PACRA maintains Broker Management Rating of Optimus Capital Management (Private) Limited

Lahore, September 25, 2023 (PPI-OT): Optimus Capital Management (Pvt.) Limited ('OCM' or the 'Company') has a reliable presence in the corporate advisory space. Leveraging its market renown, OCM has supported its equity brokerage operations through revenue from advisory services and block trades. As a result, the low market volumes prevailing for the past two years have had minimal financial impact on the Company's performance. Currently, a small board comprising two executive directors exists; however, the planned inclusion of an independent director during the next board elections will enhance the governance framework moving forward. The management team comprises seasoned professionals that ensure the sound quality of services.

The rating draws strength from the experienced profile and strong business acumen of the CEO and primary sponsor, Mr. Asif Ali Qureshi, who has been associated with the capital markets for over 25 years and is the current president of CFA society of Pakistan. The Company has a lean organizational structure. An in-house internal audit department is present to provide internal control support. The separation of key management roles such as risk and compliance has further enhanced the control framework. 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. A dedicated database management group company is present, reinforcing the research quality. OCM has added a dedicated online sales department whereas a customer services department is also currently being developed, further enhancing the Company's client services.

Market risk is minimal as the Company does not actively partake in proprietary trades. Despite market volumes decreasing by ~33% during FY23 when compared with FY22, OCM's topline decreased by ~14% during the same period due to a significant contribution of ~PKR 57mln from advisory income. However, equity brokerage income declined by ~48% during FY23 when compared with FY22, due to a combination of low market volumes and decrease in commission rates by the Company to remain competitive. The rating draws comfort from the Company's zero-leveraged capital structure. OCM's strategy to leverage its presence in cyberspace to attract retail clientele may boost equity brokerage income moving forward.

Going forward, it is imperative from a rating perspective to maintain topline growth and revenue diversification. Maintenance and improvement in equity brokerage market share is critical moving forward. Moreover, retention of key management personnel, enhancement of client services, and further separation of management roles remain important.

For more information, contact:

Analyst,

The Pakistan Credit Rating Agency Limited (PACRA)

Awami Complex, FB1, Usman Block New Garden Town,

Lahore, Pakistan

Tel: +92-42-5869504-6

Fax: +92-42-5830425

Email: hammad.rashid@pacra.com

Website: www.pacra.com

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