The Pakistan Credit Rating Agency Limited
30-May-19
Analyst
Shahzaib Khalid
shahzaib.khalid@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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PACRA Assigns Initial Broker Management Rating to Shajar Capital Pakistan (Pvt.) Limited.
| Rating Type | Broker Management | |
|
Current (30-May-19 ) |
||
| Action | Initial | |
| Long Term | BMR3 | |
| Short Term | - | |
| Outlook | Stable | |
| Rating Watch | - | |
The rating reflects the company’s adequate ownership and governance profile. The company is owned by Dar-ul-Shifa International (Pvt.) Limited, an established healthcare venture. The rating incorporates the company’s stable market share, currently ~2.5% and continuous efforts to diversify its revenues in prevailing weak capital market situation. The company has adequate IT infrastructure and risk management framework and appropriately designed organizational structure with adequate departmentalization, which bodes well for sustained operations. The company has devised detailed policies for IT, CDD/KYC and AML. The company is exposed to market risk and potential conflict of interest as it has limited short term proprietary investments which were stood at ~PKR 8mln at end Dec-18. The company has a low leveraged structure and adequate capitalization level with the Net Capital Balance of ~PKR 37mln as at 30th June 2018, which meets the minimum regulatory requirement.
The rating is dependent on the management's ability to retain its market share and enhance the volumes and diversity of revenue to improve its competitive position in the brokerage industry. Retention of key personnel, improvement in customer servicing tools and maintaining strong controls will remain critical.
About
the Entity
Shajar Capital Pakistan (Private) 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 non-executive 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.