December 14, 2018 (MLN): Pakistan Credit Rating Agency (PACRA) has maintained entity ratings of JS Global Capital Limited at ‘AA’ for long-term and ‘A1’ for short-term, with a stable outlook forecast.
According to the press release issued by PACRA, the ratings reflect JS Global Capital Limited’s (JSGCL) leading position in the brokerage industry emanating from an established brand, sizeable and growing market share, and a sound operating platform.
The ratings incorporate JSGCL's robust financial profile characterized by its un-leveraged capital structure and strong risk absorption capacity owing to its healthy equity base and liquidity profile.
The company is geared up to further enhance its market share, branch network, software development while developing new products. The company's investment portfolio is compliant to its Investment Policy Statement, to invest in 'A' and above rated avenues and is dominated by bank placements and equity spread transactions which provide a stable stream of income.
The performance of the company has been under pressure recently due to lower volumes and trading activity in the market resulting in subdued profitability. The ratings recognize JSGCL's parentage – JS Bank – and its association with JS Group.
The ratings are dependent on the JSGCL’s management’s ability to improve the fee-based income by optimizing its resources and effectively leveraging its outreach leading to better margins. Herein, augmenting its market share would further enhance JSGCL's business profile. Retention and nurturing of key human resources remain imperative for JSGCL. Any further decline in the operating margins/profitability of the company may have implications on the ratings.
