January 25, 2024 (MLN): The VIS Credit Rating Company Limited (VIS) has maintained the entity ratings of Cyan Limited (PSX: CYAN) at ‘A’ for long-term and ‘A-1’ for short-term with a stable future outlook, the latest press release issued by VIS showed.
A medium to long-term rating of ‘A’ indicates good credit quality; Protection factors are adequate.
While the short-term rating of 'A-1' indicates High certainty of timely payment; Liquidity factors are excellent and supported by good fundamental protection factors.
To note, the previous rating action was announced on November 14, 2022.
Cyan, a subsidiary of Dawood Corporation (Private) Limited, is a public listed company operating under the Dawood Group (DG).
CYAN is an investment management company with expertise in handling investments in public stocks and offering strategic advisory services.
The company has experienced a notable shift in leadership, including the appointment of Abdul Samad Dawood as Chairman and Mohammad Shamoon Chaudry as CEO.
Additionally, new appointments have been made for the positions of Chief Financial Officer and Company Secretary.
The assigned rating incorporates the company’s association with DHG, a major conglomerate with diversified interests across various sectors and a significant presence in the country's economy.
During 2022-2023, the Company has taken measures to reduce business and financial risks by consolidating its various operations, deleveraging its balance sheet to mitigate the impact of interest rate fluctuations, and focusing on dividend yielding stocks for risk management.
Nonetheless, there is a persistent market risk associated with the portfolio's high concentration in specific sectors and individual securities.
During 9MCY23, the company's investment portfolio yields surpassed those of the benchmark KSE-100 index, marking a significant improvement from the previous year's losses.
This performance aligns with the positive trend observed in the KSE-100 index during the same period.
The revision in the rating outlook is due to an improvement in the company’s financial risk profile, as reflected by its healthy liquidity and strong capitalization indicators.
Meanwhile, the ratings are constrained by the inherent market risk of equity investment and market volatility in an emerging stock exchange market.
The ratings are dependent upon market risk management through risk diversification and reducing concentration in the portfolio along with maintenance of capitalization indicators.
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Posted on: 2024-01-25T10:15:10+05:00
