Press Release
Date: 14-Jun-23
PACRA Maintains Broker Fiduciary Rating of AHM Securities (Pvt.) Limited

Rating Details Rating Type BFR
Dissemination Date Current (14-Jun-23 ) Previous (14-Jun-22)
Action Maintain Initial
Rating BFR 3 BFR 3
Outlook Stable Stable
Rating Watch - -

Rating Rationale Factor Comment
Ownership The majority of stakes are owned by Mr. Adam Haji Muhammad who is also the primary sponsor. The assigned rating takes comfort from the vast experience of Mr. Adam pertaining to equity markets.
Governance The board is comprised of three members all representing the shareholder family members. Room for improvement exists in the board structure.
Management and Client Services AHM has a seasoned management team with a lean organizational structure. AHM has provided its clients with the facility of online trading featuring universal access to their accounts.
Internal Controls and Regulatory Compliance AHM has adequately implemented the control framework which commensurate with the scale of business operations. However, AHM may consider improvement in the compliance and establishing a separate risk
Business Sustainability The primary income stems from equity brokerage which reflected considerable improvement during FY21; however, adverse market conditions have halted the growth momentum during FY22 and 1HFY23.
Financial Sustainability AHM has adequate capitalization level with the equity standing at ~PKR 130mln at end-Dec’22. AHM is managing a prop-book which exposes it to market risk.

Key Rating Drivers AHM Securities (Pvt.) Limited (“AHM” or “the Company”) mainly provides the services of equity brokerage which is also the primary source of revenue for the Company. The rating incorporates the sound business understanding of the primary sponsor having a sound financial profile. The presence of an independent insight may strengthen the governance framework. AHM has an experienced management team capable to serve clients in a good manner. Forming an independent compliance function and separate risk management may align the internal control framework with the best practices. AHM provides the facility of an online trading platform; however, the formation of a research department may further enhance the level of client services. AHM reflected a significant improvement in the topline during FY21; however, FY22 remained a lackluster year for the market. AHM managed to curtail the decline in topline at ~15% as compared to a decline of ~36% in the market volumes during 1HFY23 while markup on deposits supported the bottom line to remain in profit. The uncertainty prevailing in the equity market amid ongoing political tension may have an adverse impact on the top line in the future. The rating remains dependent on AHM’s ability to sustain and improve its financial profile.

About the Entity
Legal Structure Private Limited
Year of Establishment 06-Jan-05
Type of License Trading and Self-clearing
Majority Ownership Mr. Adam Haji Muhammad (~99%)

Regulatory Disclosures Analyst Applicable Criteria Related Research
Afnan Iqbal

Methodology | Broker Fiduciary Rating | Jan-23

Sector Study | Brokerage & Securities | Jan-23

Disclaimer This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA. The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.