Lahore, September 07, 2021 (PPI-OT):The Broker Management Rating of AL Habib Capital Markets (Pvt.) Limited (“AHCML” or “The Company”) reflects the Company’s association with a well-established bank which is one of the dominant players in the banking sector industry. The rating incorporates the Company’s strong sponsor support, sound governance framework, seasoned management team, and well established compliance protocols. The Company has well developed organizational structure to manage its operations and implemented appropriate policies to protect the client’s interest.
The Company has established rigorous protocols regarding risk assessment by implementing KYC, CDD, AML and CFT which bodes well for the rating. The IT infrastructure allows full integration of the front and back office functions, allowing generation of real time reports. The Company has an in-house internal audit department, which monitors implementation of the policies and procedures of AHCML. Audit Committee further ensures an effective control environment.
The topline of the Company, commensurate with trading volumes of stock exchange index, reflected an upturn and rose by 1.3times YoY. The average traded volumes during CY20 registered an upward trajectory and improved by ~95% to ~209mln shares (CY19: ~107mln) depicting an increased participation in the equity market led by increasing investor confidence in the country’s economic rebound and the global COVID-19 vaccine rollout.
The Company successfully managed to maintain its market share to average ~2.5%. Due to low leveraging, capitalization indicators are considered strong. The Company has proprietary investments, hence exposed to some market risk. The Net Capital Balance of the Company clocked in at ~PKR 240mln with an equity base of ~PKR 347mln at-end CY20. The topline of the Company is concentrated in the equity brokerage income. The bottom-line of the Company also improved to ~PKR 30mln during CY20 (CY19: ~PKR -11mln).
The ratings are dependent on the management’s ability to retain its market share and diversification of revenue to improve its competitive position in the brokerage industry. Retention of key personnel, adherence to regulatory requirements, and sustainability of profitability will remain imperative from ratings perspective.
For more information, contact:
Analyst,
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore, Pakistan
Tel: +92-42-5869504-6
Fax: +92-42-5830425
Email: hammad.rashid@pacra.com
Website: www.pacra.com