Press Release
Date: 14-Jun-22
PACRA Assigns Initial Broker Fiduciary Rating to AHM Securities (Pvt.) Limited

Rating Details Rating Type BFR
Dissemination Date Current (14-Jun-22 )
Action Initial
Rating BFR 3
Outlook Stable
Rating Watch -

Rating Rationale Factor Comment
Ownership The Company is owned by the members of same family. Majority stakes are owned by Mr. Adam Haji Muhammad.
Governance The board is comprised of three members all representing the shareholder family members. Room for improvement exist in the board structure.
Management and Client Services The Company has a lean organisational structure. The management possess the relevant experience and educational profile.
Internal Controls and Regulatory Compilance Presence of internal auditor is noted. Compliance function could be improved further. Independent risk management department is encouraged.
Business Sustainability Brokerage revenue has improved over the period; however, reliance on a single income stream exposes results in increased risk exposure.
Financial Sustainability The Company has an adequate capitalization level with the Net Capital Balance standing at ~PKR 115mln at end-Dec'21.

Key Rating Drivers AHM Securities (Pvt.) Limited’s (“AHM” or “the Company”) is engaged in the provision of equity brokerage services. The rating accounts for the strong business acumen of primary sponsor having a sound financial profile. The governance structure may be improved further with the on-boarding of independent directors. The assigned rating incorporates the sound management team and adequate internal control framework. Formation of an independent compliance function and separate risk management may align the internal control framework with the best practices. The rating incorporates the sound client services including an online trading platform, real-time transaction alerts and complaint management facility. Formation of a research department may further enhance the level of client services. The brokerage revenue has shown improvement in the recent years; however, decline is observed in 9MFY22. The uncertainty prevailing in the equity market amid ongoing political tension may have an adverse impact on topline going forward. Improvement in equity has been noted, while low leverage capital structure provides comfort.

About the Entity
Legal Structure Private Limited
Year of Establishment 06-Jan-05
Type of License Trading and Self-clearing
Majority Ownership Mr. Adam Haji Muhammad (~99%)

Regulatory Disclosures Analyst Applicable Criteria Related Research
Ayesha Qasim

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.