The trading volumes at Alpari in Russia and the Commonwealth of Independent States totaled $91.4 billion, which constitutes a decline of 5.6% month-on-month. The figure remains lower when compared to a year ago.
The Russian ruble debacle which started in the beginning of 2014 accelerated during the second part of the year, prompting a substantial reduction in the purchasing power of clients in the region.
Trading volumes in April 2014 totaled $107.7 billion which is 15% higher than this year. Taking into account the volatility factors, the decline in the business of the broker is apparent. While most of the industry is reporting much higher figures than a year ago, Alpari’s Russian and CIS business remains on a declining trend.
The month-on-month drop aligns with broad industry trends, with similar metrics reported by Japanese and U.S. listed brokers.
In April, the company announced a new project aiming to deliver the marketing of a new type of ECN account. Alpari has partnered with AMTS Solutions in order to launch the product.
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With the purchasing power of the Russia and CIS clients not recovering anywhere close to levels seen last year, the main risk to future trading volumes at the company is outside its direct control.
The outlook for the Russian economy is shifting and in recent months there are signs of improvement. A note by Barclays analyst Daniel Hewitt outlined that the stabilization of financial markets in Russia is leading to a rapid decline in inflation, which has been running at a rate of about 8% per annum in April-May 2015.
He proceeds saying that after Bank of Russia has already aggressively cut rates from 17% in December 2014 to 12.5% currently, the appreciation of the Russian ruble could prompt it to do more.
“We think the CBR policy rate will be below 10% at end-2015,” he concluded.
Should this scenario materialize, purchasing power of clients in the region will be on its way to recovery and a bounce in trading volumes later in 2015 is to be expected.