The Lanka Rating Agency (LRA) has assigned WealthTrust Securities Limited an Initial Entity Rating of A- with a stable outlook.
WealthTrust Securities Limited (WTSL) commenced operations in 2011 as an authorised standalone Primary Dealer (PD) appointed by the Central Bank of Sri Lanka. As a PD, WTSL deals in Government Securities, including treasury bills and bonds, in both primary and secondary markets, and adeptly navigates market risks associated with interest rate fluctuations.
The company’s recent rating underscores its robust capitalisation, significant increase in profitability and profit retention along with aprudent risk management framework. Additionally, WTSL operates as a licensed stock dealer (debt) and stockbroker (debt) under the Securities and Exchange Commission of Sri Lanka, a company spokesman said.
The company recorded a Capital Adequacy Ratio (CAR) of 43.01% for FY24, significantly exceeding the statutory requirement of 10%. By investing 90% of its assets in Government Securities, WTSL minimises credit risk, though it remains exposed to interest rate fluctuations.
The company’s strategy includes rebalancing its portfolio between short-term and long-term Government securities to mitigate these risks effectively. In FY24, WTSL appointed Ernst & Young (E&Y) as its external auditors.
Recent financial performance has been exceptional, driven by substantial gains from high-yielding bonds following a sharp reduction in interest rates.
The company’s future success hinges on its active trading strategies on its portfolio by capitalising on interest rate movements, maintaining and strengthening its market position as a non-bank PD, while preserving its capital cushion and implementing effective portfolio rebalancing and governance practices.
