AxiCorp Tackles Dire FX Market Challenges with Personnel and Liquidity Boost

AxiCorp Financial Services Pty Ltd, (AxiCorp), one of Australia’s largest electronic brokerages, recently announced that it has expanded its prime brokerage service to include KCG Hotspot. In a bid to put the news in context and keep our readers abreast of the latest developments, Forex Magnates is following up on the story by interviewing AxiCorp’s General Manager, Alex MacKinnon, about the company's strategy and future plans.

In the News

Last week’s announcement comes on the heels of several recent developments at AxiCorp – many of which of have been specifically focused on expanding and improving on its institutional offering. In early July of this year, AxiCorp launched its prime brokerage service branded under the name 'AxiPrime' and later supplemented the new venture by hiring Hans von der Recke as Head of Institutional Sales. Mr. von der Recke’s background is largely banking derived having worked for UBS, DRKW and most recently Commerzbank where he was Chief Dealer. With 37 years of FX market experience under his belt, Mr. von der Recke is expected to lead Axi’s institutional FX push globally with a specific focus on Asia – one of AxiCorp’s target markets. He will work alongside Geoff Last and Alex Mackinnon, based in Sydney, Australia.

“AxiPrime reflects our desire to be able to cater for large institutions as well as individual traders,” said Alex MacKinnon in an exclusive interview with Forex Magnates. He added, “AxiPrime helps to diversify the company’s income stream which helps to make the firm more resilient to low volatility market conditions." The likely focus for the new institutional unit is Asia where market saturation is very low and profit margins are higher compared to established markets such as Europe and North America.

A New Market

Mr. MacKinnon’s comments suggest AxiCorp is keen on filling a unique niche in the market being made available by traditional prime brokers leaving the industry. Termed ‘Prime of Prime’ brokerages, this new breed of prime broker has emerged to help retail aggregators offer tighter pricing and better execution by combining Liquidity , prime brokerage and aggregation services in a tailored fashion. It is rather difficult for retail aggregators to receive all the service and support they require from a traditional prime broker, which is why Prime of Primes have become so popular, so quickly.

AxiPrime officially opened its doors in the beginning of July with a low profile launch. The unit has since been bolstered via the addition of key personnel, bold strategic decisions and entering into key partnerships with technology companies and liquidity providers. Mr. MacKinnon confirmed, "AxiPrime will grow to include Currenex and FlexTrade within the next three months," having established agreements with Integral and KCG Hotspot already.

What about Retail?

When asked whether the new institutional push would affect AxiCorp’s existing retail clients, Mr. MacKinnon responded by saying, “Although the KCG partnership is focused on expanding the firm’s institutional presence, existing AxiCorp clients remain our top priority. They will all benefit as a result of a deeper liquidity pool which will grow further in the coming months." Mr. MacKinnon’s views on the wider FX market are also very upbeat – “The Australian market is very buoyant at the moment and is likely to sustain strong levels of growth according to our own numbers and metrics."

The recent developments at AxiCorp highlight an interesting industry-wide trend, as discussed by Forex Magnates in our latest Quarterly Industry Report (QIR) for Q2 2014. Due to a fast changing and incredibly competitive electronic trading market, companies that want to maintain healthy revenues within low volatility market conditions must find a way to diversify their revenue streams. Not only internally in terms of which types of clients they are catering to, but also geographically, as different regions evolve differently to a changing market environment. Technological innovation is also key as companies that have demonstrated an ability to offer something innovative or technologically superior to the wider market tend to perform better over time and are more resilient to periods of slow trading activity. AxiCorp has demonstrated to the wider market that despite tough market conditions weighing on trading volumes and commission fees, it is possible to sustain strong revenues via technological innovation and technical creativity.

In other news, AxiCorp launched a Russian language version of their AxiTrader website this week. The AxiTrader brand caters to individual retail traders using the popular MetaTrader 4 Trading Platform and will be a welcome addition for Axi's Russian-speaking clients.