Press Release

VIS Assigns Broker Management Rating to AKD Securities Limited (formerly BIPL Securities Limited)

Karachi, 09 February, 2023: VIS Credit Rating Company Ltd. (VIS) has assigned Broker Management Rating of ‘BMR1’ to AKD Securities Limited, post-merger of AKD Securities Limited with and into Bank Islami Pakistan Limited Securities (BIPLS) and subsequent name change to AKD Securities. Outlook on the assigned rating is ‘Stable’. Previous rating action was announced on August 3, 2022.

The rating signifies strong supervision framework, external controls, risk and compliance levels, strong customer service, HR and IT infrastructure while financial management, internal control environment; compliance and risk management and regulatory frameworks are considered sound.

Listed on the Stock Exchange, AKD Securities Limited (formerly BIPL Securities Limited) is licensed to operate as securities broker, consultant to the issue, and underwriter from the Securities Exchange Commission of Pakistan and holds a Trading Right Entitlement Certificate (TREC) of Pakistan Stock Exchange Limited and Membership card of Pakistan Mercantile Exchange Limited. The principal activities of the Company are brokerage of shares and/or commodities/ money market/ forex trading, financial research, book building, underwriting, investments in securities/commodities, corporate advisory and consultancy services.

On 03 June 2022, under a Scheme of Arrangement approved by the High Court of Sindh, effective July 1, 2022, the entire undertaking of AKD Securities Limited, a public unlisted company in Pakistan with AKDSL was merged with and into the BIPL Securities Limited, a listed brokerage Company, and the entire business of AKDSL including its properties, assets, liabilities and rights and obligations vested into the Company. Upon sanction of the Merger Scheme, the name of the Company has been changed to AKD Securities Limited on 22 July 2022.

The Company operates as a listed entity, which bodes well for overall regulatory compliance and governance framework. Rating takes into account Company’s improved market position with strong and enhanced customer base as well as geographical footprint spread over 10 cities in Pakistan. Rating also incorporates sound internal controls and compliance framework. Client facilitation tools for enhancing customer experience have been established, however, AKDSL is in the process of further augmenting the same through various additions.

The rating also takes note of sound financial profile of the Company. Despite challenging market conditions, strong market position of the post-merger entity provides support to business and financial sustainability of the Company. In FY22, Company’s earning profile witnessed deterioration on the back of subdued market activity subsequently resulting in a higher cost-to-income ratio and negative bottom-line, however capitalization profile on the back of string equity base and liquidity profile remained manageable. Market risk exposure of the Company is elevated on account of sizeable proprietary book. Improvement in earning profile and efficiency levels while managing market risk exposure and liquidity metrics will remain important for rating.

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 RSM Avais Hyder Liaquat Nauman 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. Syeda Batool Zehra Zaidi (Ext: 210) or the undersigned (Ext: 207) at (021) 35311861-66 or email at info@vis.com.pk.



Sara Ahmed
Director

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 2023 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .