Press Release

JCR-VIS Assigns Entity Ratings of AKD Securities Limited

Karachi, October 9, 2015: JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has assigned initial entity ratings to AKD Securities Limited (AKDSL) of ‘A+/A-2’ (Single A Plus/A-Two). Outlook on the assigned ratings is ‘Stable’.

The ratings of AKDSL are driven by the core revenue generating departments in brokerage and underwriting / placement services. The company is a wholly owned subsidiary of Aqeel Karim Dhedhi Securities (Private) Limited (AKDSPL), a holding company with primary function incorporating investments in diverse business ventures including, real estate and energy & power.

AKDSL conducts business operations by providing brokerage services to clients and through underwriting / placement services which includes but is not limited to Privatization Transactions and raising funds via the equity market from both initial and public offerings. The company undertakes its underwriting function as per internal policy limits in line with its adjusted equity which emerges after discounting for certain trade debts and revaluation reserves. A portion of these trade debts are secured against guarantee.

The brokerage department of AKDSL is the primary driving force for revenue generation accounting for 60% of income during FY15 (FY14: 66%). The strength of this department is derived from the online trading system; AKD Trade. The system is one of the largest currently operating in Pakistan.

AKDSL is ranked amongst one of the leading arrangers of equity in capital markets transactions along with maintaining active participation in the privatisation program.

Investments of the company, though sizeable in nature are concentrated in a long term energy & power generation company (associate). Management’s strategic decision of operating debt-free has resulted in the company maintaining a minimal proprietary book, further reducing the impact of market risk. However, both the illiquid nature of strategic long term investment and small quantum of equitable securities have a constraining impact on the liquidity of the company.

Ratings also take into account the affirmation from the main sponsor regarding settlement of liabilities of both the holding and associate company to a financial institution.

For further information on this rating announcement, please contact the undersigned (Ext: 501) or Mr. Jazib Ahmed (Ext: 510) at (021)35311861-70 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 2015 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