AvaFX, a Forex market maker, reported its financial results yesterday as part of its parent company – Clal Finances – public report to the Tel Aviv Stock Exchange. AvaFX is an offshore entity registered in BVI and managed by several Israelis.
A few days ago I mentioned that there aren’t any public Forex companies reporting their statements in detail. One exception is FXCM which publishes bits of financial information and Saxo Bank with little useful information as well.
Now we are able to see much more than that due to the public reporting of Clal Finances which owns approximately 33% of AvaFX. Two of the founders Emanuel Kronitz and Negev Nosatzki own approximately 28% each. The AvaFX holding company also holds 3 subsidiaries in Israel, Cyprus and Ireland.
AvaFX reported revenues of $11.8m in the first quarter of 2009, almost tripling the revenues for the same period last year. The Company’s Net Profit was $5.7m – almost 48% – which is more effective than even FXCM’s results.
By the end of the period the company had almost $30m in cash and equivalents, which raise the question why wouldn’t the company register with NFA? The answer may be because an increasing number of Forex companies are fleeing the US due to NFA requirements (ODL, ACM, Hotspot and I-Trade to name a few.
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Another interesting figure is that AvaFX spent some $3.5m on marketing in that quarter – that’s 57% of its expenses. AvaFX is known for its aggressive marketing and internet omnipresence just like FXCM and this allows me to estimate that FXCM spent around $90m in 2008 on marketing alone.
What’s even more amazing is that with reported volumes being 1/25 of FXCM’s the company achieved 1/6 of FXCM’s revenues – pure market making was never more profitable…
For your interest full financial statement is embedded below.