FXCM and Gain Capital announce Q1-2011 results
FXCM and Gain Capital announce explained by professional Forex trading experts the “FXCM and Gain Capital announce” FX trading team.
FXCM and Gain Capital announce
Our key takeaways from the results announcements and analyst calls?
The growing importance of Asia. Asia now represents the largest retail market for both FXCM (42% of volume in Q1) and Gain (48%!!!) – and for Gain especially this is a huge shift, as it until now did more than half its retail volume in the US. Clearly, these (and other) firms are making a huge push in emerging markets generally and in Asia specifically, as “traditional” markets in the US and Europe mature. Longer term, aside from the nice near-term results these firms are seeing in Asia, firms are beginning to jockey for position in China, which remains the “holy grail” of the retail Forex world and potentially its largest market. However, we believe that the Chinese – despite some signs of opening such as allowing Yuan options trading (but not spot), allowing firms such as Gain to open representative offices and engage in certain activities with institutional and bank clients (but not retail), and licensing foreign banks (most recently BMO) to make markets in Yuan options – are still far away from allowing foreign firms to take Chinese retail client money, or from allowing margined spot Forex trading.
Customer Equity growth. The key (and most impressive) number for both FXCM and Gain? Customer Equity. At FXCM it is now $775 million – up by more than 100% from year-end 2009 ($354 million), and at Gain it is $283 million (or $307 million, adjusted for the post-quarter dbFX and TradeStation transactions), up from $197 million at year-end 2009. Long-term, the ability to keep attracting new clients and new client funds is, in our view, the best predictor of long-term success in the Forex business. Some of that growth at both firms has been via acquisitions – most notably FXCM, where GCI Capital Japan has added $114 million and ODL $163 million to client assets – but much of the growth has also been organic.
FXCM and Gain Capital announce Conclusion
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