Rating Details	Rating Type	BFR
	Dissemination Date	Current (19-Jul-23 )	Previous (19-Jul-22)
	Action	Maintain	Maintain
	Rating	BFR 2+	BFR 2+
	Outlook	Stable	Stable
	Rating Watch	-	-

Rating Rationale	Factor	Comment
	Ownership	The assigned rating incorporates the business acumen of the primary sponsor " Bank Al Habib Limited", which owns ~67% of the ownership. The remaining shares are held by the Habib Family, friends and
	Governance	The Company has six directors on board, five non-executive and one executive director. Representation of the primary sponsor on the board is well noted. The addition of independent directors to the b
	Management and Client Services	The Company has well developed organizational structure to manage its operations and appropriate policies to protect the clients interest. The ratings incorporate the improvement to AHCMLs client serv
	Internal Controls and Regulatory Compliance	The presence of a separate internal audit department contributes positively to the rating while the board Audit Committee further ensures and effective control environment. However, the separation of
	Business Sustainability	The topline of the Company is concentrated in equity brokerage income which clocked in at ~PKR 68mln for CY22( CY21: ~PKR 125mln). In line with the market activity, the revenue has declined by ~44% du
	Financial Sustainability	The investment book is mostly comprised of GoP securities, hence market risk exposure is limited. Short-term financing stood at ~267mln while equity stood at ~PKR 338mln at end-Dec22.

Key Rating Drivers

Going forward, it is imperative to diversify revenue sources. The managements ability to retain its market share and boost trading volumes in order to improve its competitive standing in the Brokerage Industry is an integral part of the rating decision. Retention of key personnel, adherence to regulatory requirements, and sustainability of profitability will remain important from a rating perspective.

About the Entity
	Legal Structure	Private Limited
	Year of Establishment	23-Aug-05
	Type of License	Trading and Self-clearing
	Majority Ownership	Bank AL Habib Limited

Regulatory Disclosures	Analyst	Applicable Criteria	Related Research
	Hassaan Ahmad Hassaan.Ahmad@pacra.com +92-42-35869504 www.pacra.com	Methodology | Broker Fiduciary Rating | Jan-23	Sector Study | Brokerage & Securities | Jan-23

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