VIS Maintains Broker Fiduciary Rating for Muhammad Munir Muhammad Ahmed Khanani Securities at ‘BFR2’

Karachi, VIS Credit Rating Company Ltd. (VIS) has reaffirmed the Broker Fiduciary Rating of Muhammad Munir Muhammad Ahmed Khanani Securities Limited at ‘BFR2’ with a stable outlook. This rating, first set on November 15, 2023, reflects the company’s strong internal controls, financial sustainability, and effective client service, along with robust ownership and governance structures.

According to VIS Credit Rating Company Limited, the reaffirmation of the rating acknowledges the company’s well-managed ownership and governance. Muhammad Munir Muhammad Ahmed Khanani Securities Limited operates as a public unlisted company, offering equity and commodity brokerage, along with research services to both institutional and retail clients across Pakistan, including major cities like Karachi, Lahore, and Islamabad. The company holds a Trading Rights Entitlement Certificate from the Pakistan Stock Exchange and is registered with the Securities and Exchange Commission of Pakistan for Trading and Self Clearing Services.

The assessment by VIS highlighted the company’s sound management practices and expanded geographical presence, with 19 branches nationwide enhancing its market footprint. The company’s use of web-based trading resources and improved investor grievance procedures were also noted as strengths. Despite a challenging fiscal year marked by low market activity, the company’s financial health was supported by capital gains and unrealized gains on investment re-measurement.

However, the report noted challenges such as an increase in the cost-to-income ratio due to a drop in core brokerage income and rising administrative expenses. While liquidity remains adequate, there was a slight deterioration in capitalization indicators, with increased short-term borrowings noted at the end of FY24. The company’s active involvement in proprietary trading also brings a high level of market risk.

Looking ahead, VIS emphasized that improvements in the company’s earnings profile, cost management, and market risk mitigation are crucial for maintaining and potentially improving its rating in the future.

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