Kabu Sees Lowest Monthly Revenues in Over Three Years

It's unclear as to what caused the slump for the Japanese retail broker

Retail broker Kabu released its preliminary financial results for January of 2019 on Tuesday. The broker, which is owned by the Mitsubishi UFJ Financial Group, saw a steep decline in revenues last month.

In terms of commission fees, the broker managed to rake in 461 million yen ($4.17 million) last month. That was the lowest level of revenue, in a one month period, that the firm has generated from broker fees since at least 2016.

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For the five months prior to January, the firm averaged 619.6 million yen ($5.61 million) in brokerage fee-based revenue.

The slip in brokerage fee revenue wasn’t due to a decline in trading belonging to one specific asset class. In fact, brokerage fees declined fairly evenly across the different instruments that Kabu offers to traders.

For example, revenue derived from equities trading declined to 209 million yen ($1.89 million). That was a nearly 33 percent decline on the 301.6 million yen ($2.73 million) in equities trading-based revenue that the firm averaged each month in the prior five months.

Market making also down

Market making, generally the firm’s largest source of revenue also slumped drastically last month.

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The firm reported total revenue from its market-making activities as 595 million yen ($5.38 million) in January.

That was a 242 million yen ($2.19 million) decline on December and substantially less than the 783.8 million yen ($7.1 million) that the firm averaged in the prior five-month period.

Unsurprisingly then, net operating revenues, which totaled 1.23 billion yen ($9.26 million), also slipped.

That was 441 million yen ($4 million) less than December, and also much less than the 1.6 billion yen ($14.5 million) which the firm averaged over the prior five months.



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