The Pakistan Credit Rating Agency Limited
28-Jun-19
Analyst
Shahzaib Khalid
shahzaib.khalid@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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PACRA Maintains Broker Management Rating of EFG Hermes Pakistan Limited
| Rating Type | Broker Management | |
|
Current (28-Jun-19 ) |
Previous (28-Dec-18 ) |
|
| Action | Maintain | Maintain |
| Long Term | BMR2+ | BMR2+ |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
Broker Management Rating of EFG Hermes Pakistan Limited represents its association with EFG Group, an international financial services group with presence in eleven countries, and its emerging position in Pakistan’s brokerage industry. The rating reflects strong sponsor support and governance at all levels, growing market share, matrix reporting organizational structure and experienced management team of the company. EFG Hermes Pakistan has a well-developed organizational structure, with clear reporting lines for respective heads at the group level. It is the first brokerage house in the country with a designated foreign sales team operating from UAE office. The research department draws strength from the experience of EFG Group as the company emphasize on providing high quality market reports to its clients in a systematic way. The IT infrastructure allows full integration of the front and back office functions, allowing generation of real time reports. As a group policy, the company does not invest in equity market and all investments have been deployed in government backed debt securities.
The rating is dependent upon the company’s management to retain market share, successfully materialize the brand name and retention of key human resource remains critical for the rating.
About
the Entity
EFG Hermes Pakistan Limited, a public listed company, licensed under Securities Brokers (Licensing and Operations) Regulations, 2016 as a securities broker and provides securities research and brokerage services to institutional and individual clients. It is also engaged in investment banking activities. The company is 51% owned by EFG Hermes Frontier Holdings LLC, which is wholly owned subsidiary of EFG Hermes Holding S.A.E. EFG Hermes has presence in the Middle East and North Africa (MENA) region and specializes in asset management, securities brokering, investment banking, private equity and research. EFG Hermes is the first foreign investment bank and securities broker to have physical presence in Pakistan. The company operates from its head office based in Karachi, Pakistan.
Lately, Mr. Saad Iqbal has been appointed as the CEO of the company. The company has fourteen board members, including the CEO, of which four are independent. The board meets on quarterly basis to review the business performance.