Finance Minister Shaukat Aziz has said that National Investment Trust's superior performance of recent past has alleviated the problems of small investors to a large extent, and the investors in general have benefited.
The gains realised and the handsome dividend inflows to such investors have also given a support to the stock market.
He stated this on Saturday on being briefed by National Investment Trust Limited (NIT) management.
He said that mutual fund industry has finally started to develop to a reasonable level but there is still a long way to go.
A developed mutual fund industry has a marked significance for pension funds, provident funds and other such schemes of employees' terminal benefits.
Mutual fund industry plays a vital role in the operation of stock markets as well as for the small investors and thus contributes significantly towards the development of the economy of a country, he added Mutual funds also play an important role for small investors who do not possess the necessary skill to operate directly in the market and all these investors can benefit from economics of scale, as well as expertise available in the shape of experienced, qualified and professionally competent managers.
He added that management of NIT by pursuing prudent policies, sense of responsibility and by taking timely decisions, has set a trend for the managers of mutual funds and the corporate sector.
NIT being the premier fund of the country in which a large investment has been made by the general public, small investors as well as institutions, was a in a bad shape a couple of years ago.
Earlier, briefing the Finance Minister about NIT's performance, NIT Chairman Tariq Iqbal Khan said that NIT has taken a lead in following best industry practices and principles of good governance and thus achieved enhanced profitability for its investors.
He said that due to enhanced profitability NIT was in a position to enhance the yield to its investors when in general yield on financial instruments was declining.
NIT Chairman said that NIT has taken on a spearheading role in the implementation of the code of corporate governance in all its investee companies, especially where the Trust has representation on the board of directors. Owing to its substantial holdings, NIT presently has representation of the boards of 180 listed companies.
Restructuring of portfolio has been carried out to maximise the yield and improve liquidity of the portfolio through active teamwork which resulted in maximum capital gains and increased NIT's participation in the stock market.
He said that major reforms were introduced in NIT with the active participation of the Board which was instrumental in overall improvement and, as a consequence, the profit increased from Rs 931 million to Rs 3,578 million during last five years.
Support to the market was extended whenever needed and IAS-39 was fully adopted. NIT is the first mutual fund to adopt the standard fully and starting trading in the futures, he added.
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