The Pakistan Credit Rating Agency Limited
Press Release


Ayesha Qasim

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PACRA Assigns Initial Broker Management Rating to Arif Habib Limited

Rating Type Broker Management
(16-Jan-18 )
Action Initial
Long Term BMR1
Short Term -
Outlook Stable
Rating Watch -

Broker Management Rating of Arif Habib Limited captures its leading position in the country’s brokerage industry emanating from established franchise, deep relationship with diverse customer base, and strong system share. This is underpinned by its well-developed transactions execution and monitoring system, acclaimed research, strong control environment, and good governance framework. It offers various value added services to its clients including online trading terminal, research portal and mobile app. Strong IT infrastructure emplaced under proper guidance of IT steering committee to ensure uniform efficiency.

In addition to brokerage, AHL enjoys distinct position in investment banking and advisory domain. This provides deeper penetration into client base. Credit risk – customer’s receivables and funding – remains low. AHL has high exposure to market risk. It maintains sizeable strategic and trading book. Related risks are managed through well-defined investment policy. Liquidity risk is supported by take-up guarantee from sponsor for strategic book. AHL enjoys robust profitability.

The rating requires upholding strong control and governance framework, continuing update of client servicing tools, and careful monitoring of risks - mainly liquidity and conflict of interest - emanating from investment activities.

About the Entity
Arif Habib Limited is a financial services company, subsidiary of Arif Habib Corporation, listed on Pakistan Stock Exchange. The company is engaged in equity trading, money market, forex and commodities trading. Company also provides investment banking & advisory services to a large scale of clientele. AHL operates from two branches including Head office based in Karachi, Pakistan.

Arif Habib Corporation owns 65.52% stake in AHL. Corporation is key holding for Arif Habib group. It has interest in fertilizer, power, cement, real estate and financial segment. The company has a well composed board. It has seven members including CEO Mr. Muhammad Shahid Ali. Two members are independent and four are non-executive. Board quarterly review overall performance of the company.

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's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. 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.