KARACHI, Jan 24: National Investment Trust (NIT) would benefit from a windfall gain of around Rs5 billion — Rs4.7 billion to be exact, from the block sales of shares in PICIC; Prime Bank and the recently announced Lakson Tobacco Company Limited.

The gains to the largest mutual fund in the country with Rs76 billion under management, comes as a ‘collateral benefit’, since directly NIT had nothing to do with those transactions but has stood to benefit from change of hands in controlling stakes in those banks/company.

But before NIT chief Tariq Iqbal Khan gets too cross, management’s correct decisions to hold on to good stocks has also to be appreciated.

In case of Lakson Tobacco Company, the Swiss-based principal Philip Morris announced this week, its intention to raise its holding to 90 per cent through acquisition at Rs666.89 per share. By virtue of NIT’s holding of 1.761 million shares in Lakson, it would receive Rs1.751 billion and deducting the cost of purchase of the stock at average price of Rs297.56, the NIT would reap capital gains of Rs650 million.

In the block deal of Prime Commercial Bank at around Rs54 per share, the NIT holds 35 million shares on which it is expected to realise sale proceeds of Rs1,761 million including the capital gains component of Rs650 million (average purchase price of the trust being Rs9 per share).

Finally, in the corporate acquisition of PICIC, NIT holds 62.4 million shares. With the block sales deal struck at Rs83-84 and the NIT’s cost of its holding at the purchase price of PICIC stock, way back at only Rs39, the NIT stands to realise Rs4,994 million, which would contain gains of Rs2,559 million.

But the entire amount of capital gains in the three acquisitions, NIT would be able be book during the current financial year to end June 30, 2007. If the privatisation of Pakistan State Oil (PSO) would go through this time, the fund might be able to realise proceeds of close to Rs10 billion (at the current stock price of Rs334 per share) in the next financial year, since NIT holds 27 million shares or 16 per cent of PSO stock.