NEXT CAPITAL LIMITED
Following is the text of press release issued by
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Reaffirmation of ratings incorporates established and sustained market position of
Ratings are constrained by the current challenging operating environment where continued slowdown in GDP growth and increasing spread of Covid-19 may have an implication on brokerage sector's performance. VIS will continue to monitor operational challenges (along with associated settlement risk) as currently faced by industry in the backdrop of covid-19 and its consequent lockdowns.
Given the challenging operating environment, management has continued to focus on retail segment; the segment now represents around two-third of total brokerage revenue and has consistently increased over the last 3 years. On the corporate advisory front,
After two consecutive years (FY18 and FY19) of dwindling industry trading volumes (owing to economic slowdown, rising benchmark rate and aggressive foreign selling), brokerage industry has witnessed some recovery in the ongoing year. Recently revised brokerage commission structure (a standard range/scale implemented by SECP for all security brokers) and uptick in market volumes in the ongoing year would support profitability profile of brokers.
Nonetheless, profitability of players with large proprietary book (being exposed to market risk) along with reliance on corporate finance and advisory business may be impacted. In case of prolonged effect of pandemic on business activity and economic indicators, overall brokerage industry could also face severe adverse impact. Hence, the sector outlook remains challenging.
For more information, contact:Director Compliance and Rating Analytics,VIS Credit Rating Company LimitedVIS House, 128/C, 25th Lane off Khayaban-e-Ittehad,Phase VII, DHA,
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© Pakistan Press International, source
