Press Release     
PACRA assigns Initial Broker Fiduciary Rating to Abbasi and Company (Pvt.) Limited
Date: 25-Jun-21

Rating Details Rating Type Broker Fiduciary Rating
Current
25-Jun-21
Previous
--
Action Initial --
Rating BFR 2 --
Outlook Stable --
Rating Watch - --

Rating Rationale Factor Comment
Ownership ACPL is family owned business where shareholding is primarily vested with Mr. Muhammad Ismail Abbasi (69.7%).
Governance BoD comprises professionals having experience in the financial services; however, room for improvement exists for independent insight.
Management and Client Services ACPL has well developed organizational structure with qualified and experienced management team. ACPL has fully integrated database modules and clients are provided with a complete range of services.
Internal Controls and Regulatory Compilance Internal audit is outsourced which strengthens the control environment. Policies exist to manage liquidity, market and other operational risks.
Business Sustainability ACPL's average market share during FY20 stood at ~2%. Brokerage income increased by ~16% in FY20, but lack of diversification in top line revenue constraints the rating.
Financial Sustainability Due to zero leverage, capitalization indicators are considered sound. The Company is running proprietary book hence, exposed to market risk.

Key Rating Drivers The assigned rating of Abbasi and Company (Pvt.) Limited or "the Company" incorporates the Company's low leveraged capital structure, seasoned management team, strong internal control framework, satisfactory risk management and compliance with regulatory affairs. However, the rating is constrained by governance framework of the Company which needs improvement. The rating is dependent on maintaining the market share, low leverage metrics, retention of key management, sustainable operating profitability and efficient implementation of planned business strategy.

About the Entity
Legal Structure Private Limited
Year of Establishment 13-Feb-99
Type of License Trading and Self-clearing
Majority Ownership Private Individuals - Family

Regulatory Disclosures Analyst Applicable Criteria Related Research
Afnan Iqbal
afnan.iqbal@pacra.com
+92-42-35869504
www.pacra.com

Methodology | Broker Fiduciary Rating | Jan-21

Sector Study | Brokerage & Securities | Jan-21

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.