Karachi, April 25, 2018 (PPI-OT): JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has reaffirmed the entity ratings of Intermarket Securities (IMSL) at ‘BBB+/A-2’ (Triple B-Plus/A-Two). Outlook on the assigned ratings is ‘Stable’. Previous rating action was announced on August 31, 2017.
Intermarket Securities Limited (IMSL) is a public limited company incorporated in 2002. IMSL is the flagship company of Intermarket Group (IMG) and provides brokerage services for domestic and international retail and institutional clients and operates as the financial, equity research and corporate advisory arm of IMG.
The assigned ratings incorporate the sound corporate governance framework, sizeable equity observed in FY17 and manageable leverage indicators. Ratings are constrained by the overall downturn of the brokerage industry for HY18 and lower profitability levels vis-à-vis peers in FY17.
Market volumes for the industry increased during FY17 largely due to the reclassification of Pakistan Stock Exchange (PSX) from frontier market to emerging market in the MSCI Index. However, during FY18, erosion of market volumes has decreased revenue across the brokerage industry thereby leading to attrition of brokerage companies’ revenues.
During FY17, IMSL witnessed significant growth from last year in equity brokerage income due to increase in volume of shares trade, however, IMSL increased administrative expenses vis-à-vis peers which led to a net loss. Loss was also incurred in HYFY18 due to the decline in the market volumes as mentioned above.
IMSL’s equity base for FY17 increased on the back of a director’s loan injection, however, the same declined for FY18 due to the partial withdrawal of the director’s loan from equity. Resultantly, the decreased equity base was compensated by take up of debt which led to an increase, within manageable levels, in the leverage indicators for HY18.
For more information, contact:
JCR-VIS Credit Rating Company Limited
VIS House, 128/C,
25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi
Category: General Business News