TRIS Rating affirms the company rating on TSFC Securities PLC (TSFC) at ?BBB? with a ?stable? rating outlook. The rating reflects the company?s moderate business position, strong capital, leverage, and earnings assessment, strong risk position, and manageable funding and liquidity profile.
KEY RATING CONSIDERATIONS
Moderate business position
The company?s business position is supported by its unique role as the only securities finance company (SFC) in Thailand with missions to provide liquidity for securities firms and to act as a supporting arm to help with the development of Thai capital markets.
TSFC?s business stability is determined by the nature of its business, which concentrates on margin lending. Its business volume and revenue tend to move in tandem with the stock market performance and investor demand. For instance, at the end of September 2020 outstanding margin loans stood at THB2.6 billion, a 30% drop from THB3.7 billion at the end of December 2019. This was due to the stock market plunge and investor risk-off sentiment induced by the Coronavirus Disease 2019 (COVID-19) pandemic during the second and third quarters of 2020.