Press Release
VIS Reaffirms Entity Ratings of AKD Securities Limited
Karachi, June 21, 2024: VIS Credit Rating Company Ltd. (VIS) has reaffirmed entity ratings of AKD Securities Limited at ‘AA-/A-1’ (Double A Minus/A-One). Rating of ‘AA-’ reflects high credit quality, strong protection factors, and moderate risk but may vary slightly because of economic conditions. Short Term Rating of ‘A-1’ indicates high certainty of timely payment, excellent liquidity factors supported by good fundamental protection factors and minor risk factors. Outlook on the assigned ratings is ‘Stable’. Previous rating action was announced on December 7, 2022.
AKD Securities Limited is a listed company principally engaged in the brokerage services of equity and commodities to retail and institutional clients and also licensed to operate as a consultant to issue and underwriter. The Company holds a Trading Right Entitlement Certificate (TREC) for Trading & Self Clearing services issued by the Pakistan Stock Exchange Limited (PSX). The Company serves a diverse clientele, including domestic and international retail investors, high net worth individuals, and domestic and international institutions. External auditors of the Company are RSM Avais Hyder Liaquat Nauman Chartered Accountants. External auditors are from Category ‘A’ of State Bank of Pakistan’s list of auditors.
Assigned ratings reflect improved AKD Securities' market position with an expanded branch network and client base. The Company's long-standing experience in equity brokerage, strong sponsor profile, and sizeable retail clientele support its competitive position. Ratings also factor in technology enhancements, launching a new online application to improve client experiences and expand its client base. Improvements in revenue diversification over time have also been noted. The Company however remains exposed to high business risk associated with the brokerage industry. After a prolonged period of subdued market activity, volumes have picked up in FY2024.
Assessment of financial profile reflects improvement in profitability profile, which is largely due to improvement in brokerage revenues and profit on bank deposits. Liquidity profile of the Company is considered adequate. Capitalization metrics are supported by a large equity base. Going forward, enhancement in advisory income, improvement in cost to income ratio and liquidity profile will remain important for ratings.
For further information on this ratings announcement, please contact at 021-35311861-64 or email at info@vis.com.pk.
Applicable Rating Criteria: Securities Firms:
https://docs.vis.com.pk/docs/SecuritiesFirm202007.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf