Press Release

VIS Assigns Initial Broker Fiduciary Rating to Growth Securities (Pvt) Limited

Karachi, Aug 23, 2024: VIS Credit Rating Company Ltd. (VIS) has assigned initial Broker Fiduciary Rating of BFR3+ to Growth Securities (Pvt) Limited. Rating of ‘BFR3+’ denotes good fiduciary standards. Outlook on the assigned rating is ‘Stable’.

The rating signifies sound business & financial sustainability, adequate ownership & governance, management & client services and internal controls & regulatory framework.

Growth Securities (Pvt.) Limited (‘GSPL’ or ‘the Company’) was incorporated in 2005, under the Companies Act 2017. The Company is engaged in ready-future arbitrage trading and provision of equity brokerage services to domestic clients. GSPL is registered with Securities & Exchange Commission of Pakistan and holds Trading Rights Entitlement Certificate (TREC) issued by Pakistan Stock Exchange Limited (PSX) for Trading and Self-Clearing Services. External auditors of the company are Baker Tilly Mehmood Idrees Qamar, Chartered Accountants. Auditors are on the approved list of auditors published by the State Bank of Pakistan (SBP).

Assigned rating incorporates sound disclosure levels, however room for improvement exists in ownership and governance framework. Enhancement in governance framework may be achieved by increasing the board size along with inclusion of independent and certified directors. Management & client services of the Company are considered adequate. Enhancing the research function and client facilitation services, together with geographical diversification may increase customer satisfaction and reach. Contingency measures of the Company may be strengthened through outsourcing off-site backups at a third party warehouse as well as enhancing the disaster recovery and business continuity exercises. Assigned rating also takes note of internal controls & regulatory compliance. Expanding the scope of existing policies, such as the conflict of interest and employee trading policies, may further strengthen the internal control framework. The trade review procedures are currently under development, and their implementation may also enhance the Company's internal controls.

Assessment of the financial profile of the Company reflects improvement in the Company’s profitability, driven by healthy growth in income from ready-future business and brokerage commission, supported by higher market activity due to positive investor sentiment. Resultantly, operational efficiency witnessed notable improvement, albeit remains higher. Market risk of the Company stands at a moderate level. Moreover, liquidity and capitalization profile of the Company is considered sound, supported by higher quantum of liquid assets and an unleveraged balance sheet. The Company also draws support from sponsor loan. Continued availability of the same will remain important from a rating perspective. Additionally, increase in the revenue stream along with management of market risk as well as maintenance of liquidity and capitalization profile of the Company will remain important for rating.

For further information on this rating, please 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 .