Press Release

VIS Reaffirms Entity Ratings of Taurus Securities Limited

Karachi, January 18, 2021: VIS Credit Rating Company Ltd. has reaffirmed the entity ratings of Taurus Securities Limited (TSL) at ‘A/A-2’ (Single A/A-Two). Outlook on the assigned ratings is ‘Stable’. The long term rating of ‘A’ signifies good credit quality with adequate protection factors. Risk may vary slightly from time to time because of economic conditions. Short term rating of ‘A-2’ depicts good certainty of timely payment where liquidity factors are sound and good access to capital markets. Previous rating action was announced on December 3, 2019.

The assigned ratings continue to derive strength from robust profile of TSL’s sponsors including National Bank of Pakistan (NBP), a state owned entity and one of the largest commercial banks in the country. The sponsor has demonstrated both financial and technical support to the company in the past. TSL also has a funding line from its parent. Ratings also incorporate improved brokerage sector outlook over medium term on the back of recovery in overall macroeconomic indicators post COVID-19 lockdown. The same is reflected in increasing value and volume of shares traded in PSX.

Operating profitability of the company depicted improvement in 2019 vis-à-vis 2018 due to cost rationalization initiatives undertaken by the management. Improvement trend in operating profitability continued in 9M’2020 on account of higher brokerage income generated as a result of recovery in volumes of shares traded. Ability to maintain profits at sustainable levels is considered an important rating driver. Profitability is supported by capital gains, operational sustainability is thus important from a rating perspective. Overall liquidity profile is considered satisfactory in view of sizeable liquid assets in relation to total liabilities. Capitalization indicators have also improved with recovery in profitability and reduction in quantum of debt utilized by the company.

For further information on this rating announcement, please contact Mr. Narendar Shankar Lal (Ext: 203) or the undersigned (Ext: 306) at (021) 35311861-66 or email at info@vis.com.pk.



Faryal Ahmad Faheem
Deputy CEO

Applicable Rating Criteria: Methodology - Brokerage Firms Rating (July 2020)
https://s3-us-west-2.amazonaws.com/backupsqlvis/docs/SecuritiesFirm202007.pdf

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