Swiss FX Brokers Report Profit in 2013 Half Year Results

Switzerland’s leading FX banks, MIG Bank and Dukascopy Bank have issued their current results for the first six months of 2013. The firms are in line with the overall positive consensus witnessed across the broking sector.

MIG Bank reported consolidated profit at CHF 1.3 million (US $1.46 million). The bank reported CHF 20 million ($21 million) in its trading related activities. On the other hand, Dukascopy Bank saw profits exceed CHF 2.2 million ($2.4 million) and the firms trading related income crossed CHF 15 million ($16.2 million).

CEO of Dukascopy, Alain Broyon spoke about the results in a statement to Forex Magnates:“Dukascopy Bank is satisfied with its results for the first semester of 2013. Clients' deposits have increased by 14%, income is up 6% compared to the first semester of 2012. Above all, our activities remain steadily profitable with CHF 2.2 mios of half year net profit (at a consolidated level of which CHF 2.0 mios for Dukascopy Bank) for the first semester which is above comparative figures. Operating expenses are well under control despite our strong developments in terms of foreign locations, products and technology. As a matter of fact, Dukascopy Bank has obtained a Securities Dealer license and will offer CFDs very soon. Also it has released innovative technologies (Visual Forex, Jstore, etc.) and has enriched its community with new attractive resources.”

Growth through products and offices

Both firms have been expanding their global footprint across Europe and Asia. MIG Bank established its UK office in May 2012. Earlier this year MIG Bank officially opened its Hong Kong subsidiary.

Dukascopy recently announced the launch of its CFD product range, thus opening doors to a new class of investors. Dukascopy Bank will offer around 140 non-listed CFDs based on major stocks, indices, bonds and commodities including precious metals, energy and soft commodities. Most of their CFDs will be spot however the Geneva based broker will also offer CFDs based on futures contract (futures on commodities and indices).

The bank intends to develop its product range and it said that the number of instruments will grow progressively reaching around 250 instruments. Mr Broyon commented about the product extension to Forex Magnates saying : “We expect the new products to make Dukascopy's trading platforms more attractive and competitive for our clients and white label partners.”

The FOMC

This week, the markets have been centred on the Federal Reserve minutes (FOMC), where traders were on the lookout for the Feds ideology on tapering. However, like with any announcement, the market factored in the ‘expected’. William Nicholls, a dealer at Capital Spreads said: “We have learnt what we did, which was absolutely nothing.”

The Fed minutes gave indication about what to expect in relation to the government's bond buying program, interest rates and overall view on the economy. Naveed Siddiqui, Co-CEO of Mathamax Markets said: "The build up at the FOMC was significant and recently we saw some rapid moves in the market, but the question is will the markets ever recover this year?"

Volatility, volatility and more volatility

Markets have been plagued by sharp moves across multiple instruments over the last 8 months, the AUD, JPY and Indian rupee have been on the back burner with the rupee deprecating 15% this year to date against the greenback. In addition, gold has seen massive declines on the back of improved trading conditions in equities markets. Sunil Mangwani an FX strategist from FibForex commented about trading conditions for 2013: “Market volatility has been driving volumes in the markets, and 2013 has been pleasant so far, hopefully the fed tapering will maintain the much needed charisma."

Apart from emerging market currencies the euro is believed to be an interesting trade for investors. Saxo Bank’s Co- CEO and Co- founder Lars Seier Christensen said in a statement: “The euro in my view is a failed project, but it is actually a good currency from a trading point of view. It aggregates a lot of Liquidity compared to the old days when you had a lot of underlying currencies in what is now the Eurozone.”

Profits and volumes have been on the up in 2013, and if volatility prevails we expect the second half of the year to experience similar patterns of growth.