FLASHNEWS:

PACRA Assigns Initial Ratings to JS Global Capital Limited Commercial Paper – PKR 1,000 million

Lahore, January 05, 2022 (PPI-OT):The ratings take into account JS Global Capital Limited’s (“JSGCL” or “The Company”) established position as one of the top-tier brokerage houses of the industry. The ratings incorporate the stable and sizeable market share, established brand name and a sound operating platform. The strong sponsor profile, zero leveraged capital structure and well managed liquidity indicators bodes well for the rating.

Following the recent boom in traded volumes of the stock exchange, core revenue of the Company surged by ~110% to ~PKR 911mln for 9MCY21 (SPLY: ~PKR 430mln) and the Company maintained its market share. The Company’s investment portfolio is compliant to its investment policy and is dominated by bank placements and equity spread transactions which provide stable stream of income.

The rating takes into account the Company’s strong financial profile with the Net Capital Balance of ~PKR 870mln and an equity base of ~PKR 2.3bln at end-Sep’21. Whereas, the topline of the Company depicts diversified revenue stream supplemented by consultancy income, RBFS trade, margin financing and investment return on financial assets. The Company remained profitable during 9MCY21 and generated a profit after tax of ~PKR 400mln (SPLY: ~PKR 136mln). JSGCL has issued the CP to take position in the Ready Buy Future Spread (RBFS) transaction in anticipation of a surge in market volumes on the back of reclassification from Emerging Markets to Frontier Markets by MSCI.

The ratings are dependent on the management’s ability to strengthen revenue base by augmenting consultancy and advisory services. Retaining market share and sustaining profitability from core operations remain critical. Meanwhile, upholding strong internal controls and diligent monitoring of risks is important.

For more information, contact:
Analyst,
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore, Pakistan
Tel: +92-42-5869504-6
Fax: +92-42-5830425
Email: hammad.rashid@pacra.com
Website: www.pacra.com