Press Release

VIS Maintains Entity Ratings of Intermarket Securities Limited

Karachi, January 03, 2023: VIS Credit Rating Company Ltd. (VIS) has maintained the entity ratings of Intermarket Securities (‘IMS’ or ‘the Company’) at ‘A-/A-2’ (A minus/A-Two). The long-term rating of ‘A-’ signifies good credit quality; protection factors are adequate meanwhile risk factors may vary with possible changes in the economy. The short-term rating of ‘A-2’ signifies good certainty of timely payment with sound liquidity and company fundamentals. Access to capital markets is good along with small risk factors. Outlook on the assigned ratings has been revised from ‘Positive’ to ‘Stable’. Previous rating action was announced on November 17, 2021.

The revision in outlook takes into account adverse industry trend, wherein a contraction in trading volumes has been reported, which also affected trading revenues of IMS. Equity brokerage remained the major contributor in the Company’s operating revenue and the relative lack of diversification in the Company’s revenue poses higher business risk vis-à-vis peers with diversified revenue sources. Accordingly, IMS’ profitability has depicted volatility over the years, moving in tandem with stock market volumes. As a result, RoAE is volatile, improving over the two year period (FY20-21) before falling notably in FY22 and Q1’FY23 respectively.

The rating is supported by IMS’s market positioning, holding a market share of ~4%, in terms of ready share volumes. IMS’s liquidity risk profile is supported by adequate coverage of liabilities by liquid assets on the balance sheet which stood at 112.1% as of Sep’22. Exposure to market risk has trended up on a timeline, with proprietary portfolio increasing notably to 26.6% of the Company’s equity base. Given the contraction in equity, on account of losses incurred, and the addition of loan, the Company now has a gearing ratio of 0.16x. As per management, the short term loan is likely to remain in place over the short to medium term horizon. The assigned ratings remains dependent on the maintenance of business and financial risk metrics in line with threshold for the assigned rating.

For further information on this rating announcement, please contact Mr. Arsal Ayub CFA (Ext. 215), or the undersigned (Ext. 207) at 021-35311861-70 or email at

Sara Ahmed

VIS Entity Rating Criteria Methodology – Securities Firms Rating (July 2020)

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