KARACHI, June 15: The National Investment Trust (NIT) would post ‘better than expected’ results for the financial year ending June 30, 2005, NIT Chairman & Managing Director Tariq Iqbal Khan told Dawn on Wednesday. The Fund is to unveil its much-awaited financial results on

July 2.

The chairman did not disclose figures but hinted that “dividend could surely be above Rs3 per unit”; which marks an improvement over Rs2.55 per unit paid last year.

To date, in FY’05, NIT’s unit price has climbed by 34 per cent. Its current Net Asset Value (NAV) is Rs42.15. But the NIT chairman says: “Add to that Rs1.40 per unit that the Fund would realize as its share from strategic sale of the National Refinery Limited (NRL) and an estimated Rs3 per unit from sale of management shares in Pakistan State Oil (PSO) and by that reckoning, the Fund’s NAV already stands at Rs46.55 per unit”.

Mr Tariq said that the NIT would realize Rs6bn on its holding of 20m shares from the privatization of the NRL. Of this, the sum of Rs4 to Rs5 billion would be capital gains. “For next year the NIT is not just looking at capital gains from the privatization of PSO but it is also expecting to reap gains from proposed privatization of Sui Northern Gas Pipelines in which the Fund holds 6 per cent stake”, said Mr Tariq.

Regarding the general belief that the NIT is rich in cash, the chairman admitted that cash flows were good. But he added that he did not believe on sitting atop the cash mountain. During the last two years, it had paid more than 90 per cent of its earnings to its unit holders.

In 2003, the Fund’s earning per share (eps) was Rs1.87 and the payout Rs1.75 per unit. Similarly it had paid Rs2.55 per unit against EPS of Rs2.63 in 2004. For the first nine months of current financial year, the NIT had posted eps of Rs2.93, which was considerably higher than Rs2.28 per share earned in all of the preceding year (2003-04).

Small savers who are invested in NIT units would gain from higher dividend payouts. And so would four major listed companies (three of them banks) that together hold 44 per cent of all NIT units. These include National Bank of Pakistan (NBP) 367 million units; Bank of Punjab (BoP) 151m units; Faysal Bank (FABL) 157m units and Pakistan Reinsurance Company 51 million units.

The NIT is the country’s largest mutual fund with Rs70 billion under its management. The Fund was in dire financial straits in early 2000 with its NAV down in the dumps at Rs7 per unit and still anxious unit holders were making a run for redemption. The Fund has been transformed into an extremely profitable investment avenue for small savers, which most fund managers do not grudge giving credit to the able stewardship of its sitting chairman.

The NIT is also on the privatization plate and the government intends to slice it into five portions, three of which would be placed under the hammer in public auction and remaining two would be distributed among institutions that hold the Letter of Comfort (LoCs), namely NBP, BOP and FABL.

For the year to begin on July 1, 2005, the NIT chairman stated that the Fund had invested in such equities which were ‘guaranteed’ to produce dividend of Rs3bn for the Fund. Including capital gains, he visualized total income to range between Rs7 to Rs9bn for next financial year.