Press Release

VIS Upgrades Broker Fiduciary Rating of BMA Capital Management Limited

Karachi, November 8, 2024: VIS Credit Rating Company Ltd. (VIS) has upgraded the Broker Fiduciary Rating of BMA Capital Management Limited (‘BMA’ or ‘the Company’) from ‘BFR3++’ to ‘BFR2’. Outlook on the assigned rating is Stable. Rating of BFR2 denotes strong fiduciary standards. Last rating action was announced on September 27, 2023.

The rating signifies strong management & client services, internal controls, as well as sound ownership & governance while business & financial sustainability is considered adequate.

BMA, with three decades of experience, has been engaged in the provision of equity brokerage services with presence in commodities, fixed income and forex segments. Additionally, economic research and corporate financial advisory are other value-added services offered by the Company. Headquartered in Karachi, the brokerage house has a nation-wide network of total 20 branches. The Company holds a Trading Right Entitlement Certificate (‘TREC’) for Trading & Self Clearing Services issued by the Pakistan Stock Exchange Limited (‘PSX’). External auditors of the Company are RSM Avais Hyder Liaquat Nauman Chartered Accountants. Auditors are on the approved list of auditors published by the State Bank of Pakistan (‘SBP’).

Assigned rating incorporate the ownership and governance profile of BMA, supported by a strong sponsor profile. However, the governance structure has gaps that require improvement, and the Company may consider expanding its board size by incorporating independent certified directors and enhancing disclosure levels through the inclusion of a CEO statement. This will also help avoid repetition of members across committees. Rating further incorporate the Company's management strength and client services, supported by a broad geographical presence, client facilitation tools, and available research resources. Contingency arrangements are noted as adequate. Internal controls and regulatory compliance are considered well-structured; however, increasing the frequency of reviews and documentation of the internal control system, alongside broadening the scope of internal policies, may further strengthen this framework.

Assigned rating also take into account BMA's financial profile, characterized by a return to profitability driven by increased brokerage revenue. Operational efficiency has seen an improvement, though it remains elevated. The liquidity profile is considered adequate, supported by the ratio of liquid assets to total liabilities. Market risk is managed within an acceptable range, with investments in relation to equity maintained at controlled levels. The gearing ratio is adequate, though leverage remains elevated. The company’s equity base has grown in alignment with higher profitability, supporting its capitalization profile.

Going forward, diversifying revenue streams along with improving operational efficiency, liquidity profile, gearing and leverage indicators will remain important for rating.

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









Applicable Rating Criteria: Broker Fiduciary Ratings:
https://docs.vis.com.pk/Methodologies%202024/Broker-Fiduciary-Rating.pdf
VIS Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.VIS , the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report.VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2024 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .