KARACHI, May 7: National Investment Trust (NIT), which is the largest mutual fund in Pakistan with Rs29 billion under management, had outperformed the benchmark KSE-100 index by 4.6 per cent during nine months period July 01, 2002 to March 31, 2003, Chairman & MD NIT Mr. Tariq Iqbal Khan told a press briefing on Wednesday.

He elaborated that the per unit Net Asset Value (NAV) of NIT had increased by 56.9 per cent to Rs17.24 on March 31, 2003, from Rs10.99 on July 11, 2002 (the first day following book closure). KSE-100 index had climbed by 52.3 per cent to 2,715.72 points, from 1,783.17 points during the same period.

The chairman, NIT, stated that the Unit holders’ funds had meanwhile grown from Rs17.4 billion at year-end FY2002 to a level of Rs25.6 billion as at March 31, 2003 — an increase of 47.1pc in the nine- month period. He listed NIT’s portfolio objectives, in order of priority, as: 1) income generation, 2) capital preservation and 3) growth.

Giving more details about the performance during the nine- month period, the chairman said: “Profits for the nine months are up by 28pc over the corresponding period from the previous year and the income per unit of Rs1.46 earned in the first nine months of the current fiscal year already exceeds the full year per unit income of Rs1.22 earned last year.” he said.

NIT has witnessed a 10.9pc rise in dividend income, with Rs1,827 million earned for the first nine months of the current fiscal year as compared to Rs1,648 million earned in the corresponding period of the previous year, said the NIT chief, attributing the rise partly to higher dividends declared by corporates and partly to rescheduling of portfolio. “The results of portfolio restructuring have now started to bear fruit,” he said.

Chairman NIT observed that greater emphasis was being placed on TFCs, investment in which had risen to Rs503.7 million on March 31, 2003, from Rs251.8 million on the same date in 2002.

Investment in equity securities at fair value stood at Rs27.5 billion, up from Rs20 billion on March 31, last year. “Income from TFCs is constant but that from equities variable,” he said. The chairman mentioned that capital gains realized have shown an stronger growth of 35.1pc during the same period, rising from Rs464m earned in July-Mar FY2002 to Rs627 million earned in July-Mar FY2003.

Mr.Tariq Iqbal Khan pointed out that financial charges during the period under review had increased to Rs186.3m, from Rs169.0m, but that was due to increase in short-term finances to Rs2.8bn, from Rs970m. He explained that funds had been acquired at a cheap 6pc interest rates and invested in TFCs that had yielded 8 per cent, providing good margin to NIT.

NIT was said to have decided to extend the facility of discount of 25 paisa per unit for units purchased on countrywide basis for a further period of ten (10) days, i.e., from May 15, 2003 to May 24, 2003, he said.

The chairman said that NIT foresees a bright future for the equity markets with the quick end to the war in Iraq expected to minimise the impact on the economy. “This is already evident to an extent from the revived interest in the stock market,” he said, and added that corporate earnings and payouts were continuing to improve on the back of increased macroeconomic stability. This coupled with the rationalisation of the interest rate environment meant that investment in equities could continue to produce attractive returns for investors, he said.