Press Release
JCR-VIS revises Outlook on the rating of Taurus Securities Limited to Stable
Karachi, January 4, 2010: JCR-VIS Credit Rating Company Ltd. has maintained the entity ratings of Taurus Securities Limited (TSL) at ‘A-/A-2’ (Single A Minus/A-Two). Outlook on the rating has been revised from ‘Negative’ to ‘Stable’.
The rating action incorporates TSL’s focus on cost control that allowed the company to tide over the period of stock market turmoil in second half of 2008 while continuing to post profitable results despite drastic decline in market volumes. The company has also been able to insulate itself from investment losses on account of its policy of not maintaining a proprietary equity portfolio. While stock market activity recovered in 2009, brokerage commission income has still remained subdued during the period resulting in low profitability. Brokerage commission is still the major contributor to profitability followed by income on bank deposits and fund placements, though its proportion in the revenue mix has declined over the last few years.
The rating also incorporates the implicit support of majority shareholder, National Bank of Pakistan (NBP), in terms of credit lines sanctioned to the company during a period when a number of banks froze sanctioned credit lines to the brokerage sector. JCR-VIS will continue to monitor the company’s performance, which is still closely linked to stock market activity.
For further information on this rating announcement, please contact Mr. Safdar Kazi (Ext: 501) or Mr. Zia Usmani (Ext: 507) at 35311861-71 or fax to 35311872-3.
Faheem Ahmad
President & CEO