Press Release

VIS Reaffirms Broker Management Rating of AKIK Capital (Private) Limited

Karachi, December 19, 2024: VIS Credit Rating Company Ltd. (VIS) has reaffirmed the Broker Management Rating of AKIK Capital (Private) Limited at ‘BMR3’. Outlook on the assigned rating is ‘Stable’. Last rating action was announced on November 28, 2023.

The rating signifies adequate regulatory requirement, along with adequate supervision, internal controls, client relationship, HR, and infrastructure. Financial Management and Compliance & Risk Management are also considered adequate while external control framework is strong.

AKIK Capital (Pvt) Ltd is principally engaged in the brokerage of shares transactions. The Company caters mainly to domestic institutional and retail investors. AKIK operates through its head office based in Karachi and provides both assisted and online trading services. The Company holds Trading Rights Entitlement Certificate (TREC) granted by Pakistan Stock Exchange Limited (PSX), and is registered with SECP for providing Trading & Self Clearing Services. External auditors of the Company are Kreston Hyder Bhimji & Co Chartered Accountants, which is an ‘A’ category audit firm.

Assigned rating takes note of the adequate supervision framework and room for improvement in regulatory compliance, which can be achieved with an increase in board size, inclusion of independent directors and having more board committees. Similarly, the Company may consider acquiring additional license to improve its product mix. Though the internal control policies and measures are in place, these may be further strengthened by enhancing the scope of internal policies and dissemination of such policies to all stakeholders. Inclusion of CEO’s statement on fraudulent transaction and statement of compliance with code of corporate governance and appointment of an A rated auditors have strengthened the external control framework. The Company has employed various channels for facilitating clients in executing online transactions. However, client services may be improved further through the availability of online customer reports. Business continuity plan of the Company is in place. However, the same may be further enhanced by increasing the frequency of disaster recovery drills. Compliance and risk management framework of the Company is considered adequate; however, addition of an independent risk management function may enhance the risk management framework of the Company.

Assessment of the financial profile depicts a rebound in the operating revenue driven by higher brokerage revenue amid increased trading activity in the market. Consequently, the Company’s cost-to-income ratio witnessed a notable improvement, albeit it remains higher. Market risk is considered higher, given higher investments in equities relative to the size of equity. The liquidity profile is supported by healthy coverage of liabilities by liquid assets. Similarly, the capitalization profile draws support from debt free balance sheet and low leverage indicators. Going forward, augmenting, and diversifying the revenue base along with improving operational efficiency as well as better management of market risk will remain important for the rating.

For further information on this rating, please contact 021-35311861-64 or email at info@vis.com.pk.


Applicable Rating Criteria: Broker Management Ratings:
https://docs.vis.com.pk/Methodologies%202024/Broker-Management.pdf
VIS Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.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 2024 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .