Press Release
VIS Assigns Initial Broker Fiduciary Rating to Pearl Securities Limited
Karachi, January 16, 2025: VIS Credit Rating Company Ltd. (VIS) has assigned initial Broker Fiduciary Rating of ‘BFR3’ to Pearl Securities Limited. Rating of ‘BFR3’ denotes good fiduciary standards. Outlook on the assigned rating is ‘Stable’.
The rating signifies adequate business & financial stability while management & client services, internal controls & regulatory compliance and ownership & governance framework are considered sound.
Incorporated in 2000, Pearl Securities Limited (PSL) is engaged in provision of equity, commodities, money market & interbank foreign exchange brokerage services. Majority shareholding of the Company is vested with Government of Khyber Pakhtunkhwa-GPl Fund and Ms. Fatima Usman. Presently, the Company operates through its head office based in Karachi and six branches in the provinces of Sindh, Punjab and KP. The Company holds a Trading Right Entitlement Certificate (TREC) from PSX for Trading and Self-Clearing Services and a member of Pakistan Mercantile Exchange Limited (PMEX). External auditors of the Company are M/s Crowe Hussain Chaudhry & Co. Chartered Accountants. Auditors belong to category ‘A’ on the approved list of auditors published by the State Bank of Pakistan (SBP).
The assigned rating reflects the Company's ownership and governance framework, underpinned by the strong sponsor profile, with the Government of KPK GPI Fund holding the majority shareholding. The board comprises five directors, including two government nominees, which positively contributes to the governance structure. However, increasing the size of board committees and avoiding overlap in committee memberships could further improve governance. While the Company has implemented management and client facilitation tools, enhancing the investor grievance process could improve the overall customer experience. Additionally, the effectiveness of business continuity measures could be bolstered by increasing the frequency of disaster recovery drills. The scope of Company’s internal controls and policies including regulatory compliance scope may be enhanced and widely disseminated for strengthening of internal control framework. Similarly, establishing an independent risk management department may enhance the overall control environment.
The assessment of financial profile reflects profitability challenges resulting from elevated finance costs despite relatively favorable operational efficiency. Additionally, the Company has a heightened exposure to market risk. The capitalization profile with higher gearing and leverage levels contributes to a constrained financial position. Looking ahead, deleveraging the balance sheet, strengthening the liquidity profile, and effectively managing market risk will be critical for business and financial sustainability.
For further information on this rating, please contact at 021-35311861-64 or email at info@vis.com.pk.
Applicable Rating Criteria: Broker Fiduciary Ratings:
https://docs.vis.com.pk/Methodologies%202024/Broker-Fiduciary-Rating.pdf
VIS Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf