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Press Releases / 04.07.2013
Press Release as of 04.07.2013 Spectr Invest LLC CJSC AK&M Rating Agency affirmed the credit rating assigned to investment company Spectr Invest, LLC at ‘B++’ as per the national scale. The outlook is positive. The ‘B++’ rating indicates that Spectr Invest, LLC qualifies as a sufficiently reliable borrower (the highest sub-grade of the ‘B’ grade). Risk of a delay in meeting liabilities is moderate, restructuring risk for a loan / part of a loan is insignificant. The key positive rating driver for Spectr Invest, LLC is its strong financial performance in 2012 and the first quarter of 2013. The Company’s net profit for 2012 totaled RUB 8.755 million against a loss of RUB 18.414 million in 2011. Also, Spectr Invest, LLC increased its net earnings from almost all business activities except for asset trust management services. In particular, net income from the Company’s own portfolio grew more than 3 times, earnings from brokerage and custody services increased by 29.5% and 58.1%, respectively. The total business turnover increased almost twice (from RUB 279 billion to RUB 501 billion). The company’s net profit for Q1 2013 was RUB 3.384 million, i.e. almost 40% of the whole previous year’s result. Spectr Invest, LLC maintains high activity in the key business segments. The total amount of its transactions on the Moscow Exchange and off-exchange deals reached RUB 94.8 billion, not much below the previous year’s result (RUB 112.4 billion). We also appreciate the traditionally strong liquidity position owing to the well-structured assets as a positive rating driver. On April 1, 2013, the Company’s absolute liquidity ratio was 0.64, currentl liquidity ratio was 1.33. The rating of Spectr Invest, LLC is additionally supported by its extensive experience and high proficiency of its top management team. Most of its senior executives have been specializing in stock markets for more than 10 years.
At the same time, the negative trends in returns from the Company’s operations under trust management contracts and a reduction in the amount of funds raised from investors are working against its rating. The Company’s financial assets in the trust management segment have decreased by two-thirds, the number of contracts by 30% since 2010. The total volume of trade dropped more than 5 times. Besides, the Company’s management activity has not been profitable for more than two years, partly because of the aggressive mindset of some of its customers encouraging portfolio managers to make investment decisions entailing unreasonably high risks. As a result, net income of Spectr Invest, LLC from asset trust management services decreased more than four times to RUB 0.50 million in 2012 from RUB 2.68 million in 2011. As far as risk-bearing financial instruments are concerned, the company’s operational efficiency is not nearly immune to the high volatility in stock markets, only partially offset by the steadily positive return on the custody and brokerage services and the company’s trust management fees – which is another generally negative signal for the company’s rating.
Spectr Invest, LLC has been active in the securities market since 2003. The investment company possesses perpetual licenses for professional brokerage, dealing, custody, securities management services, and an exchange intermediary license for commodity futures and options transactions in the exchange market. In 2012, Spectr Invest, LLC ranked 17th largest Russian investment company in the total turnover. The company’s auditor is BAKER TILLY RUSSAUDIT.
This press release is based on the statement of assigning a credit rating to Spectr Invest, LLC. The credit rating, along with any information and conclusions provided in this press release, only conveys our opinion on the Company's reliability and shall not be considered as advice on the purchase and sale of securities or the provision of loan facilities. CJSC AK&M Rating Agency will not incur any responsibility for any interpretations, inferences and consequences related to the application of results of the rating estimation procedure by any third parties. CJSC AK&M Rating Agency is a leading independent national rating agency engaged in rating activities since 1993. CJSC AK&M Rating Agency is accredited by the Ministry of Finance of the Russian Federation (order no. 452 as of September 17, 2010). AK&M Ratings are recognized by the Central Bank of Russia (for providing unsecured lending facilities – Regulation 323-P), Vnesheconombank (for granting subordinated loans) and SME Bank (for its program of lending to SME businesses), RUSNANO (when selecting banks to provide cash and settlement services to project and engineering companies implementing investment projects), and the MICEX (for the Corporate Bond Index / MICEX CBI and Municipal Bond Index / MICEX MBI calculation and bond listing purposes). By a resolution of Russia’s Government AK&M Ratings count for the recapitalization of banks. Besides, AK&M Rating Agency is recognized by AHML and accredited by SRO National Securities Market Association.
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