PACRA Maintains Broker Management Rating of AL Habib Capital Markets (Pvt.) Limited

Al Habib Capital Markets (Pvt.) Limited (“AHCML” or “the Company”) is primarily engaged in the provision of equity brokerage while income from MTS and MFS also aids the topline. The KSE-100 Index has continued its upward momentum, recently breaching the 121k mark in June 2025 amid strong investor confidence and improved macroeconomic indicators. As a result, brokerage industry results for CY24 have been strong, reflecting higher trading volumes and improved market participation. CY25 is expected to remain favorable for the industry, supported by stable interest rates, moderating inflation, and ongoing IMF support; however, external debt obligations, political uncertainty, and regional tensions continue to pose key risks. Additionally, global developments such as changes in tariffs and trade policies have also influenced market sentiment and capital flows. The assigned rating incorporates the business acumen of the primary sponsor “Bank Al Habib Limited”. Representation of the primary sponsor on the board is well noted. The inclusion of an independent director would enhance governance oversight. The rating takes note of AHCML’s well-developed organizational structure with a qualified and experienced management team. The presence of a separate internal audit department contributes positively to the rating; however, further segregation of risk and compliance functions would strengthen the control framework. AHCML provides online trading, a grievance addressing portal, and research facilities to its clients. The Company has formulated a comprehensive Disaster Recovery and Business Continuity Plan to manage unforeseen events. The addition of Online Sales and Marketing has further improved sound client services. The Company's operating revenue is mainly concentrated in equity brokerage. During 1QCY25, the equity brokerage revenue was reported at ~PKR 43mln (SPLY: ~PKR 46mln), primarily due to AHCML’s strategic focus on quality over volume, emphasizing long-term client relationships and prudent risk management amidst evolving market dynamics. The prop book of the Company constitutes ~33% of the equity and stood at ~PKR 144mln at end-Mar'25 as compared to the ~PKR 100mln that constitutes ~18% of the equity in SPLY. Furthermore, the Pakistan Investment Bonds (PIBs) contribute ~66% to the prop book at end-Mar’25 as compared to the ~82% SPLY. The Company has an adequate capitalization level with regulatory Liquid Capital Balance (LCB) standing at PKR ~311mln as at Mar’25. The Company has adequate risk absorption capacity reflected by its adequate and increasing equity base of ~PKR 472mln as in 1QCY25 against ~PKR 378mln in SPLY. The management is on a move to improve the technological infrastructure to facilitate the onboarding of retail clientele. Moreover, geographical diversification is also under consideration to enhance client outreach.
Going forward, sustainability of market share, revenue, and profitability will remain imperative, while upholding strong internal controls and risk management framework and retention of key management is critical. Further, rational diversification of business activity may provide support to the company’s overall financial risk profile.

About the Entity
AL Habib Capital Markets (Pvt.) Limited, “AHCML or The Company” is a licensed TREC holder of Pakistan Stock Exchange and was incorporated under the Companies Ordinance 1984 in 2005 as private limited company. Bank AL Habib Limited (BAHL) is the major shareholder of AHCML, accounting for two‐third of the ownership. The remaining one‐third is held by Habib Family, friends and associates. The Company has 5 directors on the board including CEO and Chairman. The CEO, Mr. Aftab Q. Munshi possesses diversified experience in capital markets. He is also on the Board of Directors of AHCML as Chief Executive since its incorporation. Mr. Munshi served with the Jahangir Siddiqui Group for almost 12 years in multiple roles.