Karachi, November 24, 2022 (PPI-OT):VIS Credit Rating Company Ltd. has assigned the initial Broker Management Rating of ‘BMR2’ to Insight Securities (Pvt.) Limited. Outlook on the assigned rating is ‘Stable’. The rating signifies strong compliance and risk management and sound external control, HR and infrastructure. Regulatory requirement and supervision, internal controls, client relationship and financial management considered adequate.
Assigned rating takes into account strong compliance and risk management framework and sound external controls and HR and infrastructure. However, internal control framework may be enhanced by broadening the scope of internal policies. Similarly, a separate conflict of interest policy may be drafted for strengthening of the same. To further strengthen contingency measures, having an offsite data backup at a third party warehouse may be considered.
An independent risk management policy may also be considered. Augmentation of client exposure and communications may further improve client services. Additionally, geographical diversification may add further value in terms of providing sustainability and growth to the business. Regulatory and supervisory framework are considered adequate with limited Board size and absence of independent representation.
Assessment of financial profile reflects deterioration in profitability in FY22, led by slowdown in market activity construing into low brokerage revenue and capital loss on investments. Liquidity profile in FY22 remains strong, however, market risk exposure remains elevated with a sizeable propriety book, relative to equity. Capitalization profile is characterized as sound with zero gearing and lower leverage ratio. Going forward, augmenting revenue streams coupled with improving cost to income ratio will be important for rating.
Insight Securities (Pvt.) Limited holds Trading Rights Entitlement Certificate (TREC) granted by Pakistan Stock Exchange Limited (PSX), and is registered with SECP to provide Trading and Self Clearing Services. External auditors of the company are Grant Thornton Anjum Rehman Chartered Accountants. External auditors belong to category ‘A’ on the approved list of auditors published by the State Bank of Pakistan (SBP).
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