Press Release

VIS Assigns Initial Broker Fiduciary Rating to AKD Securities Limited

Karachi, December 27, 2021: VIS Credit Rating Company Ltd. (VIS) has assigned initial Broker Fiduciary Rating of ‘BFR2++’ to AKD Securities Limited (AKDSL). The assigned rating denotes strong fiduciary standards. Outlook on the assigned rating is ‘Stable’.

The rating signifies strong client ownership and governance, management and client services and business and financial sustainability while internal controls and regulatory compliance are sound.

Assigned rating takes into account the strong governance framework and sponsor strength of AKDSL. Board of directors consists of four members including one independent director, forming three board level committees. Increasing the board size may be considered to avoid repetition of members in board committees and to strengthen the governance framework.

Management and client services are also considered strong. Availability of mobile and web-based trading and monitoring facilities, and online reports enhance the customer experience. After the proposed merger with BIPL Securities Limited (BIPLS), the clientele of the company is expected to increase, along with improved market share and geographical footprint. Internal controls are sound, with segregated internal audit and compliance departments. However, the company may increase the scope of internal control policies and add independent risk management function to enhance the regulatory compliance and internal control framework.

The rating also takes note of strong financial profile and improved profit margins of AKDSL as a result of higher operating revenue and capital gains on investments. Higher topline of the company is also reflected in a lower cost-to-income ratio. Liquidity profile is strong, while gearing and leverage also remain low and manageable. Equity base of the company strengthened to PKR 4.4b. However, a sizable proprietary book poses increased market risk.

AKDSL 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). Moreover, the company also holds underwriting and corporate advisory licenses. External auditors of the company are Riaz Ahmad and Co. Chartered Accountants. External auditors from Category ‘A’ of State Bank of Pakistan’s list of auditors.

For further information on this rating announcement, please contact Ms. Sara Ahmed (Ext: 207) or the undersigned (Ext: 201) at (021) 35311861-66 or email at info@vis.com.pk


Javed Callea
Advisor

Applicable Rating Criteria: Broker Fiduciary Ratings 2021:
https://docs.vis.com.pk/docs/BrokerFiduciary012021.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 2021 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .