Press Release
Date: 24-Jun-22
PACRA Maintains Broker Fiduciary Rating of Abbasi and Company (Pvt.) Limited

Rating Details Rating Type BFR
Dissemination Date Current (24-Jun-22 ) Previous (25-Jun-21)
Action Maintain Initial
Rating BFR 2 BFR 2
Outlook Stable Stable
Rating Watch - -

Rating Rationale Factor Comment
Ownership Controlling stakes are owned by Mr. Syed Muhammad Ismail Abbasi who owns ~69.7% of the ownership.
Governance ACPL has appointed three directors on board consisting of the family members.
Management and Client Services The Company has a well-developed organizational structure and an experienced management team resulting in sound client services.
Internal Controls and Regulatory Compliance An outsourced internal audit and a dedicated compliance department ensures adherence to regulatory compliance.
Business Sustainability Major part of revenue emanates from equity brokerage; diversification may provide support to the topline.
Financial Sustainability The presence of prop-book results in market risk exposure. Leverage free capital structure brings comfort to the rating.

Key Rating Drivers Abbasi and Company (Pvt.) Limited ("ACPL" or "The Company") is one of the pioneers of the brokerage industry in the north region primarily serving the HNWIs. The rating incorporates a well-designed organizational structure with proper departmentalization and clearly defined responsibilities. The management carries a good educational profile and possesses the necessary experience to manage business operations efficiently. Clients have been provided with the facility of online trading while a research department is also present. A dedicated customer support department resolves the client’s grievances. The rating reflects a strong internal control environment supported by well-defined policies and outsourced internal audit. An independent compliance department ensures adherence to regulatory compliances. Presence of an independent risk management function would be a strengthening factor. The rating accounts for a sound ownership structure and a strong business acumen of the CEO, Mr. Muhammad Ismail Abbasi. The governance framework may be improved further with an increase in the board size and independent insight. Brokerage revenue has declined for 9MFY22 due to a fall in market volumes, leaving an impact on profitability. Diversification in revenue streams may provide support to the bottom line in a volatile environment. A low leverage capital structure provides comfort. Going forward, sustainability of market share and retention of key management is important.

About the Entity
Legal Structure Private Limited
Year of Establishment 13-Feb-99
Type of License Trading and Self-clearing
Majority Ownership Mr. Syed Muhammad Ismail Abbasi | ~69.7%

Regulatory Disclosures Analyst Applicable Criteria Related Research
Afnan Iqbal

Methodology | Broker Fiduciary Rating | Jan-22

Sector Study | Brokerage & Securities | Jan-22

Disclaimer This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA. The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.