Press Release

VIS Maintains Entity Ratings of Topline Securities Limited

Karachi, April 24, 2020: VIS Credit Rating Company Ltd. (VIS) has maintained the entity ratings of Topline Securities Limited (TSPL) at ‘A-/A-2’ (Single A Minus/A-Two). The long term rating of ‘A-’ signifies good credit quality with adequate protection factors. Risk may vary slightly from time to time because of economic conditions. Short term rating of ‘A-2’ depicts good certainty of timely payment where liquidity factors are sound and good access to capital markets. Outlook on the assigned ratings has been revised from ‘Stable’ to ‘Positive’. The previous rating action was announced on January 18, 2019.

The assigned ratings reflect TSPL’s conservative operating model and low exposure to credit and market risk given high proportion of Institutional Delivery System trades in overall volumes and small proprietary book size. Ratings also reflect company’s healthy liquidity profile and capitalization indicators vis-à-vis peers. Ratings continue to remain affected by cyclical nature of brokerage industry.

Brokerage industry continues to be affected by economic cycles. Low trading volumes during FY19 impacted topline of the brokerage industry but improvement was witnessed during HY20 on the back of higher volumes vis-à-vis corresponding period in the preceding year. Revision in commission rates during 2019 is expected to support profitability profile of brokerage companies. With projected slowdown in economic activity due to the impact of COVID-19, performance of brokerage industry will be tested over time. Comfort is drawn from broad based regulatory relief for multiple sectors (including brokerage) provided by SBP and SECP and relief package provided by federal government to several industries.

Positive outlook has been assigned to ratings due to favorable financial metrics of the company vis-à-vis peers despite challenging operating environment. Although topline of TSPL was also impacted because of lower industrial volumes, efficient cost structure and limited losses on proprietary book due to its small size resulted in limited impact on the bottom-line in comparison to peers. Efficiency ratio (cost to income) of the company is the one of the lowest among its peers. Liquidity and capitalization indicators have improved on a timeline basis and are considered sound. Going forward, improvement in financial performance relative to peers and maintaining a conservative risk profile are considered key rating sensitivities.

For further information on this rating announcement, please contact Mr. Narendar Shankar Lal (Ext: 203) or the undersigned (Ext. 306) at 021-35311861-70 or email at

Faryal Ahmad Faheem
Deputy CEO

Applicable Rating Criteria: Industrial Corporates (April 2019)

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 2020 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

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