Analyst
Madiha Sohail
madiha.sohail@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
PACRA Maintains the Broker Management Rating of JS Global Capital Limited
Rating Type | Broker Management | |
Current (27-Dec-19 ) |
Previous (28-Jun-19 ) |
|
Action | Maintain | Maintain |
Long Term | BMR1 | BMR1 |
Short Term | - | - |
Outlook | Stable | Stable |
Rating Watch | - | - |
The ratings reflect JS Global's strong brand, sizable market share, competitive positioning and extensive outreach to the retail segment. Despite the lackluster performance of the equity market and dwindling trading volumes, the Company maintained it's market share.The Company intends to further enhance its presence through branch network and strengthening operating platform, while developing new products. The rating incorporates JS Global's robust financial profile characterized by debt free capital structure and very strong risk absorption capacity owing to its healthy liquidity profile. The Company has defined investment limits through a formal policy to curtail market risk to an extent. The Company does not engage in proprietary trading in equities. The Company maintained the profitability, albeit small, despite low volumes of stock market. The management expects this trend to reverse, given recent improved performance and volumes in stock market. The ratings take into account the Company's association with a leading financial group,'JS Group' of the country.
The ratings are dependent on the management's ability to augment brokerage and other income by capitalizing on improved market sentiments. Retaining market share and sustaining profitability from core operations remain critical. Meanwhile, retention of key individuals and strengthening processes and procedures is important. Implementation of new software, resulting in better controls is critical in this regard.
About
the Entity
JS Global, with commercial operations starting in May 2003, carries the legacy of stock brokerage business initiated in the early seventies by Mr. Jahangir Siddiqui. With its head office based in Karachi, the Company operates with ten branches across the country. Its main activities include brokerage, corporate finance, financial advisory, forex, and money market activities. The Company is listed on the Pakistan Stock Exchange (PSX). JS Bank Limited (JSBL) and Global Investment House (GIH) are the major shareholders of the Company each holding ~84% and ~10% stake in JS Global, respectively. Along with brokerage services, JS Global provides financial advisory services as well.
The Board of Directors (BoD) of JS Global comprises eight experienced professionals, including the CEO. Five directors are non-executive out of which three represent JS Bank, while two members are nominated by GIH. One female director is elected in compliance with Code of Corporate Governance. There are two independent directors.