Press Release

VIS Assigns Initial Entity Ratings to Multiline Securities Limited

Karachi, February 12, 2021: VIS Credit Rating Company Ltd. (VIS) has assigned initial entity ratings of ‘A-/A-2’ (Single A Minus/A-Two) to Multiline Securities Limited (MSL). The 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’.

Incorporated in 2001, Multiline Securities Limited (MSL) is engaged in provision of equity brokerage services with domestic retail clients representing its primary commission source. The assigned rating takes into account MSL’s stable market share, over the years (FY18-FY20), with significant proportion (~79%) of the revenues emanating from a retail clientele. Overall financial risk profile of the entity is considered low, given the unleveraged balance sheet positioning, while liquidity risk is also low, given multiple times (>3x) liquid asset coverage of liabilities.

Nevertheless, rating is constrained by lack of diversification in top line revenue, in absence of any corporate advisory or underwriting activities. Furthermore, the exposure to market risk stands on the higher side, as proprietary portfolio is sizable, and has historically resulted in volatility in the company’s bottom line.

Overall Corporate Governance profile of the entity is considered adequate, with one-third of the Board of Directors being independent; pending an additional independent director’s approval from the regulators, independent representation is planned to be increased to half. Going forward, improvement in research infrastructure and initiation of additional lines of business will be key rating drivers for the company.

For further information on this rating announcement, please contact the undersigned (Ext: 306) or Arsal Ayub (Ext: 216) at 021-35311861-71 or fax to 021-35311872-3.







Faryal Ahmad Faheem
Deputy CEO

Applicable Rating Criteria: Broker Management Ratings 2020
https://s3-us-west-2.amazonaws.com/backupsqlvis/docs/BMR202007.pdf

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.VIS , the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report.VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2021 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .