Press Release

VIS Reaffirms Entity Ratings of Adam Securities Limited

Karachi, September 30, 2022: VIS Credit Rating Company Ltd. (VIS) has reaffirmed entity ratings of Adam Securities Limited (ASL) at ‘A-/A-2’ (Single A Minus/A-Two). The long term rating of ‘A-’ reflects good credit quality; Protection factors are adequate. Risk factors may vary with possible changes in the economy. The short term rating of ‘A-2’ signifies good certainty timely payment. Liquidity factors and company fundamentals are sound. Access to capital markets is good. Risk factors are small. Previous rating action was announced on September 21, 2021.

The assigned rating incorporates ASL strong market share and sound liquidity profile. Rating also draws support from ASL’s capitalization structure, which remains adequate despite the increase in borrowings. In line with industry trend, wherein brokerage volumes have contracted, ASL also experienced a revenue contraction. However, the Company was able to partially mitigate the impact of contraction in industry volumes by capturing a higher market share. Brokerage commission remains the primary contributor to ASL’s core revenue stream, albeit the Company has posted growth in underwriting and IPO commissions.

ASL holds a sizeable proprietary book. However, majority of these exposures are hedged against future contracts, limiting the implied market risk of these holdings. Going forward, maintaining sustainable revenue streams, growth in clientele, retention of key personnel and maintenance of low leverage indicators are critical from the ratings perspective.

For further information on this rating announcement, please contact the Ms. Sara Ahmed (Ext: 207) at 021-35311861-70 or email at info@vis.com.pk.

Faryal Ahmad

Deputy CEO

Applicable Rating Criteria: Securities Firms Rating (July 2020)

https://docs.vis.com.pk/docs/SecuritiesFirm202007.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 September 30, 2022 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.