GMO Click, a leading international financial services firm, with its headquarters in Japan, has reported its consolidated financial results for the third quarter ended March 2014. The firm saw an overall increase in income showing profitability during a drop in trading volumes during the same period.
Operating revenue was up ¥15.9 billion from ¥12.3 billion from a year earlier, an increase of 28.3%. The firm also saw dramatic growth in net operating revenue with an increase of 26.8% reaching ¥15.06 billion from the quarter. GMO Click’s operating income was ¥4 billion, up 11% with net income for the quarter up by 14% at ¥2.58 billion.
Across the board FX brokers have reported strong growth figures for 2013, GAIN Capital, a leading listed broker saw earnings up for the third quarter, net income was $4.7 million up 42% YoY. London-based IG, released its second half-year results ending 30th November, 2013, the firm saw net trading revenue increase by 8% at £182.7 million.
Japanese Brokers in Pole Position
The first half of 2013 was the year for Japanese brokers with several brokers crossing record levels, volatility in the Japanese yen coupled with BoJ’s policies to stabilize the world’s third largest economy’s currency were taken fairly by traders.
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In June 2013, GMO Click’s monthly volumes topped the $1 trillion mark, the broker reported monthly volumes of $1.104 trillion.
However, during the latter stage of the year the positive trading volumes dropped significantly, in November 2013 GMO Click reported monthly volumes at $520 billion, a drop of 14% from a month earlier and the lowest monthly figure for 2013.
The Japanese FX market has seen significant changes in its operating landscape, both from a regulatory and business point of view. Immediately after the leverage changes that took place in 2010 and 2011 the market was believed to be under the radar and its position as the most established and largest retail FX environment would be compromised. However, a favorable global environment for the ‘Mrs Watanabe’ (Japanese housewife traders) has meant a strong revival in the country.
A weak yen is preferred by Japan as it not only boosts the economy but fuels the stock market with major players exporting their products and services to Europe and the US, Japanese traders are believed to hold net short yen positions.
GMO Click has been expanding its international footprint with regulated offices in Hong Kong, in addition it has put forward its application to operate as a broker in London under the Financial Conduct Authority. The firm recently announced that it was extending its Hong Kong operations to cater to the large bullion market.
The current financial markets trading environment is believed to be stabilizing since the gloom of the 2008 global recession with equity and bond markets seeing a recovery, the US benchmark index, DJIA (30 largest US stocks) crossed the formidable 16,000 mark and hit a fresh high of 16,588.20. This could have an impact on the FX and commodity markets with investors pulling funds back into the securities sector thus impacting trading activity for firms operating in the FX markets.