Press Release

VIS Reaffirms Broker Fiduciary Rating of Muhammad Munir Muhammad Ahmed Khanani Securities Limited

Karachi, May 16, 2024: VIS Credit Rating Company Ltd. (VIS) has reaffirmed the Broker Fiduciary Rating of Muhammad Munir Muhammad Ahmed Khanani Securities Limited at ‘BFR2’. Outlook on the assigned rating is ‘Stable’. Last rating action was announced on November 15, 2023.

The rating signifies sound internal controls, financial sustainability, client services and sound ownership and governance framework.

Mohammad Munir Muhammad Ahmed Khanani Securities Limited is a public unlisted company, providing equity and commodity brokerage services and research to institutional as well as retail clients. Major shareholding of the company is vested with Mr. Muhammad Munir Khanani, who serves as the Chief Executive Officer (CEO) of the company. The company provides both online and assisted trading services to its clients, and has offices in Karachi, Sahiwal, Lahore, Hyderabad and Islamabad.

Mohammad Munir Muhammad Ahmed Khanani Securities Limited is a public unlisted company holding Trading Rights Entitlement Certificate (TREC) granted by Pakistan Stock Exchange Limited (PSX), registered with SECP to provide Trading & Self Clearing Services. External auditors of the company are Rehman Sarfaraz Rahim Iqbal Rafiq Chartered Accountants. External auditors belong to category ‘A’ on the approved list of auditors published by the State Bank of Pakistan (SBP).

Reaffirmation of rating takes note of Company’s sound ownership and governance levels, the Company’s board comprises of five members along with independent representation. Disclosure levels remain adequate, inclusion of director’s report, CEO statement and statement of compliance with code to the Company’s annual financial statements may be considered in order to strengthen disclosure levels. Overall management and client servicing procedures are considered sound. The Company has a strong geographical footprint. At present the Company has a total of 19 branches nationwide which cater to its diverse client base. Availability of web based trading resources and investor grievance procedures also stand improved. Overall internal control framework and regulatory compliance levels continue to remain sound.

The Company’s overall business and financial indicators are considered sound, in tandem with industry, the Company’s operating profile remained under stress on account of low market activity during FY23. However, capital gain on investments along with unrealized gain on re-measurement of investments provided support to profitability. Cost-to-income ratio of the Company also witnessed an increase on account of decline in core brokerage income and higher administrative expenses. Liquidity profile remains adequate however, capitalization indicators slightly deteriorated. Gearing stood at 0.61x (FY23 0.25x) while leverage stood at 1.37x (FY23 0.56x) on account of increase in short term borrowings end-HFY24. Market risk is considered high on given Company’s active participation in proprietary trading. Overall business and financial sustainability of the Company is considered sound. Going forward, improvement in the Company’s earning profile along with cost-to-income ratio, improvement of capitalization indicators and low market risk will remain important for the 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 .