Karachi, March 7, 2017: JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has reaffirmed entity ratings of R.F.J Equity (Private) Limited (REL) at ‘BB/A-3’ (Double B/A-Three). Outlook on the assigned ratings is ‘Stable’. Previous rating action was announced on December 1, 2015.
Ratings of REL take into account the sponsor support of Westbury Group of Companies (WGC), a conglomerate having presence in the financial and industrial sectors. Since brokerage operations of REL are relatively inactive, profitability of REL has been entirely dependent on returns from the investment portfolio. Profitability of REL substantially declined in FY16 on account of higher realized losses on its investments. As a result, the company incurred a negative bottom line of Rs. 9.3m in 2016 vis-à-vis a profit of Rs. 29.9m last year. To date, there is no debt on their books. Going forward, the company intends to take cautious decisions when investing in the stock market. Given that managerial responsibility is vested primarily with the CEO, the company has significant key person risk.
For further information on this rating announcement, please contact the undersigned (Ext: 207) or Mr. Javed Callea (Ext: 201) at (021)35311861-71 or fax to (021)35311872-3.
Jamal Abbas Zaidi
Applicable Rating Criteria: Methodology - Securities Firms Rating (May 2015) http://www.jcrvis.com.pk/Images/Securities%20methodology%201%20-2015.pdf
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