The Pakistan Credit Rating Agency Limited
28-Nov-19
Analyst
Madiha Sohail
madiha.sohail@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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PACRA Maintains the Broker Management Rating of Shajar Capital Pakistan (Pvt.) Limited
| Rating Type | Broker Management | |
|
Current (28-Nov-19 ) |
Previous (30-May-19 ) |
|
| Action | Maintain | Initial |
| Long Term | BMR3 | BMR3 |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
The rating reflects the Company's modest business profile with the adequate governance structure. Majority owned by Dar-ul-Shifa International Private Limited, (89% shareholding). The Company catered the challenging economic condition of the country and maintained its market share at around 2%. The company has lean organizational structure with adequate departmentalization. The company has adequate IT infrastructure and risk management framework. the company has devised IT, CDD/KYC, AML and employee's code of conduct policies, in line with directives of the regulators. These can be further stengthened by implimenting seperate policies and procedures for key functions. The company is exposed to market risk and potential conflict of interest as it has a small proprietary investment portfolio, (~PKR 7mln or 3.5% of equity). The company has a low leveraged capital structure, supported by sponsors loan, and modest net capital balance of ~PKR 29mln at the end FY19 that meets the minimum regulatory requirement. the NCB reduced on YoY basis.
The rating is dependent on the management's ability to improve revenues, in turn, profitability of the company . Meanwhile, retaining key personnel, improving governance framework and maintaining strong controls is critical.
About
the Entity
Shajar Capital Pakistan (Pvt.) Limited was formed through the acquisition of Crosby Securities in 2010, which was renamed as Burj Capital initially and now as Shajar Capital. The
company’s prime business is equity brokerage, commodity brokerage and consultancy and advisory. The company is the subsidiary of Dar ul Shifa International (Private) Limited holding 89.24% shares, rest of the stake lies with Syed Ali Farhan Razi and Javed Yousuf Ahmedjee. The company's board comprises four members, including the CEO, Mr. Rehan Ateeq. Mr. Javed
Ahmedjee is the Executive Director, Mr. Amir Waliuddin and Syed Ali Farhan Razi are nonexecutive directors. Mr. Amir Waliuddin Chishti is also entrusted with the responsibilities of the
Chairman of the board. He is associated with Chishti group of companies and also the Chairman of Dar ul Shifa (Pvt.) Limited.