Press Release

JCR-VIS Reaffirms Entity Ratings of Taurus Securities Limited

Karachi, December 31, 2018: JCR-VIS Credit Rating Company Ltd. has reaffirmed the entity ratings of Taurus Securities Limited (TSL) at ‘A/A-2’ (Single A/A-Two). The long term rating 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 October 2, 2017.

Assigned ratings to Taurus Securities Limited (TSL) continue to derive strength from the robust profile of sponsors including National Bank of Pakistan (NBP), a state owned entity and one of the largest commercial banks in the country. The other shareholders of TSL are also financial institutions including The Bank of Khyber and Saudi-Pak Industrial and Agricultural Investment Company Ltd. However, ratings are constrained by low revenue stream on account of limited diversification, decline in profitability levels and low efficiency indicators. Leverage and liquidity levels remain at manageable levels.

While core profitability declined in FY17, the company managed to earn a positive bottom line on account of significant capital gains from sale of Pakistan Stock Exchange (PSX) shares. The company also concerted efforts in almost doubling its market share despite downtick in the stock market. Nevertheless, efficiency levels of TSL were reported above 100%. Moreover, core revenues of TSL remained lower in the first half of 2018 vis-à-vis corresponding period last year. Ability to maintain profits at sustainable levels will need to be addressed in the coming years. TSL’s focus on growing its retail customer base is ongoing; there were plans of revenue diversification which are currently kept on hold on account of the prevailing trend of the stock market. The company also benefits from a funding line from its parent.

For further information on this rating announcement, please contact the undersigned (Ext: 201) or Ms. Muniba Khan (Ext: 215) at (021)35311861-71 or fax to (021)35311872-3.


Javed Callea
Advisor

Applicable Rating Criteria: Methodology - Securities Firms Rating (June 2017)
http://www.jcrvis.com.pk/docs/Securities%20Firms%20201706.pdf

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