Press Release

VIS Reaffirms Broker Management Rating of Foundation Securities (Private) Limited

Karachi, June 15, 2021: VIS Credit Rating Company Ltd. (VIS) has reaffirmed the Broker Management Rating of Foundation Securities (Private) Limited (FSL) at ‘BMR2’. Outlook on the assigned rating is ‘Stable’. Previous rating action was announced on May 20, 2020.

The rating signifies strong risk management and external control framework, internal control, client relationship and HR & IT infrastructure are sound with adequate financial management and regulatory compliance levels.

Assigned rating takes note of FSL’s strong sponsor profile and improvement in profitability along with net capital balance on the back of surge in overall trading volumes during the ongoing year. However, high reliance on equity brokerage segment and low capitalization level continue to remain the rating constraints.

On the regulatory front, room for improvement exists in terms of board size while inclusion of independent directors would further strengthen governance framework. Moreover, inclusion of Director’s report and CEO’s statement in the annual accounts has been noted.

Assessment of financial profile indicates improvement in profitability and improvement in efficiency levels on timeline basis. Leverage indicators have significantly increased on the back of increased debt utilization (fresh short-term financing acquired from a local commercial bank) in order to meet exposure requirements.

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




Faryal Ahmad
Deputy CEO

Applicable Rating Criteria: Broker Management Ratings 2020:
https://s3-us-west-2.amazonaws.com/backupsqlvis/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 2021 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .