Karachi, August 17, 2021 (PPI-OT):VIS Credit Rating Company Ltd. (VIS) has reaffirmed the entity ratings of Mohammad Munir Mohammad Ahmad Khanani Securities at ‘A-/A-2’ (Single A Minus/A-Two). Long term rating of ‘A-’ signifies good credit quality with adequate protection factors. Risk may vary slightly from time to time because of economic conditions. Short term rating of ‘A-2’ depicts good certainty of timely payment where liquidity factors are sound and good access to capital markets. Outlook on the assigned ratings is ‘Stable’. Previous rating action was announced on May 07, 2020.
Reaffirmation of ratings takes into account the significant improvement in market share, strong growth in core brokerage income and sizeable capital gains supporting the profitability profile. Ratings also incorporate sound liquidity profile and strong capitalization as reflected by sizeable equity base. Leverage indicators have trended upwards in line with the increase in business volumes.
Rating constraints include increasing market risk on proprietary book and burgeoning trade debts impacting the risk profile of the company. Corporate governance framework is considered adequate; however, room for improvement exist in terms of segregating the position of CEO from Chairman of the Board.
Revenue concentration in equity brokerage continues with some diversification into underwriting during the review period. Going forward, the management plans to remain focused towards revenue diversification and increasing retail penetration through branch network expansion and leveraging digital platforms. Since last review, 5-6 branches have been added (mainly in Peshawar, Sahiwal, Karachi and Islamabad) while further addition of 2 new branches is planned in the ongoing fiscal year.
IT system has been revamped which mainly included the up gradation of trading portal, mobile application and web-based portal. Ratings are sensitive to the inherent market risk and the volatility in the stock market given the sizeable proportion of the investment in proprietary book.
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/