Press Release

VIS Upgrades Broker Management Rating of Topline Securities Limited

Karachi, March 21, 2024: VIS Credit Rating Company has upgraded the Broker Management Rating of Topline Securities Limited (‘TSL’ or ‘the Company’) from BMR2+ to BMR2++. Outlook on the assigned rating is ‘Stable’. Previous rating action was announced on October 12, 2022.

The rating signifies strong HR and infrastructure, external control framework, while internal control framework, client relationship, financial management, compliance and risk management and regulatory and supervisory framework are considered sound.

Topline Securities Limited (TSL), holding a trading and self-clearing licence, is engaged in the business of stock brokerage, commodity brokerage, underwriting, consultancy, book bidding, and advisory services. Shareholding of the Company is primarily vested with Mr. Mohammad Sohail, who also serves as the CEO of the Company. The Company provides both online and assisted trading services to local and foreign clients. TSL is a public unlisted company holding Trading Rights Entitlement Certificate (TREC) granted by Pakistan Stock Exchange Limited (PSX) as well as membership in Pakistan Mercantile Exchange Limited (PMEX). External auditors of the company are M/s Naveed Zafar Ashfaq Jaffery & Co. – Chartered Accountants, which are “A” rated on the SBP’s panel of auditors.

Assigned rating incorporates improvement in the board composition wherein number of independent directors have increased from one to two, reflecting positively on the Company’s regulatory framework. In addition, functioning of board committees also provide support to the Company’s governance framework. Internal control framework of the Company is considered sound. Enhancement in the scope of Employee Trading Policy (ETP) has been noted positively. Sound disclosure levels of the Company provides impetus to the Company’s external control framework. Management and client services are also considered sound, with various client facilitation tools and resources employed by the Company to support clients in executing transactions. Availability of research reports on various social media platforms bode well for the Company’s client services. HR & IT infrastructure of the Company is considered strong, with fully integrated ERP system in place while compliance and risk management framework of the Company is considered sound.

Assessment of the Company’s financial profile reflects a rebound in the earning profile during 6MFY24 on the back of a resurgence in trading activity during that period. The Company’s operational efficiency is considered manageable while market risk remains muted as investments are largely in money market funds. Liquidity profile of the Company draws support from its liquid assets, providing sufficient coverage against its current liabilities. Capitalization indicators of the Company are characterized by low gearing ratio while leverage is increased at moderate levels. Going forward, growth in revenue as well as improvement in efficiency levels along with maintenance of capitalization and liquidity profile will remain important for the rating.

For further information on this rating announcement, please contact at 021-35311861-64 or email at info@vis.com.pk.


Applicable Rating Criteria: Broker Management Ratings:
https://docs.vis.com.pk/docs/BMR202007.pdf
VIS Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf

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