Press Release

VIS Upgrades Entity Ratings of Foundation Securities (Pvt) Limited

Karachi, January 29, 2024: VIS Credit Rating Company Limited (‘VIS’) has upgraded entity ratings of Foundation Securities (Pvt) Limited (‘FSL’ or ‘the Company’) from ‘A-/A-2’ (‘Single A Minus/A-Two’) to ‘A/A-2 (‘Single A/A-Two’). Long-term rating of ‘A’ reflects good credit quality with adequate protection factors. Risk might fluctuate depending on the state of the economy. Short-term rating of ‘A-2’ signifies 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 October 26, 2022.

Foundation Securities Private Limited offers equity brokerage services with a limited presence in commodity segment and caters to domestic retail and institutions, high net worth individuals, and foreign broker dealers. Headquartered in Karachi, there are a total of 4 branches located in Lahore, Rawalpindi and Islamabad. FSL is registered with Securities & Exchange Commission of Pakistan (‘SECP’) and holds a Trading and Self-Clearing (‘TSC’) license and Trading Rights Entitlement Certificate (‘TREC’) granted by Pakistan Stock Exchange Limited (‘PSX’) and license of Pakistan Commodity Exchange (‘PMEX’). External auditors of the Company are Grant Thorton Anjum Rahman Chartered Accountants. External auditors belong to Category ‘A’ of State Bank of Pakistan’s approved list of auditors.

Ratings upgrade takes into account the change in sponsorship from Fauji Foundation (‘FF’) to Askari Bank Limited (‘AKBL’) after the merger with Askari Securities Limited (‘ASL’). This sponsorship with AKBL enables improved access to funding and financial support to FSL. Amalgamation of the Company with ASL has strengthened FSL’s business risk profile as well as increased its equity base. Moreover, market share and efficiency levels have depicted improvement as a result of this merger.

Ratings upgrade also incorporate the financial profile of the Company. During FY23, FSL reported losses on account of constrained brokerage revenue in line with the industry volumes. However, in 1HFY24, increased market activity spurred brokerage revenue, enhancing profitability. The Company maintains a sound liquidity profile with liquid assets providing ample coverage for total liabilities. FSL follows a conservative asset allocation strategy, with over half of its assets in cash and bank balances. With a minimal proprietary book, the Company faces limited market risk. Additionally, FSL holds no debt, resulting in zero gearing, though the leverage ratio remains elevated.

Going forward, ratings will remain sensitive to sponsor support as well as maintenance of the liquidity and capitalization profile commensurate with assigned ratings. Moreover, sustained improvement in efficiency metrics together with the earning profile in line with assigned ratings will also remain important considerations for future reviews.

For further information on this ratings announcement, please contact Saeb Muhammad Jafri at 021-35311861-64 (Ext. 202) and/or the undersigned at 021-35311861-64 (Ext. 201) or email at

Javed Callea

Applicable Rating Criteria: Securities Firms:
VIS Issue/Issuer Rating Scale

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