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National Investment Trust (NIT)

National Investment Trust (NIT)






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    National Investment Trust (NIT) National Investment Trust (NIT) Presentation Transcript

    • Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-1
    • “Contents Of The Presentation” • Investment Trust • Mutual Funds • History of NIT • Introduction of NIT • Objectives • NIT Returns • NIT Mission and Vision • Edge on Competitors Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-2
    • Investment Trusts • Investment Trusts are essentially companies (not technically trusts) which have been set up to invest in the shares of other companies. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-3
    • Investment Trusts • Their value therefore represents the assets in which they are invested rather than the company's own property, personnel or ideas Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-4
    • Investment Trusts • . They are designed to give individual investors the opportunity to invest in wider range of companies, and at a lower cost, than they would be able to achieve on their own. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-5
    • Investment Trusts • Investment Trust work as vehicle • Board of directors • Fund manager (professional to invest) Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-6
    • Investment Trusts Types • Split Capital Investment Trust • Real Estate Investment Trusts (REITs) Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-7
    • Investment Trusts History • The Foreign & Colonial Investment Trust, • Created in 1868 by the founder of the Royal Brompton Hospital Philip Rose. • It initially invested in Government Bonds • Started investing in equities (company shares) in 1925, Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-8
    • Mutual Funds  Mutual Funds are a pool of money invested by small, medium & large Investors .  Simply put, a mutual fund is a type of investment. You can think of it as a group of people with similar goals who, instead of investing on their own, pool their money. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-9
    • Mutual Funds • They hire a professional manager to invest that money in securities, such as stocks, bonds, and money market instruments. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-10
    • Types of Mutual Funds • Open Ended Funds • Close Ended Funds Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-11
    • Open Ended Funds  A type of mutual fund, where there are no restrictions on the amount of shares the fund will issue.  If demand is high enough, the fund will continue to issue shares no matter how many investors there are.  Open-end funds also buy back shares when investors wish to sell. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-12
    • Close Ended Funds  Closed End Funds have a predetermined and fixed number of shares outstanding.  Closed-end funds behave more like stocks because they trade on an exchange Market  Price is determined by market demand after an initial public offering (IPO) process. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-13
    • History of NIT • The mutual fund industry was introduced in Pakistan by the Government in the form of National Investment Trust (NIT) it was constituted under the trust deed dated 12th November 1962. • Executed between the National Investment Trust Ltd (NITL) as the Management Company and the National Bank of Pakistan as the Trustee.
    • History of NIT • Mutual Funds in Pakistan are running under the Non-Banking Finance Companies (NBFC) Act 2003 and regulated by Securities and Exchange Commission of Pakistan (SECP).
    • Introduction • The principal activity of the company is to manage an open end mutual fund • The fund is the largest open-end mutual fund in Pakistan, with investments in approximately 600 of the 706 listed Pakistani Companies. 8-16
    • Introduction • NIT's portfolio has over 90 percent correlation with the Karachi Stock Exchange • NIT is valued at approximately Rs. 81 billion. • The fund has a 93% weighting in equities and 7% weighting in fixed income securities
    • Objectives • NIT's objective is to provide its Unit-holders with a balance between their regular income needs and long-term capital appreciation. • The core objective of NIT is to maximize returns for Unit holders, provide a regular stream of current income through dividends,
    • Objectives Of NIT • NIT has approximately 62,000 unit holders and over 23 branches and 2 booths across Pakistan.
    • NIT strategic holdings • The fund has also significant strategic holdings in some of Pakistan's best- managed companies. • e.g. Pakistan State Oil, Sui Northern, Sui Southern, Karachi Electric Supply Corporation, Pakistan Tele Communication Limited etc. These companies comprise the backbone of Pakistan's economy
    • NIT Restructuring program • In 1998, NITL embarked on a major restructuring program, which included induction of senior professional management and modern asset management techniques..
    • NIT Restructuring program • The other major step taken by the company includes its proactive role in corporate governance. • Each investment decision is made within guidelines provided by NITL's investment committee.
    • NIT Restructuring program • The objective of the team - management approach is to safeguard the fund from over reliance on any individual and to ensure transparency and rigorous evaluation of investment decisions
    • NIT Returns/Profits • Nit mainly invests in listed equities • The return from investment in stock market comprise of two components • 1) capital gain/loss resulting from appreciation/drop in stock price and • 2) dividend paid by companies to their shareholders.
    • NIT Mission • We are active and resourceful in developing proactive investment strategies for our shareholders • We are committed to understanding our shareholders' needs to generate the potential for the most profitable returns • We are confident in our abilities, proud of what we do.
    • Mission statement Components • Customer: • Philosophy: • Concern for employees • Self concept: • Concern for survival, growth, and profitability: • Technology:
    • Vision Statement • We are collaborative, working together as an efficient, dynamic team. Individually, each member is a skilled practitioner. • As a result, we stand apart from the rest in the real estate investment field
    • About NIT Unit • Units are issued in the form of physical Unit certificates • NIT Units are issued in the name of the investor against the Investment. • Unit holders • NIT Units can be purchased/redeemed from 1.NIT Branches 2.Authorized Banks
    • Edge on competitors • Corporate Governance • Management • Trustee
    • Corporate Governance • The effective governance is done by Board of Directors • Monitored by the nominees • Which create a conducive environment for improved governance in the investor companies.
    • Corporate Governance • Directors needs continuous reinforcement of training and enhanced awareness levels • NIT organized a number of workshops/seminars to debate and discuss issues regarding investor companies and changing environment.
    • Management • The Board of Directors of NITL representing shareholders are mainly from 1.Leading Financial Institutions 2.Govt. representatives The company has been assigned an asset manager rating of "AM2-" by Pakistan Credit Rating Agency (PACRA).
    • Trustee - National Bank of Pakistan • National Bank of Pakistan, Pakistan's premier bank determined to set higher standards of achievements. • It is the major business partner for the Government of Pakistan with a special effect on Pakistan's economic growth.
    • Why invest through NIT? • Professional Management • Diversification • Convenience
    • Thanks For Your Time
    • QUES . . . .??????