Press Release

JCR-VIS Assigns Ratings to LSE Financial Services Limited, Formerly Lahore Stock Exchange Limited

Karachi, July 4, 2016: JCR-VIS Credit Rating Company Limited (JCR-VIS) has assigned initial entity ratings of ‘A/A-2’ (Single A /A-Two) to LSE Financial Services Limited (LSEFSL), formerly Lahore Stock Exchange Limited. Outlook on the assigned ratings is ‘Stable’.

Subsequent to the integration of stock exchanges, Lahore Stock Exchange ceased its stock exchange operation and was granted a license by SECP to operate as a Non Banking Finance Company under the name LSEFSL.

Ratings assigned to LSEFSL take into accounts its low risk appetite underpinned by a prudent policy on gearing, stable revenue sources and conservative investment policy. Ratings also take into account company’s policy of not engaging in underwriting business. Core business of the company includes management of lease and rental operation of LSE Building. In addition to this, the company has made long term investments in unquoted investments.

Rental income is expected to be the main source of total income followed by treasury income. Other income sources include management fee and dividend income. While low interest rate regime has depressed returns on the treasury portfolio, overall profitability related indicators depict satisfactory position on account of low expense base. Going forward, income levels are expected to increase on account of rentals from the availability of south tower beginning FY17.

Overall liquidity profile of the institution draws comfort from the availability of sizeable liquid asset in relation to borrowings. The company has availed a credit facility for the construction of South Tower. Capitalization levels are considered strong in relation to risk carried on the balance sheet.

For further information on this rating announcement, please contact the undersigned (Ext: 501) at 92-21-35311861 or Mr. Mohammed Khalid Ali (Ext: 508) at 92-21-35311861 or fax to 92-21-35311873.

Javed Callea
Applicable Rating Criteria: Non-Bank Financial Companies (March, 2005)

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 2016 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