Compagnie Financière Tradition Revenues Drop 5.8%, Japanese Retail FX Slumps
With the pace of revenues at the Swiss company dropping slower than a year ago, the company might have an
Swiss-listed major inter-dealer broker offering solutions in several asset classes Compagnie Financière Tradition has announced in a press release its revenue numbers for the first quarter of 2014. The company behind ParFX and FXDD has reported consolidated revenues totalling to $251 million (CHF 221.6m), which compared with CHF 235.3m for the same period in 2013 mark a decline of 5.8% at current exchange rates and 2.8% in constant currencies.
During the quarter the Group’s consolidated adjusted revenue using a proportionate consolidation method for joint ventures has totalled to just shy of $268 million (CHF 236.4m). Within that spectrum the company’s inter-dealer broking business (IDB) shrank by 2.7% in constant currencies, while Japanese retail forex business has dropped by 24.9%.
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The latter news are not a big surprise considering the lack of direction in the Japanese currency when compared to last year’s first quarter. Overall, while the company’s revenues keep shrinking year-on-year, the pace in the first quarter of 2014 has receded. With more major banks joining ParFX, some new market opportunities are opening ahead for Compagnie Financière Tradition.
The company’s ParFX solution was recently mentioned in media reports which viewed the technology behind it to be possibly applicable to reduce the advantages of high-frequency trading (HFT). The offering has already been successfully implemented in FX by randomising the book order flow, hence removing the advantages which HFT traders enjoy.
As of the publication of this material the company’s share price is trading flat on the day around CHF 47.60 with the revenue figures announcement not playing as a big surprise for investors at this point in time.
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I’m not surprised their revenues are falling – FX markets have died a death in the last few weeks. It’s as if all the volatility has suddenly left the market – and since volatility has been in gradual decline since 2007 this is worrying. However everyone I speak to (both retail & institutional) is noticing the way FX markets are just not moving… expect therefore to see more people leaving this market and more companies seeing declines in profit.
Last weeks trading range in the Euro was the smallest since its inception. Volatility doesnt appear to pick up either, 30-day implied is at an all time low, and summer is coming..
http://finance.yahoo.com/echarts?s=%5EEVZ+Interactive#symbol=%5EEVZ;range=2y
Still plenty of opportunities if you’re a pre-emptive trader — AUDUSD got slapped a big figure during the week n EURUSD had a couple of 50 pip moves — if you’re jobbing around 20 pips long n short on close to zero spreads there’s plenty of trades
@Jobber – EUR/USD has a 20 pip daily range today. For most of the London session it has been in a 3-5 pip range over any 15 min period. Please don’t talk nonsense about “plenty of opportunities”. FX hedge funds are losing money, profits on bank FX desks are down and many traders I’ve spoken to are seriously considering moving away from FX for good. There is a real problem here, and interestingly the financial press are not picking up on it…
A problem for who? I doubt people care about speculators. Personally i am doing way more in equity index and commodity trades now than in FX.
@Jon – it’s a risk every firm has when they play around with their code. In typical case, you have a web app like Facebook or Basecamp where the code for their products had become dated and required a rewrite which alienated groups of users. In this case, MQ forced a pseudo rewrite on a downloadable product since they weren’t getting much traction on MT5. So, rewrites are typical for products, but very rare in downloadable products.
@Jon – it’s a risk every firm has when they play around with their code. In typical case, you have a web app like Facebook or Basecamp where the code for their products had become dated and required a rewrite which alienated groups of users. In this case, MQ forced a pseudo rewrite on a downloadable product since they weren’t getting much traction on MT5. So, rewrites are typical for products, but very rare in downloadable products.
@Andy – A problem for the FX industry… and yes that’s my point: people of course will care when the fixed income and FX markets cease to function properly, causing massive cost increases to businesses and ordinary individuals. As for equities and commodities, yes many others are joining you – I was personally doing about 50 mio notional a day in FX, this month I’ve done zero. However I did enjoy selling silly amounts of US index futures yesterday. What commodities do you trade?
Basically only in the CL complex.