Karachi, February 10, 2023 (PPI-OT):VIS Credit Rating Company Limited. Has assigned Broker Fiduciary Rating of ‘BFR2++’ to AKD Securities Limited, post-merger of AKD Securities Limited with and into Bank Islami Pakistan Limited Securities (BIPLS) and subsequent name change to AKD Securities. Outlook on the assigned rating is ‘Stable’. The assigned rating denotes strong fiduciary standards. Outlook on the assigned rating is ‘Stable’. Previous rating action was announced on August 3, 2022. The rating signifies strong regulatory compliance, client ownership and governance, management and client services and business and financial sustainability while internal controls are sound.
Listed on the Stock Exchange, AKD Securities Limited (formerly BIPL Securities Limited) is licensed to operate as securities broker, consultant to the issue, and underwriter from the Securities Exchange Commission of Pakistan and holds a Trading Right Entitlement Certificate (TREC) of Pakistan Stock Exchange Limited and Membership card of Pakistan Mercantile Exchange Limited. The principal activities of the Company are brokerage of shares and/or commodities/ money market / forex trading, financial research, book building, underwriting, investments in securities/commodities, corporate advisory and consultancy services.
On 03 June 2022, under a Scheme of Arrangement approved by the High Court of Sindh, effective July 1, 2022, the entire undertaking of AKD Securities Limited, a public unlisted company in Pakistan with AKDSL was merged with and into the BIPL Securities Limited, a listed brokerage Company, and the entire business of AKDSL including its properties, assets, liabilities and rights and obligations vested into the Company. Upon sanction of the Merger Scheme, the name of the Company has been changed to AKD Securities Limited on 22 July 2022.
Assigned rating takes note of AKDSL’s improved market position and increase in market share post-merger with BIPLS. The rating also takes into account the strong governance framework and increase in board size. Board of directors consists of seven members including two independent directors. Management and client services are considered strong with initiatives underway to enhance the same. Company’s customer base has witnessed significant boost as geographical footprint has expanded over 10 cities in Pakistan. Being a listed entity, compliance with corporate governance framework is sound.
The rating also takes note of strong financial profile and improved market position of the Company, however during FY22, the Company’s earning profile witnessed deterioration on the back of subdued market activity subsequently resulting in a higher cost-to-income ratio and negative bottom-line. Market risk continues to remain elevated on account of sizeable proprietary. Liquidity profile is adequate, while gearing and leverage also remain manageable. Despite challenging market conditions, strong market position of the post-merger entity provides support to business and financial sustainability of the Company. Improvement in earning profile and efficiency levels while managing market risk exposure and liquidity metrics will remain important for rating.
AKDSL is registered with Securities and Exchange Commission of Pakistan (SECP) and holds a Trading and Self-Clearing (TSC) license and Trading Rights Entitlement Certificate (TREC) granted by Pakistan Stock Exchange Limited (PSX). Moreover, the company also holds underwriting and corporate advisory licenses. External auditors of the company are RSM Owais Hyder Liaquat Nauman Chartered Accountants. External auditors from Category ‘A’ of State Bank of Pakistan’s list of auditors.
For more information, contact:
Director Compliance and Rating Analytics,
VIS Credit Rating Company Limited
VIS House, 128/C, 25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi, Pakistan
Tel: +92-21-35311861-72
Fax: +92-21-35311873
Email: bilal@jcrvis.com.pk
Website: https://www.vis.com.pk/