Press Release

VIS Reaffirms Entity Ratings of Mohammad Munir Mohammad Ahmed Khanani Securities

Karachi, August 17, 2021: VIS Credit Rating Company Ltd. (VIS) has reaffirmed the entity ratings of Mohammad Munir Mohammad Ahmad Khanani Securities at ‘A-/A-2’ (Single A Minus/A-Two). Long term rating of ‘A-’ signifies good credit quality with adequate protection factors. Risk may vary slightly from time to time because of economic conditions. Short term rating of ‘A-2’ depicts good certainty of timely payment where liquidity factors are sound and good access to capital markets. Outlook on the assigned ratings is ‘Stable’. Previous rating action was announced on May 07, 2020.

Reaffirmation of ratings takes into account the significant improvement in market share, strong growth in core brokerage income and sizeable capital gains supporting the profitability profile. Ratings also incorporate sound liquidity profile and strong capitalization as reflected by sizeable equity base. Leverage indicators have trended upwards in line with the increase in business volumes. Rating constraints include increasing market risk on proprietary book and burgeoning trade debts impacting the risk profile of the company. Corporate governance framework is considered adequate; however, room for improvement exist in terms of segregating the position of CEO from Chairman of the Board.

Revenue concentration in equity brokerage continues with some diversification into underwriting during the review period. Going forward, the management plans to remain focused towards revenue diversification and increasing retail penetration through branch network expansion and leveraging digital platforms. Since last review, 5-6 branches have been added (mainly in Peshawar, Sahiwal, Karachi & Islamabad) while further addition of 2 new branches is planned in the ongoing fiscal year. IT system has been revamped which mainly included the upgradation of trading portal, mobile application and web-based portal. Ratings are sensitive to the inherent market risk and the volatility in the stock market given the sizeable proportion of the investment in proprietary book.

For further information on this rating announcement, please contact Mr. Muhammad Tabish (Ext: 203) or the undersigned (Ext. 306) at 021-35311861-70 or email at info@vis.com.pk .





Faryal Ahmad Faheem
Deputy CEO

Applicable rating criteria: Methodology - Securities Firms Rating (July 2020)
https://s3-us-west-2.amazonaws.com/backupsqlvis/docs/SecuritiesFirm202007.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 .