Karachi, January 19, 2016: JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has assigned initial entity ratings of ‘A-/A-2’ (Single A-Minus/A-Two) to Next Capital Limited (NCL). Outlook on the assigned ratings is ‘Stable’.
Incorporated in 2009, NCL is primarily engaged in brokerage services for equity, fixed income and interbank foreign exchange along with financial advisory services. The company was established with investments from Mr. Najam Ali and a consortium of institutions including MCB Bank Limited, Arif Habib Group, Abbas Corporation Limited and Maple Leaf Cement Factory Limited. Majority shareholding of NCL is held by institutions while more than one-fourth of interest is vested with Mr. Najam Ali. Remaining stake is held by individuals, general public and other entities.
NCL conducts operations through its head office based in Karachi and two branches one each in Karachi and Lahore. During 2015, senior management witnessed changes with appointment of seasoned professionals at key positions. The company primarily serves domestic institutions and retail clients. Revenues of NCL have depicted modest growth over the recent past; equity brokerage commission has historically represented major share of the topline and advisory fees has grown to represent one-third of operating revenues in the outgoing year. However, growth in revenues has not translated into a similar growth in profitability on account of sizeable operating expenses.
The ratings draw comfort from prudent limits for proprietary book & underwriting exposures and also a larger equity base to support brokerage volumes, going forward. The company plans to improve its bottom line on the back of expansion in foreign client operations and greater penetration in the HNWIs segment. With higher anticipated retained profits, a stronger equity base may further enhance the company’s overall business development and risk absorption capacity.
For further information on this rating announcement, please contact the undersigned (Ext: 501) or Mr. Mohammed Khalid Ali (Ext: 508) at 021-35311861-71 or fax to 021-35311872-3.
Applicable rating criteria: Methodology - Securities Firms Rating (May 2015)
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