Press Release

VIS Upgrades Entity Ratings of Topline Securities Limited

Karachi, March 19, 2021: VIS Credit Rating Company Ltd. (VIS) has upgraded the entity ratings of Topline Securities Limited (TSPL) to ‘A/A-2’ (Single A/A-Two) from ‘A-/A-2’ (Single A Minus/A-Two). The long term rating of ‘A’ signifies good credit quality with adequate protection factors. Risk factors may vary with possible changes in the economy. The short term rating of ‘A-2’ depicts good certainty of timely payment where liquidity factors are sound and good access to capital markets. Outlook on the assigned ratings is ‘Stable’. The previous rating action was announced on April 24, 2020.

Ratings upgrade takes into account TSPL’s conservative operating model as indicated by low leveraged capital structure and limited exposure to credit and market risk given high proportion of Institutional Delivery System trades in overall volumes and small proprietary book size. The change in ratings also reflects improving trend in profitability and sound liquidity indicators of the company vis-à-vis peers. Cyclical nature of the brokerage industry continues to remain a key risk factor.

Performance of the brokerage industry is closely linked to the performance of the domestic capital market, which in turn is dependent on overall economic cycles. Performance of the equity market was dismal during FY18 and FY19 with dwindling trading volumes largely owing to economic slow-down, increasing interest rate environment and aggressive foreign selling. COVID-19 pandemic further exacerbated the situation and eroded significant value of PSX till March 2020. However, with ease in COVID-19 lockdown, economic recovery has translated to improved volumes of PSX, which are expected to support performance of the brokerage industry over the medium term.

Operating profitability of the company has depicted improvement on account of increase in operating revenue and controlled growth in expenses. Efficiency ratio (cost to income) of the company is the one of the lowest among its peers. Given the low leveraged capital structure, capitalization indicators are considered sound. Liquidity profile of the company is also considered strong in view of the sizeable liquid assets in relation to total liabilities. Going forward, improvement in financial performance relative to peers and maintaining a conservative risk profile are considered key rating sensitivities.

For further information on this rating announcement, please contact Mr. Narendar Shankar Lal (Ext: 203) or the undersigned (Ext. 306) at 021-35311861-70 or email at

Faryal Ahmad Faheem
Deputy CEO

Applicable Rating Criteria: Securities Firm Ratings (July 2020)

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.VIS , the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report.VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2021 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

VIS Credit Rating Company Limited