PACRA Maintains the Broker Management Rating of Optimus Capital Management (Pvt.) Limited

Optimus Capital Management (Pvt.) Limited ('OCM' or the 'Company') primarily focuses on Equity brokerage services while advisory services and block trades services are also provided. FY24 was a favorable period for the brokerage industry, with the KSE-100 Index reaching historic highs and surpassing the 81k mark for the first time in June 2024. This milestone attracted significant interest from both local and foreign investors. Additionally, the continuous reduction in the headline inflation, and decrease in policy rate, is likely to drive fresh investments as investors shift their focus from fixed-income securities to equities. While FY24 results were promising for the brokerage sector, maintaining political and economic stability will be crucial to sustaining investor confidence in FY25. The Optimus Capital Management is entirely owned by Optimus Holdings (Pvt.) Limited, with Mr. Jawad Amjad holding an 74% stake and Mr. Yasin owning 26% of the shares in Optimus Holdings (Pvt.) Limited. The company's board structure consists of a single executive director, and there is a need to expand the board size for better governance. The Company has a lean organization structure with a qualified and experienced management team. Mr. Syed Ayaz Ahmad has now been appointed as the new CEO of the company. Mr. Ayaz has more than 1 decade of experience in Pakistan’s financial sector with expertise in economic and investment research. The rating also takes note of a sound customer relationship and IT infrastructure. A well-developed research department is in place to provide the clients with the necessary research services. The company reported a revenue of ~PKR 162mln during FY24. The revenue mainly stems from brokerage income which stood at ~PKR 98mln at the end of Jun'24 (SPLY: ~PKR 70mln). OCM does not engage in proprietary investments, thus limiting the impact of market risk. The rating draws comfort from the zero leveraged capital structure; the Company has an adequate equity base of ~PKR 318mln at end Jun'24.
Going forward, it is imperative from a ratings perspective to maintain topline growth, revenue diversification, and profitability. Maintenance and improvement in market share remains important. The inclusion of independent representation may be considered to strengthen the governance framework. Moreover, retention of key management personnel and further separation of management roles remain critical.

About the Entity
Optimus Capital Management (Pvt.) Limited holds the Trading Rights Entitlement Certificate from the Pakistan Stock Exchange and licensed by the Securities & Exchange Commission of Pakistan. Previously known with the name of Millennium Capital Management (Pvt.) Limited, the Company was incorporated in 2004 and the name was changed to Optimus Capital Management (Pvt.) Limited in 2011. Optimus Capital Management (Pvt.) Limited is a wholly owned subsidiary of Optimus Holdings (Pvt.) Limited. Mr. Jawad Amjad holding an 74% stake and Mr. Yasin owning 24% of the shares in Optimus Holdings (Pvt.) Limited. The sponsors possess more than ~20 years of the financial market related experience. The board is comprised of only one executive director Mr. Syed Ayaz Ahmed.