Analyst
Muhammad Junaid
muhammad.junaid@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
PACRA Upgrades Broker Management Rating of Optimus Capital Management (Pvt.) Limited
Rating Type | Broker Management | |
Current (29-Oct-21 ) |
Previous (09-Apr-21 ) |
|
Action | Upgrade | Maintain |
Long Term | BMR2 | BMR3+ |
Short Term | - | - |
Outlook | Stable | Stable |
Rating Watch | - | - |
The assigned rating reflects the Optimus Capital Management (Pvt.) Limited’s (“Optimus Capital” or “the Company”) experienced management team, acclaimed research and strong control environment. The rating draws strength from the experienced profile of the CEO, Mr. Asif Ali, who has been associated with the capital markets for over 25 years. On governance front, inclusion of independent director would enable the Company to procure independent insight. The rating also takes note of satisfactory client servicing , appropriate IT infrastructure, effective internal audit function, prudent financial management and adequate risk assessment & compliance procedures. The market share of the Company has declined to ~1.5% during FY21, on account of off loading from foreign clientele which contributes around 25% to total market contribution of Optimus Capital. However, the Company has well performed in off market deals. Going forward, the Company is intensively focusing on strengthening its position through penetration in retail segment. In order to strengthen this, the Company is also in process of strengthening its technology platform and also hired head of online trade. The Company has devised comprehensive Disaster Recovery plan well-developed transactions execution and monitoring system, sound research quality and strong control environment. The management team comprises seasoned professionals that ensures sound quality of services. The Company is not running proprietary book hence, less exposed to market risk. In order to strengthen its revenue base the Company is also focusing on corporate finance and advisory services. During FY21, the Company earned PAT of PKR 21mln(FY20: PKR (6)mln). The rating also takes comfort from leverage free capital structure. Furthermore, the Company has adequate capitalization levels with the Net Capital Balance (NCB) of ~PKR 191mln as at 1HFY21. The equity base of ~PKR 339mln, as at end-Jun’21, provides cushion against potential losses. Going forward, upturn in performance, on the back of hefty trade volumes at the PSX and favorable macroeconomic environment would act as tailwinds for the Company.
Strengthen market share, sustainable profits, sound internal controls, client relationship, HR & IT services and risk management framework, regulatory compliance, external control environment will remain imperative. Further, rational diversification of business activity may provide support to the company’s overall financial risk profile.
About
the Entity
Optimus Capital Management (Private) Limited, formerly known as Millennium Capital Management (Pvt) Ltd, was incorporated in 2004. The Company’s prime business is equity brokerage, financial advisory, equity investments research and corporate finance services to individual and institutional clients. The Company is wholly owned subsidiary of Optimus Holdings (Private) Limited (formerly Peabody Associates Private Limited). The two sponsors of Optimus Holdings, Mr. Asif Ali Qureshi and Mr. Jawad Amjad, have more than two decades of experience in the financial sector of Pakistan. The Company’s board is composed of two directors, Mr. Asif Ali Qureshi and Mr. Mohsin Ahsan. Mr. Asif Ali Qureshi is the chairman and CEO of the Company.