Karachi, April 08, 2020 (PPI-OT): VIS Credit Rating Company Ltd. (VIS) has reaffirmed the Broker Management Rating of AKD Securities Limited (AKDSL) at ‘BMR2++’. Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on March 4, 2019. The rating signifies strong external control framework, client relationship management and HR and IT services while regulatory compliance levels, internal controls and risk and financial management are considered sound.
Reaffirmation of rating continues to factor in AKD’s sound board level governance while performance benchmark of HR and IT infrastructure services has improved during the period under review. Rating also take note of company’s long-standing experience in securities broking business, strong sponsor profile, sizeable retail client base and low-leveraged capital structure.
In terms of Board size, room for improvement still exists. Strengthening the same would enhance board oversight and avoid common members in board level committees. Formation of risk management committee may further enhance corporate level governance. On internal control front, a separate employee trading guidelines (ETP) may be added to the policy documents while holding period needs to be extended and blackout period may also be mentioned.
Moreover, improvements have also been noted on regulatory and compliance front. Nonetheless, maintaining a propriety book is not considered with international best practices. Assessment of earning profile indicates considerable improvement in HFY20; however, there may be re-measurement losses on investments in view of substantial decline in equity market post COVID-19 outbreak. The same will be observed overtime.
For more information, contact:
Director Compliance and Rating Analytics,
VIS Credit Rating Company Limited
VIS House, 128/C, 25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi, Pakistan