NIT outperforming benchmark

The pioneer asset management company of Pakistan. National Investment Trust Limited has announced its financial results for the first quarter of fiscal year 2012. The first month of this quarter may see a decline of 305 points in KSE-100 index owing to the deteriorating law-and-order condition in Karachi and outflow of capital from the stock market. However, amidst the worsening economic environment, NIT outperformed its benchmark. NITs oldest and biggest fund; NI(U)T outperformed the benchmark KSE 100-index by 4.81 percent. From the start of this fiscal year, the benchmark index fell by 5.87 percent as compared to NAV of NIUT which had fallen by 1.07 percent by the end of 1QFY12. Consequently, its earnings per unit fell by around 28 percent in 1QFY12, compared to the same period of last year. The fund was able to outperform the index by shifting from more volatile stocks to stable ones. According to reliable sources one of the reasons behind the better performance compared to the 100 index was NIUTs focus shift away from OGDC, where as the benchmark had more exposure to it. Sources revealed that funds focus was on dividend paying stocks. This is proven from the 15.9 percent increase in NITs dividend income in 1QFY12. In the 1QFY12 dividend income was Rs.55 million higher than the income in 1QY11. At the same time the income from capital gains fell by 24 percent in the 1QFY12 as compared to the same period in last fiscal year. The NIT-SEF fund outperformed the benchmark index by 2.11 percent. Reliable sources say that investments made from the pool of funds have large amounts of unrealised gains which if realised would raise the yield by a considerable amount. Sources also asserted that the yield would have been higher if the fund had less exposure in OGDC, which it has to keep due to certain restrictions. The NIT(EMOF) earned a profit of Rs.101 million and had earnings per unit of Rs.1.86 as compared to the Rs.80 million in the same period last year; showing an increase in profits of 26.25 percent. The NIT government bond fund outperformed the benchmark by 107bps in the 1QFY12. It also experienced an 8 percent increase in earnings per unit. The earning per unit of NIT Income fund increased by roughly 27 percent, compared to the same period of last year, while the fund outperformed the benchmark by 86bps. The last month of the outgoing quarter saw local bourses stabilising; the benchmark index gained 691 points while trading volumes also improved. Besides, the discount rate cut will likely act as a further boost to equity valuations in coming months. NIT is sure to benefit from any potential rally.