PACRA maintains Broker Entity Rating of Aba Ali Habib Securities (Pvt.) Limited

Aba Ali Habib Securities (Pvt.) Ltd. (“AAH” or “the Company”), is a premier brokerage house and integrated financial services provider in Pakistan’s capital markets. The rating underscores AAH’s entrenched market positioning, diversified revenue streams, and prudent risk-adjusted investment strategy, which continue to drive outperformance amid dynamic equity market conditions. AAH operates a multi-asset class platform, delivering equity brokerage, commodity trading, debt market, IPO and Margin Financing System/MTF (MFS/MTS) services to a diversified client base, including institutional investors, corporates, high-net-worth individuals (HNWIs), RDA and retails. The firm’s adherence to fiduciary excellence, coupled with its client-aligned advisory framework, reinforces its reputation as a trusted intermediary in Pakistan’s capital markets. FY24-FY25 witnessed a structural shift in investor behavior, driven by attractive equity valuations (subdued P/E ratios), a monetary easing cycle, and improving macro fundamentals. This catalyzed a ~46% YoY surge in market volumes during 1HFY25, with AAH capturing alpha through a ~51% YoY rise in equity brokerage revenue (1HFY25: PKR 59mln vs. SPLY: PKR 39mln). Strategic portfolio allocation balancing equity and fixed-income exposures supported risk-adjusted returns, while MFS/MTS and dividend income contributed PKR 84mln and PKR 16mln, respectively, underscoring revenue diversification. AAH posted a transformative net profit of PKR 359mln in 1HFY25 (vs. PKR 56mln SPLY), propelled by realized capital gains (PKR 82mln) and marked-to-market gains (PKR 188mln) from its actively managed investment book. The Company’s equity base remains strong at PKR 1,634mln (Dec’24), ensuring ample capital adequacy to absorb market volatility while pursuing growth initiatives. While AAH benefits from seasoned leadership and a lean operational structure, PACRA emphasizes enhancing board independence through certified directors to bolster governance rigor. The recent Lahore branch launch aligns with AAH’s retail penetration strategy, though execution risks around geographic diversification and market share retention (amid industry consolidation) warrant monitoring. Sustained profitability, disciplined risk controls, and talent retention remain critical to rating stability.
Looking ahead, the realization of projected revenue synergies, continued market share enhancement, and sustained profitability remain paramount. Concurrently, stringent internal controls, retention of key management personnel, and vigilant risk management practices will be crucial in reinforcing AAH’s long-term growth and credit profile.

About the Entity
Aba Ali Habib Securities (Pvt.) Limited, a TREC holder of the Pakistan Stock Exchange and a member of the Pakistan Mercantile Exchange, was founded in 1996, although its operations trace back to 1970. The company is predominantly owned by Mr. Aba Ali Habib, who has over 40 years of experience in equity brokerage. AAH's board of directors comprises six members, three of whom are non-executive, including one independent director, Mr. Munir (CA), and the CEO, Mr. Zahid Ali Habib, who brings extensive expertise in capital markets. The company is registered with the Securities and Exchange Commission of Pakistan (SECP) under the Securities Brokers Regulations 2016.