Final PR
The Pakistan Credit Rating Agency Limited

Shahzaib Khalid

Applicable Criteria

  • Methodology | Broker Management Rating (Sep 17) [View]

Related Research

  • Sector Study | Brokerage / Securities (Oct 17) [View]
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PACRA assigns Broker Management Rating to Alfalah Securities (Pvt.) Limited
 Rating Type Broker Management Rating
 Action. Initial
 BM Rating BMR2
 Outlook Stable

Broker Management Rating of Alfalah Securities (Private) Limited apprehend its emerging position in the country’s brokerage industry. The rating reflects company’s well-adopted approach to keep market risk low. This mainly emanates from prohibition to take proprietary exposure in the market. Currently the company has several foreign broker/dealers on its panel and management is consistently working to expand further. Growing market share on foreign front, experienced top management, adequate risk management procedures are the key traits of the company.

Company is subsidiary of Bank Alfalah Limited, four top management personnel of the bank are currently at the board of the company in capacity of non-executive directors. Furthermore, company has plan to increase synergy with the bank to further enhance its retail segment. Company’s revenue stream is building up and lately reached its breakeven level. Sustainability of this trend is important.

Robust IT infrastructure installed, single ERP platform with full integration of modules. Company has well-developed research department which provides various market reports to its clients on daily basis. Furthermore, value added services including mobile app is available.

The rating entails on the company’s ability to improve its revenues – volume and diversity – to strengthen its emerging positioning in the industry. Moreover, key team, though comprising seasoned professional, is relatively new to Alfalah securities; holding and delivering together is critical.
About the Entity
Alfalah Securities (Private) Limited is a financial services company, licensed as securities broker under Securities Brokers (Licensing and Operations) Regulations, 2016. The company is engaged in equity trading. Company also provides investment banking & advisory services. Alfalah Securities operates from Head office based in Karachi, Pakistan.

It is a subsidiary of Bank Alfalah Limited. Bank owns ~ 98% stake in Alfalah Securities and ultimately majority owned by Abu Dhabi group. Bank is divesting its 30% stake in the company that is expected to be acquire by seasoned professionals, including CEO Mr. Atif Mohammad Khan.

Company’s board constitute of five members including CEO Mr. Atif Mohammad Khan. All directors, other than CEO, are non-executive. Board meets every quarter to review the overall performance. Board has comprehensive discussion on strategy and business plan.
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's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. 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.