Press Release
VIS Reaffirms Entity Ratings of MRA Securities Limited
Karachi, December 21, 2020: VIS Credit Rating Company Ltd. (VIS) has reaffirmed entity ratings of MRA Securities Limited (MRA) at ‘A-/A-2’ (Single A Minus/A-Two). 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. Previous rating action was announced on January 3, 2020.
The assigned are underpinned by company’s ability to increase revenues and profitability in prevailing environment. The ratings also incorporate cyclical nature of the brokerage industry, which depicts sensitivity to changing market volumes. Improvement in internal audit, compliance and corporate governance has been noted. However, efficiency level has weakened in FY20 due to greater growth in operating expenses vis-à-vis recurring revenues. Moreover, ratings remain constrained by company's exposure to market risk due to its proprietary book, moderate leveraged structure, sustained market share and adequate capitalization & liquidity levels. Diversification of revenue sources is needed to lower risk of volatility in earnings. The ratings are dependent on maintaining or reducing leverage, retention of key personnel and sustainability of profits. Meanwhile, upholding strong internal controls and diligent monitoring of risks is important.
For further information on this rating announcement, please contact the undersigned (Ext: 306) or Muhammad Tabish (Ext: 205) at 021-35311861-71 or fax to 021-35311872-3.
Faryal Ahmad Faheem
Deputy CEO
Applicable rating criteria: Methodology - Securities Firms Rating (June 2017)
http://vis.com.pk/kc-meth.aspx