Michael Walker is the Managing Director and Chairman of the board for BlackBull Markets. After graduating from Auckland University with a Bachelor of Commerce, Michael garnered experience in the industry as a propensity derivative trader for a local firm before founding BlackBull Markets in 2014.
Michael has always held a keen interested in the financial services sector and is intently focused on delivering an institutional experience for retail traders which has since become a focus for BlackBull Markets.
He joins LeapRate today to tell us how the company has been managing through this challenging period of global uncertainty and it’s future plans.
LR: Hi, Michael, and thank you for joining LeapRate today. BlackBull Markets is a relatively new brokerage. Can you first tell us more about it and the people behind it?
Michael: Hi Valentina, firstly thank you for letting me speak about all the exciting things currently going on in both our company and industry! It has been a fantastic adventure for myself and our rapidly growing team since we started in 2014 managing to get on the Deloitte fast 50 the last 2 years running and fingers crossed for this year as well as one of the fastest growing financial brokers in our region.
Our technology also managed to get us on the Deloitte fast 500 for APAC which reflects not only all of the hard work we have been doing down under in New Zealand but also our culture of innovation which Kiwi companies are well known for globally. From day one, it has been very important for us to have everything based in Auckland, New Zealand not only because most of our key people live here but we strive to provide that Kiwi experience to our clients.
LR: What is the primary focus of BlackBull Markets?
Michael: Our primary vision is to provide an institutional multi-asset and service brokerage to both retail and institutional investors giving them affordable market access, stability, accountability, and outstanding service from our FMA regulated New Zealand head office.
Michael: Our next steps are to continue to add products and platforms for our clients to trade. We have just soft-launched MT5 along with several hundred stock CFDs with an aim to have several thousand more CDFs by the end of the year. Further we are in talks with the New Zealand Stock Exchange to be licensed to provide direct equities via MT5, living up to our vision of growing into a multi-asset full service brokerage.
LR: How has BlackBull Markets been managing through this challenging period of global uncertainty around the COVID-19 pandemic?
Michael: Firstly we have been transparent with our clients on changes to the way our company needs to operate but luckily New Zealand hasn’t been too affected by COVID 19. We had a few weeks earlier in the year where everyone was working from home as a precaution but for the most part its business as usual.
Being regulated by the FMA and its minimum capital requirements of $1 million or 10% of client funds also gives transparent solvency assurance to our clients when markets move in unpredictable ways.
LR: What steps has your company been taking to address the myriad concerns of clients, employees and partners around safety, platform stability and risk mitigation?
Michael: Following on from the previous question as having a regulated entity from an OECD country along with the minimum capital requirements, our client funds are held in ANZ Bank which is a AA rated institution and the largest Australasian bank. Along with that, our team and clients understand that our cashflow forecasts have been provided and up to standard with the FMA or they wouldn’t have given us a license, so it gives further confidence to them, our employees, and also tier 1 counterparties such as our hedging partners.
Further constant investment into redundancy measures and backup systems means we are prepared for most situations and as examples such as not being affected by the Swiss Franc event, Brexit or the US election over the last 6 years shows our systems and also from a human factor standpoint stability.
A lot of companies market their technology or systems being stable where we put huge amounts of resources into also training and human factors as a catch all solution so if something goes wrong someone is immediately able to step in and fix it.
LR: You must have some insight into how the global markets have been responding to the coronavirus. Are there any observations you might be able to share?
Michael: Well in April when President Trump stated Brace for a “hell of a bad two weeks,” I think the bears thought they were in for a field day but with all the market stimulus and concerns over inflation as a result of QE, everyone has been pumping their money into the stock market. There were so many letters thrown around as to what the shape of the market recovery would look like: W-shape, L-shape, M-Shape. However, the one letter everyone was sceptical about was a V-Shape recovery – but that’s the one we saw.
As we saw recently, both the NASDAQ and the S&P 500 both broke their all-time highs on positive data regarding housing sales and US Building permit data, suggesting that the American economy is starting back up again. Now that it’s fairly inflated it seems people are stuck for where else to put it and that’s where the recent movement in Gold has come in, reaching record highs, coinciding with the decline in the U.S dollar.
It really depends on when an effective vaccine can be released to the masses and the global economy can go back to normal for stability to replace the volatility we have been seeing over the last 5 months. This provides a good breeding ground for tech stocks and Gold to push higher. Until then, brace for a bumpy ride.
LR: How do you see BlackBull Markets setting itself apart from the crowd?
Michael: We have always put a New Zealand focus on our product and service offering much like the Australian counterparts have done with a view of exporting financial services to the world vs only a domestic approach. This is the same for us where in a market where essentially the core platforms and pricing is largely the same and while we are competitive in those aspects for clients we differentiate ourselves with the Kiwi based service and support where not only do we have multiple channels and dedicated account managers for all clients large or small but also the institutional approach for custom solutions for certain trader’s needs.
Our team have the ability to use initiative and break out of a standard offering mould to create custom pricing, feeds, platforms, and execution experience that makes the difference for someone who otherwise would be a small cog in an overly bureaucratic competitors’ machine. Finally we feel that New Zealand is the last Tier 1 regulated environments where we can still offer high leverage and hold client funds in a tier 1 AA rated Bank.
Yes, competitors, even regulated ones, can now offer that kind of leverage but often from offshore island licenses with less comparable standards to say in New Zealand with the FMA. There is a reason why there are only 20 or so FMA regulated companies in the world and most of them are main name investment banks like Credit Swiss and Deutsche bank, not retail brokers.