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VIS Upgrades Broker Fiduciary Rating of BMA Capital Management Limited

Karachi, September 27, 2023 (PPI-OT): VIS Credit Rating Company Ltd. (VIS) has upgraded the Broker Fiduciary Rating of BMA Capital Management Limited (BMA) from ‘BFR3+’ to ‘BFR3++. Outlook on the assigned rating is ‘Stable’. The assigned rating denotes good fiduciary standards. Previous rating action was announced on May 13, 2022.

The rating signifies strong management and client services, internal controls, as well as sound ownership and governance while business and financial sustainability are considered sound.

Assigned rating takes note of the Company’s strong management and client services marked by its geographical presence as well as the employment of various client facilitation tools and resources to support clients in executing transactions. Moreover, availability of research reports is also viewed positively. The Company’s internal controls and regulatory framework is also considered strong. However, enhancement in the overall scope of internal policies may be considered to further enhance the internal control framework.

At present, the Company’s board comprises of three members, increasing board size along with independent representation may enhance its governance framework. While the Company has established four board committees, repetition of members is observed across these committees. Improvement in the same may be considered. Overall, disclosure levels of the company are considered sound. Going forward, rating will be imperative on implementation of the planned initiatives undertaken by the Company.

Assessment of financial profile of the Company indicates deterioration of the Company’s operational earning profile wherein the Company’s profitability profile has taken a toll. With losses reported in FY23 primarily on the back of decline in the brokerage revenue amid contraction in trading volumes, consequently, cost-to-income ratio also came under stress. Market risk is considered moderate, moreover, liquidity profile of the Company is considered adequate. During the year, the Company’s leverage and gearing ratios have declined on a timeline basis while losses incurred by the Company have resulted in a drag on the equity base. Going forward, improvement in operational efficiency, low market exposure along with maintenance of gearing and leverage will remain important for rating.

Further, the Company holds a Trading Right Entitlement certificate (TREC) for Trading and Self Clearing Services issued by the Pakistan Stock Exchange Limited (PSX) since 1992. External auditors of the Company are RSM Avais Hyder Liaquat Nauman Chartered Accountants. Auditors are 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

Tel: +92-21-35311861-72

Fax: +92-21-35311873



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