Press Release

VIS Reaffirms Entity Ratings of Adam Securities Limited

Karachi, September 21, 2021: VIS Credit Rating Company Ltd. (VIS) has reaffirmed entity ratings of Adam Securities Limited (ASL) at ‘A-/A-2’ (Single A Minus/A-Two). The long term rating of ‘A-’ signifies good credit quality; Protection factors are adequate. Risk factors may vary with possible changes in the economy. The short term rating of ‘A-2’ signifies good certainty timely payment. Liquidity factors and company fundamentals are sound. Access to capital markets is good. Risk factors are small. Previous rating action was announced on September 17, 2020.

The assigned ratings incorporate ASL’s market share in the brokerage industry, in combination with sound capitalization structure and adequate liquidity. In the outgoing year, we noted strong growth in trading volumes, in tandem with the uptick noted across the industry. ASL also posted some growth in its revenues from investment banking; nevertheless, the topline continues to feature significant reliance on brokerage commissions, and accordingly there remains room for improvement in the revenue diversification domain.

As of Jun’21, ASL was holding a sizable proprietary book. However, majority (~85%) of these exposures are hedged by future contracts limiting the implied market risk of these holdings. Given higher profitability and adequate profit retention, we have noted improvement in capitalization. Going forward, maintaining sustainable revenue streams, growth in clientele, retention of key personnel and maintenance of low leverage indicators are critical from the ratings perspective.

For further information on this rating announcement, please contact the undersigned (Ext: 201) or Mr. Arsal Ayub, CFA (Ext: 216) at 021-35311861-70 or fax to 021-35311873 or

Javed Callea

Applicable Rating Criteria: Securities Firms Rating (July 2020)

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 .