PACRA Maintains the Broker Management Rating of Ismail Iqbal Securities Pvt. Ltd.

The rating reflects the company's continuous efforts to retain its market share in the brokerage industry despite vast volatility and lackluster trading volumes in Pakistan's Stock Market. The rating incorporates the business strategy of the sponsors, emerging business dynamics, effective deployment of human resources, improved risk framework, adequate IT infrastructure, properly designed organizational structure with all the departmental heads reporting to the CEO. The company is also in the process of indulging an independent director on its board to adopt the best practices of the industry which exhibits a positive gesture. The investment book dominated by investments in equity shares exposes the company to conflict of interest and market risk. Ongoing efforts have been made to reduce the size of proprietary book according to the company’s policy which mitigate risks inherent in the brokerage business. Furthermore, the company has adequate capitalization levels with the Net Capital Balance of ~PKR 205mln as at end Dec-18. The company’s revenue generation is mainly focused towards HNWI’s and the management needs to increase the retail penetration.
The rating is dependent upon the company’s ongoing efforts to improve its governance framework and careful monitoring of liquidity risks, strategic planning for improved returns, concerns regarding conflict of interest emanating from investment activities and continuous improvement in customer servicing tools will bode well for the company.

About the Entity
Ismail Iqbal Securities (Pvt.) Ltd. with its inception in the year 2004, is a Corporate Member of the Karachi Stock Exchange and holds ~2% of the average daily volume of the ready equity market. Its main activities include equity brokerage and underwriting. Being a private limited company, it is owned by three individuals. Currently the CEO (Mr. Ahfaz Mustafa) is holding 65% shares of the company and 17.5% of total shares lies with the other director of the company and the remaining stake is held by a non-active member. The family represents Ismail Iqbal group, which is recognized as a leader in the confectionery market, also engaged in education, logistics, and packaging businesses. The company's auditors are Baker Tilly Mehmood Idress Qamar, which have been categorized by SBP as A Category firm.