Karachi: VIS Credit Rating Company Limited (VIS) has reaffirmed AKIK Capital (Pvt) Ltd’s Broker Fiduciary Rating at ‘BFR3’ with a stable outlook, indicating the brokerage maintains good fiduciary standards as of August 16, 2024. This evaluation follows a previous assessment done on August 01, 2023.

According to VIS Credit Rating Company Limited, the reaffirmed rating reflects AKIK Capital’s sound internal controls, regulatory compliance, and overall adequate management and governance structures. The brokerage, based in Karachi, specializes in share brokerage services primarily for domestic institutional and retail clients, providing both assisted and online trading options.

The rating takes into account AKIK Capital’s governance framework, suggesting potential enhancements such as increasing the size of its board, adding independent directors, and establishing additional board committees. Additionally, improvements in client services are recommended, such as providing online customer reports and prompt trade alerts to enhance user experience and operational transparency.

Financially, AKIK Capital has seen a recovery in its operating revenue due to increased brokerage activities, which also improved its cost to income ratio, though it remains elevated. Despite facing higher market risks due to significant short-term investments, the company’s liquidity is bolstered by adequate coverage of liabilities with liquid assets. Its capitalization benefits from negligible gearing and low leverage levels.

Looking ahead, VIS notes that diversifying the revenue streams, improving operational efficiencies, and reducing market risks are crucial for sustaining and possibly improving AKIK Capital’s rating in future assessments.