Press Release

VIS Upgrades Broker Management Rating of Integrated Equities Limited

Karachi, February 11, 2022: VIS Credit Rating Company Ltd. (VIS) has upgraded the Broker Management Rating of Integrated Equities Limited (IEL) to ‘BMR2+’ from ‘BMR2’. Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on January 11, 2021.

The rating signifies strong HR & infrastructure and external control framework. Client services, internal control framework and compliance & risk management and regulatory requirements are considered sound, while supervision framework and financial management are adequate.

The rating upgrade takes into account recent increase in Board size along with addition of independent members, which is expected to further improve supervisory framework. Acquiring additional licenses and increasing the net capital balance over time may improve revenue generation and support larger trading activity. Assigned rating also takes into account IEL’s strong HR and infrastructure. Implementation of a fully integrated ERP platform with appropriate contingency measures is noted. Client facilitation is considered sound, with availability of web and mobile-based trading platforms. Overall external control framework is considered strong while internal control framework is considered sound; however, the scope of internal policies maybe enhanced through additional guidelines and details. The rating also reflects sound compliance and risk management framework.

Assessment of financial profile indicates improvement in topline and profitability on account of higher brokerage revenue in FY21, in line with the market. Liquidity profile is adequate with liquid assets. Market risk remains minimal as the company does not actively participate in proprietary trading. Capitalization indicators are adequate with gearing and leverage within manageable levels, albeit equity base remains small. Going forward, increasing revenue base along with market share, continued improvement in operational efficiency and strengthening of equity base will be important for rating.

Integrated Equities Limited is an unlisted public limited company, engaged in provision of equity and commodity brokerage services to retail and institutional clients. Major shareholding is vested with Mr. Sardar Ali Wattoo. The Company operates through its offices in Lahore. The Company holds a Trading Right Entitlement Certificate (TREC) for Trading & Self-Clearing issued by the Pakistan Stock Exchange Limited (PSX), Consultant to the Issue (CTI) issued by the Securities & Exchange Commission of Pakistan (SECP), Registration with SECP as Research Entity. Moreover, the company is in the process of seeking Securities Adviser and Futures Adviser License which is expected to diversify its revenue base.

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 Management Ratings 2020
https://docs.vis.com.pk/docs/BMR202007.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 2022 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .