FXCM Delays Sale of Key Asset Stakes as Revenues Per Million Rise to $80

FXCM has continued to hold its key assets, stating that it could get higher price in the future.

FXCM released today its latest quarterly earnings and the figures have been upbeat with revenues per million rising to $80, which is higher by 11 per cent when compared to last quarter. With the number progressively increasing in recent quarters, the revenue stream for FXCM increased in line with it to $69 million, which is higher by 16 per cent when compared to Q2 2015.

Retail trading revenue per million increased from $72 marked in Q1 2016 and $54 in the second quarter of 2015. The metrics have completely turned from a year ago, marking the highest level since FXCM has switched to an agency model of operation back in 2014.

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FXCM
FXCM, Retail revenues per million traded. Source: FXCM

Despite the decrease in trading volumes on an annual basis, the increasing number of smaller clients of the brokerage which are using the dealing desk offering increased from 19 per cent to 21 per cent when compared to the first quarter of 2016.

The retail trading volume totaled $842 billion for the second quarter, which is lower by 15.8 per cent from Q2 2015. The number of tradable accounts has increased by 4,143 or 2.5 per cent to 171,507 since the end of the first quarter of 2016.

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FXCM
FXCM, Key assets for sale, Source: FXCM

The company highlighted in its earnings presentation that the non-core assets that it is looking to sell are expected to realize a higher value in the future. This is probably the reason why FXCM has not been in a rush to sell its stakes in FastMatch, Lucid and V3 Markets.

FXCM Inc holds a 50.1 per cent majority stakes in Lucid and V3 Markets and a 35 per cent stake in a joint venture with Credit Suisse which is behind one of the fastest growing institutional trading venues in the industry in the past months, FastMatch.

While it hasn’t disposed off its stakes for now, the company stated in its earnings presentation that FXCM is committed to selling the remainder of its non-core assets. It is already actively marking those to prospective buyers, but the expectations that a sale would yield a higher value in the future is preventing the company from taking quick steps.

Both FastMatch and Lucid have had a great month in June with FastMatch processing a record number of transactions following Brexit, while Lucid had its best trading month since August 2015.

Following the market open in New York, shares of FXCM trader higher by 15 per cent, but have since given back a substantial portion of the gains to trade at $9.77 per share, or 3 per cent higher on the day.

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