PACRA maintains Broker Entity Ratings of Intermarket Securities Limited (Formerly: EFG Hermes Pakistan Limited)

Intermarket Securities Limited (“IMS” or “the Company”) operates as a full-service brokerage platform with a track record spanning over two decades in Pakistan’s capital markets. The court-sanctioned reverse merger, effective July 1, 2024, consolidated operations under the IMS sponsor group, enabling the entity to preserve strategic oversight, operational continuity, and governance standards. FY25 represents a transitional six month period, while 1QFY26 marks the first normalized quarter under the post-merger structure. The Company leveraged a broadly stable macroeconomic environment in Pakistan, characterized by easing inflation (FY25: 4.5% vs. FY24: 23.4%), falling policy rates (20.5% → 10.5% as of Dec’25), and moderate GDP growth (~2.7%). External tailwinds such as rising exports, higher remittances, and a strengthening PKR supported liquidity and trading confidence at the Pakistan Stock Exchange (PSX), creating a favorable backdrop for brokerage activity and market participation. Operational processes, including trade execution, settlement, and exposure management, are centralized and routed through NCCPL and CDC, embedding standardized controls and reducing operational and counterparty risk. Margin-financing receivables reached ~PKR 1.13bn, while trade debts stood at ~PKR 717mn as of 1QFY26, reflecting growth in client activity and effective collateralization practices. Proprietary positions increased to ~PKR 498mn (~29% of equity), aligning with elevated market turnover. Financial performance strengthened alongside favorable market conditions. FY25 operating revenue totaled ~PKR 644mn with profit after tax of ~PKR 155mn, improving to revenue of ~PKR 394mn and PAT of ~PKR 210mn in 1QFY26. Equity rose to ~PKR 1.71bn, supported by internal capital generation, while short-term borrowings of ~PKR 931mn financed margin-financing and settlement requirements. IMS maintains a cost structure largely variable in nature, with staff costs, clearing charges, and administrative expenses scaling in line with market activity, providing operating flexibility while reflecting the inherent cyclicality of brokerage income. In terms of market positioning, IMS operates within Pakistan’s brokerage landscape alongside larger diversified houses as well as more specialized market participants. While revenue remains concentrated toward brokerage-driven activity, the post-merger scale in margin financing and proprietary investments enhances the entity’s revenue-generating capacity. The Company’s medium-term strategy emphasizes client-base expansion, selective technology integration, and measured balance-sheet deployment, aiming to strengthen operational capacity and diversify revenue streams.
Continuation of the entity rating relies on sustained governance oversight, stability and depth of the ownership group, and disciplined execution across core operations, risk management, and compliance. Prudent capital deployment, vigilant liquidity management, and rigorous oversight of brokerage, margin-financing, and proprietary activities will remain central to preserving operational stability and financial resilience.

About the Entity
Intermarket Securities Limited (“IMS”) was incorporated on September 27, 1999, and is a public listed company on the Pakistan Stock Exchange Limited since March 20, 2008. Effective July 1, 2024, IMS completed a court-sanctioned reverse merger with EFG Hermes Pakistan Limited, consolidating the operating platform under the IMS sponsor group. The Company operates as a full-service brokerage platform, providing equity brokerage, margin financing, proprietary investments, investment banking and advisory services, and equity and economic research. IMS is led operationally by CEO Mr. Wajid Hussain, who brings over 25 years of experience in capital markets, and is chaired by Ms. Erum Bilwani, sponsor and non-executive director, ensuring strategic oversight and governance continuity.