I want to draw your attention to social trading, as per my research, Phillip has not engaged in this practice from any of its offices or subsidiaries, the US retail market is quite mature with initiatives such as, auto, algo and social trading being quite common, how do you foresee this approach?
During the first phase of our launch, we will focus on performance and client support. Hence, we will not be offering social trading at this initial stage. Social trading seems to be a very popular phenomenon, similar to the concept of crowdsourcing. Since there is safety in numbers, I understand the appeal of social trading for customers who are new to trading. However, I am also cautious about the regulatory aspect of social trading, because the person making the trade may not be licensed. In the event of a losing trade, who will the customer blame? As social trading is still in its infancy, I want to gain a better understanding of the market and social trading more before making a commitment on whether or not to offer social trading.
The global FX markets have been gradually slimming down in terms of daily trading volumes, despite the BIS survey showing growth from thee years earlier, major inter-dealer venues have seen volumes drop significantly, participants view the low volatility in the markets as a concern, what is your view of the global Forex market in light of the lower volatility and the decline in volume?
The current low volatility in the market and decline in Forex volume in the US does not concern us, because we are long-term players and we know that Forex will remain an important asset class over the long-term. Our view is that the retail Forex market is only in its infancy and will take off in a much bigger way given the liquidity, product simplicity and globalization.
The group has been up and running since the 70’s, you mention longevity as a key component of the firm, please tell us how Phillip Futures USA been performing? What is your view on the company’s performance during such a difficult time in the market?
In the last year, we have grown our customer base and extended our futures service offering to include TTNET and increase our access to more futures markets like TFEX (Thailand) as well as Bursa (Malaysia). We have also begun work to become a self-clearing broker dealer in 2015.
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Similar to other competitors in our industry, short-term profitability has taken a hit from a year ago largely due to the collapse of major commodity brokerage firms, such as MF Global and PFG and the low interest rate environment. We foresee further consolidation of the market due to these factors.
Phillip is certainly an interesting brand with an abundance of activity, but what’s next for you as a group?
The PhillipCapital mantras are distribution and truly being a partner in finance with customers. Most recently, PhillipCapital expanded into micro financing in Cambodia, purchased a life insurance company in Thailand and expanded brokerage business in numerous ways. Historically PhillipCapital has grown organically and while it will continue to do so we are also on the look out worldwide for new opportunities that are in line with the company mantras.
Phillip USA certainly has the experience, expertise and know how to tackle the US market, however with its niche offering catering to the growing number of traders looking to explore emerging market currencies it has ample opportunity to fast track and replicate the success it has achieved in other markets, such as Singapore. The firm has a strong profile with over 3,500 employee, 900,000 clients, connectivity to 16 major exchanges and a diverse platform offering. Its FX offering has been equipped with all the tools and functionality traders require, Phillip will be offering competitive spreads, coupled with STP order execution to its liquidity providers, the firm will be offering the popular MT4 and caters to high-frequency traders through its co-location servers held in NY4.
The US market has seen its fair share of troublesome events when it looks at the vast changes that have affected its once thriving retail FX sector, although the number of traders is still high the sector requires a much needed make lift with the onboarding of Phillip USA. Forex Magnates believes that the US market will start seeing a positive come back over the next 12 months, the good news will come on the back of bullish sentiment in the equity markets, volatility in the global markets and a need to re-enter the highly speculative FX markets allows traders to earn from both rising and falling marks.