Press Release
VIS Assigns Initial Entity Ratings to Mohammad Munir Mohammad Ahmed Khanani Securities
Karachi, May 07, 2020: VIS Credit Rating Company Ltd. (VIS) has assigned initial entity ratings of ‘A-/A-2’ (Single A Minus/A-Two) to Mohammad Munir Mohammad Ahmad Khanani Securities (MMMAKS). 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.
MMMAKS is principally engaged in provision of equity brokerage services to clients. The company’s status was changed from private limited company to public unlisted entity in January 2020. Currently, the brokerage house operates through its head office based in Karachi and 12 branch offices in different locations.
The assigned ratings incorporate company’s adequate market share, moderately leveraged capital structure, satisfactory operating profitability, and adequate liquidity indicators. Ratings also reflect presence of experienced management at helm, and satisfactory risk management and internal control framework. Improvement has been observed in the governance framework recently with induction of independent directors and formation of Board level committee but the same depicts further room for improvement as the position of the CEO and Chairman of the Board are held by a single resource. The assigned ratings also take into account the company’s considerable exposure to market risk due to the size of its proprietary book. Further diversification in revenue sources can be undertaken to lower risk of volatility in earnings.
The ratings are dependent on improvement in leverage indicators, retention of key personnel, and sustainability of operating profitability and market share. Meanwhile, upholding strong internal controls and diligent monitoring of risks is also important from ratings perspective.
For further information on this rating announcement, please contact Mr. Narendar Shankar Lal (Ext: 203) or the undersigned (Ext. 306) at 021-35311861-70 or email at info@vis.com.pk.
Faryal Ahmad Faheem
Deputy CEO
Applicable Rating Criteria: Securities Firms Rating (May 2017)
https://s3-us-west-2.amazonaws.com/backupsqlvis/docs/Securities%20Firms%20201706.pdf