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PACRA Maintains Broker Management Rating of IGI Finex Securities Limited

Lahore, August 29, 2022 (PPI-OT):IGI Finex Securities Limited (“IGI” or the “Company”) is a wholly owned subsidiary of IGI Holdings Limited. IGI’s competitive edge lies in its distinct corporate culture and client-centric approach. The assigned rating reflects IGI’s association with a well-established group and dominant player “Ali Group” in the industrial and services arena. The assigned rating is complemented by IGI’s adequate market share, well-built governance structure, and satisfactory financial strength. IGI’s team is comprised of experienced and well-trained staff supported by a qualified research team with a wide coverage of the economy and all major sectors as well as a tech-driven web and mobile trading platform.

Appointment of ‘A’ category external auditors and establishment of two board-level committees augurs well for insightful monitoring. The internal audit function of the Company is outsourced which further strengthens the independent insight. IGI serves clients all across the spectrum comprising local and foreign institutions, corporate, high net worth, and retail investors from its offices in six different cities. Formulation of the employee confidentiality agreement, insider trading guidelines, and conflict of interest policy along with KYC and CDD policies result in strong internal control and regulatory compliance.

The top-line of IGI is concentrated to equity brokerage income which puts constraints on rating. The Company is not running any proprietary book hence, not exposed to market risk. A low leveraged capital structure and sizable liquid assets against trade-related liabilities provide further support to the rating. The Net Capital Balance of IGI clocked in at ~PKR 112mln with an equity base of ~PKR 328mln at end-Jun’22. The income from equity brokerage stood at ~PKR 67mln for 1HCY22, depicting a decline of ~62% due to an industry-wide downward trend in volumetric activity. Despite of huge decline in commission income, the Company managed to remain in profit. The profit after tax came in at ~PKR 5mln for 1HCY22.

The ratings are dependent on the management’s ability to maintain and enhance its market share to improve its competitive position in the brokerage industry. Retention of key personnel, improved performance indicators, leverage free capital structure, continued improvement in customer servicing tools, and maintaining adequate controls will remain critical

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

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