Press Release

VIS Reaffirms Broker Fiduciary Rating of Standard Capital Securities (Private) Limited

Karachi, May 22, 2024: VIS Credit Rating Company Ltd. (VIS) has reaffirmed the Broker Fiduciary Rating of Standard Capital Securities (Private) Limited at ‘BFR3’. Outlook on the assigned rating is ‘Stable’. Last rating action was announced on September 29, 2022.

The rating signifies sound client management services, internal controls and risk management, while ownership and governance and business and financial sustainability are considered adequate.

Standard Capital Securities (Private) Limited was incorporated in 1998, providing full scale equity brokerage services to institutional as well as individual clients. Shareholding of the Company is vested with members of the Chamdia family including the Chief Executive Mr. Naushad Chamdia. The Company has three offices in Karachi and one in Sialkot. SCS provides both online and assisted trading services to its clients.

SCSPL is a private limited company holding Trading Rights Entitlement Certificate (TREC) granted by Pakistan Stock Exchange Limited (PSX), and is registered with SECP to provide Trading & Self-Clearing Services. External auditors of the Company are Kreston Hyder Bhimji & Co 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 into account sound internal controls and client management services. Well-defined policies along with measures ensuring client’s confidentiality are also implemented. However, scope of internal policies may be enhanced in order to further strengthen the control framework. Overall, management and client services are considered sound. Implementation of a fully integrated ERP platform may be considered to enhance operational efficiency. Rating also incorporates adequate ownership and governance levels on account of limited board size of only two members. Inclusion of independent and certified directors may improve its governance structure. Increasing scope of disclosures with addition of director’s report, CEO’s statement, and statement of compliance code may also be considered to improve overall disclosure levels.

The Company’s overall business and financial indicators are considered adequate, During FY23, the Company’s earning profile came under stress owing to subdued market activity and decline in core brokerage income. However, end-HFY24, capital gain and gain on re-measurement of investments supported profitability. The Company’s cost to income ratio also witnessed improvement during FY23. Liquidity profile continues to remain sound while capitalization indicators remain adequate, gearing remained low albeit leverage depicts increase. End- HFY24 leverage was reported to be 1.75x (FY23 0.88x, FY22 1.83x) owing to increase in total liabilities. Liquidity profile continues to remain sound while capitalization indicators remain adequate, gearing remained low albeit leverage depicts increase. End- HFY24 leverage was reported to be 1.75x (FY23 0.88x, FY22 1.83x) owing to increase in total liabilities. Going forward, revenue diversification, improvement in capitalization and low market risk along with further improvement in profitability profile 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 .