Compagnie Financière Tradition 2013 Annual Report: Japanese Retail FX up by 17.6%

Swiss inter-dealer broker (IDB) Compagnie Financière Tradition (CFT) has issued its annual report for 2013, detailing some extra regional figures and providing some additional information about its FX business. The firm reported $993 million (CHF 874 million) in revenues for 2013, which is lower by 8.8% in current currencies. The revenues from its retail FX trading business in Japan (non-IDB) has grown by 17.6% at constant exchange rates.

That said, the company announced that the first quarter of 2014 has not been positive for its Japanese retail FX unit, however that didn't stop it from fully acquiring Meitan Tradition Co. Ltd.

According to the document the majority of the firm’s business is conducted through its London office, which was responsible for 35.6% of adjusted consolidated revenues in 2013 (including Middle East and Africa operations). The company stated that while numbers have dropped in interest rate and fixed rate products, commodities, equities and Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term have gained traction in 2013 with the launch of ParFX, which recently gained additional popularity as the order randomization technology that it uses was considered to be used across other asset classes to combat high-frequency trading (HFT).

In contrast, the firm’s Asia-Pacific inter-dealer broker business has reported lower figures in Forex, while equities and commodities have compensated for the decline to be the slowest of all regional operations, declining by mere 0.7% in fixed currency terms and representing 24.1% of the CFT’s revenues.

Looking at the company’s business across the Americas, the firm reported income from interest rate Swaps Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Read this Term rising, while fixed rate products and equities parts of the business have declined. The company’s operations in this region have totalled 29.5% of adjusted consolidated revenue, which is a nudge higher than in 2012.

Looking ahead the company expects more regulatory challenges mainly related to the European part of business, while the adjusted underlying operating profit excluding exceptional costs amounted to about $68 million (CHF 60.0m), which is up by 8.2% in constant currencies with the operating margin reaching 6.4%m, which is higher than last year’s figures. CFT’s operating profit totalled to about $36 million (CHF 32.1 million), which was lower by 9.3% when compared to 2012.

Going through the report it appears that looking ahead the company will focus on expanding its business in the Asia-Pacific region where it is concentrating a vast amount of resources. This has been confirmed by the latest announcement yesterday that Tradition has fully acquired the remaining stake in Meitan Tradition Co. Ltd. from Japanese company Central Tanshi. The firm boasts a solid balance sheet with $81.5 million (CHF 74.9 million) in cash and cash equivalents.