VIS Reaffirms Broker Management Rating for Insight Securities at ‘BMR2’

Karachi, The VIS Credit Rating Company Ltd. (VIS) has reaffirmed the Broker Management Rating of Insight Securities (Private) Limited at 'BMR2', maintaining a stable outlook. This rating, last updated in November 2022, reflects the firm's strong compliance, risk management capabilities, and robust external control systems.

According to VIS Credit Rating Company Limited, Insight Securities, which was established in 2006, operates out of Karachi, offering both online and assisted trading services. The firm caters to local retail and institutional clients in the ready and future market, holding a Trading Rights Entitlement Certificate from the Pakistan Stock Exchange Limited. Its external auditors, M/s Grant Thornton Anjum Rehman Chartered Accountants, are listed in category 'A' by the State Bank of Pakistan.

The assigned rating acknowledges Insight Securities' effective risk and compliance framework, although suggestions for establishing a separate risk management function were noted to potentially enhance its effectiveness. The company is also advised to consider including certified and independent members on its board to strengthen oversight and support the formation of additional board-level committees.

The financial profile of Insight Securities is deemed adequate despite a weakening operating profile due to a slowdown in trading activity, leading to reduced core brokerage revenue. Although operational efficiency declined, it showed slight improvements by the end of the fiscal year 2024. The company’s liquidity remains robust, but market risk is elevated. Strong capitalization indicators have been maintained, and continued improvements in the revenue base, along with maintaining capitalization and liquidity levels, are crucial for future ratings.