Press Release

JCR-VIS Revises Entity Ratings of Dawood Equities Limited

Karachi, June 23, 2017: JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has revised the entity ratings of Dawood Equities Limited (DEL) from ‘BB+/A-3’ (Double B Plus/A-Three) to ‘BB-/A-3’ (Double B Minus/A-Three). Outlook on the assigned ratings is ‘Stable’. The previous rating action was announced on December 15, 2015.

Assigned ratings incorporate improvement in profitability of the company largely on the back of a one time capital gain on sale of PSX shares. However, they are constrained by observed weaknesses in governance and operational structure of the organization. To enhance the control environment, an Internal Audit (IA) & Compliance department was formed in 2016. Nevertheless, this function needs to be geared up to implement a robust framework for monitoring and prevention of regulatory breaches.

Ratings also factor in DEL’s market share in equity brokerage and current capitalization level. Operations of DEL are limited to provision of equity brokerage services to domestic clients. Since last review, the company underwrote several transactions; further growth in underwriting activity is envisaged by management in the ongoing fiscal year. Such growth would need to be supported by increased capitalization levels. Going forward, management intends to utilize its corporate relationships to enhance its High Net Worth Individuals (HNWIs) customer base.

For further information on this rating announcement, please contact the undersigned (Ext: 201) at (021)35311861-71 or fax to (021)35311872-3.

Javed Callea

Applicable Rating Criteria: Methodology - Securities Firms Rating (May 2015)

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited VIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.VIS, the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report.VIS is not an NRSRO and its credit ratings are not NRSRO credit ratings.VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2017 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.

JCR-VIS Credit Rating Company Limited