PACRA Maintains Entity Ratings of JS Global Capital Limited
The ratings reflect JS Global's story brand, sizable market share, competitive positioning and extensive outreach to retail segment. Despite the lackluster performance of the equity market and dwindling trading volumes, the company has maintained it's market share.The company intends to further enhance its market share through branch network and strengthening operating platform, while developing new products. The ratings incorporate JS Global's robust financial profile characterized by debt free capital structure and strong risk absorption capacity owing to its healthy liquidity profile. The company has defined investment limits through a formal policy. This limits the risk exposure to an extent. The Company does not engage in proprietary trading in equities. Even in the lackluster performance of the stock market, the Company maintained the profitability, albeit small, despite reduction in equity brokerage and corporate advisory income. The management expects this trend to reverse, given recent improved performance and volumes in stock market. The ratings take into account the company's association with a leading financial group,"JS Group", of the country.
The ratings are dependent on the managements's ability to augment brokerage and other income by capitalizing on improved market sentiments. Retaining market share and sustaining profitability from core operations remain critical. Meanwhile, retention of key individuals is important. Significant leveraging, impacting financial profile, will impact the ratings.
JS Global, with commercial operations starting in May 2003, carries the legacy of stock brokerage business initiated in the early seventies by Mr. Jahangir Siddiqui. With its head office based in Karachi, the company operates with eleven branches across the country. Its main activities include brokerage, corporate finance, financial advisory, forex, and money market activities. The company is listed on the Pakistan Stock Exchange (PSX). JS Bank Limited (JSBL) and Global Investment House (GIH) are the major shareholders of the company each holding ~84% and ~10% stake in JS Global, respectively. Along with brokerage services, JS Global provides financial advisory services as well.
The board of directors (BoD) of JS Global comprises eight experienced professionals, including the CEO. Three members represent the JS Group. GIH has also nominated three well-qualified and resourceful members. The remaining member is an independent director.