE All-share index, but admitted that it had underperformed the KSE-100 index. “Fund managers could have been more agile in seizing investment opportunities in the past”, Khan said but hastened to add that he was answerable only for his own term in office. He said that since October, fresh investments had been made in ‘profit- yielding’ securities and also in the form of ‘block deals’, which contrary to popular perception, were done at premium — and not discount — to the market price. He cited Gatron Industries, where NIT entered into block deals at Rs21 and sold the stocks in a rallying market, at Rs55. NIT chairman said it signified two things: that the intrinsic value of listed equities was invariably higher than the market price and two, the primary goal of NIT was to enhance value of its portfolio to benefit the unit holders, while at the same time, safeguarding the interest of all minority shareholders in any such transaction.

As regards the ICP, Tariq Iqbal Khan observed that part of the reason for all of its 26 funds trading at discounts to their NAVs was, the lack of floating stocks. “Investors who have taken stakes in ICP funds are quite content to hold on to their investment and reap the yearly dividends”, he said, but agreed that it was time to make the funds more liquid so that trading could take place. He promised to take up the matter at the next Board meeting of ICP scheduled on February 11.