PACRA Maintains Entity Ratings of Alfalah CLSA Securities (Private) Limited : AsiaNet-Pakistan

PACRA Maintains Entity Ratings of Alfalah CLSA Securities (Private) Limited

December 26, 2019 | General Business News | Share:

Lahore, December 26, 2019 (PPI-OT): The Ratings reflect the Company’s ability to retain its market share in lackluster equity market. The company is expected to benefit from its association with CLSA -a wholly owned subsidiary of CITIC Securities, the largest investment bank in China- who acquired 24.9% stake in the company, especially for international exposure and business. The performance of the company has been under pressure recently due to lower volumes and trading activity in the market, resulting in net losses.

However, the recent up surge in volumes in equity market is expected to stem this trend. The company strengthened its equity base with fund injection from CLSA and significantly reduced its leveraging. This has improved financial indicators and will reduce finance cost. The company has adequate level of capitalization with Net Capital Balance of ~PKR 154 mln, whereas Net Equity as at end Jun’19 stood at ~PKR 245 mln (Dec’18 ~PKR 134 mln).

The rating is dependent on the company’s ability to leverage its association with CLSA and improve revenues and profitability. Financial Performance, Retention of key human resources and continuous risk monitoring will bode well for the Company. Sustained trend of losses resulting in equity erosion, and/or excessive leveraging will have negative rating implication.

For more information, contact:
Analyst
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425
Email: hammad.rashid@pacra.com
Web: www.pacra.com

Tags:

Category: General Business News