PACRA assigns Broker Management Rating to Optimus Capital Management (Pvt.) Limited
|Rating Type||Broker Management|
Optimus Capital Management (Pvt.) Ltd is an emerging brokerage house and the broker management rating assigned to it takes into account its sound risk management framework, adequate organizational structure and adequate IT infrastructure. Optimus has clearly designed organizational structure with most of the departmental heads reporting to CEO. However, few heads have additional responsibilities alongside their main roles. Company has no independent and non-executive director on its board. The company has limited exposure to market risk due to no proprietary trading. Ongoing efforts have been put into establishing and implementing risk management and compliance policies which alleviate risks inherent in the brokerage business. Furthermore, company has adequate capitalization levels with the net capital balance of PKR 181 million as at 31st December, 2017.
The rating entails from zero leveraging, meagre sales and trading staff and weak corporate governance framework. Currently, the sales and trading staff is small and the company plans to expand the human resource in order to strengthen the team. Company has majority of its revenue from local clients and management has devised a suitable strategy to attract foreign customers which would accumulate revenues. Enhancement in retail sales would further add diversity and support to the brokerage business. Despite having operating loss in first half FY18, the capital structure is leverage-free. The equity base of PKR 275 million provides cushion against losses which keeps the financial risk under control.
The rating makes it necessary to enhance the volumes and diversity of revenue in order to establish a competitive position in the brokerage industry. Consistent profits, retention of key personnel and continuing improvement in customer servicing tools will bode well for the company.
Optimus Capital Management (Private) Limited, formerly known as Millennium Capital Management (Pvt) Ltd was incorporated in 2004. Company’s prime business is equity brokerage and it also provides financial advisory, equity investments research and corporate finance services to individual and institutional clients. It has been rated A- for the long-term and A2 for the short-term by PACRA.
The company is 99.9% owned by 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. Muhammad Mohsin Ahsan. Mr. Asif is the Executive Chairman and Mr. Mohsin is the Director Research of the company.