The Japanese FX industry seems to be experiencing some challenging conditions and is certainly not immune from the contraction of volumes which continue to weigh heavy on the majority of the FX industry, with the July financial results reported by MONEX Group underlining the trend. The online trading stalwart today published its revenue data for last month, with the figures rendering null the small beam of light that the group’s revenues saw in June 2014.
According to figures published today in its monthly financial report, MONEX’s net operating revenues after deducting financial expenses amounted to JPY 3.48 billion (US $33.5 million) in July 2014. This represents a small drop of 1.4% on a monthly basis. Whilst the difference from the JPY 3.53 billion in revenues achieved in June 2014 is not that substantial in itself, it makes a huge difference as far as assessing the company’s performance is concerned, as MONEX Group appeared to be out of the woods in June registering an increase in revenues.
The numbers concerning financial expenditure do not provide a nice piece of news either. Financial expenses for July 2014 equaled JPY 448 million, which is a massive 32% higher than the costs incurred by the firm in July 2013. More importantly, when compared with the results for June 2014, a small decline of 0.44% is present. This small change, however, is hardly encouraging as the group has been trying to cut expenses since October 2013.
Back in October 2013, the group faced a set of dismal metrics for the second quarter of its fiscal year. After profits and revenues tumbled following what had been a record initial six months for most firms, the company announced a strategic plan to boost performance and streamline expenses. The cost-cutting measures included mostly changes in trading and information services. These efforts are failing to bear fruit thus far, or at least are not turning the company’s fortunes around fast enough. On a positive note, the company’s plan is effective until March 2017, which is more than sufficient in today’s fast moving FX industry.
In terms of the strategic plan, the company has concentrated efforts on introducing new platforms to expand its appeal, a notable example being the introduction of the application-based Tradable platform to its offering, which, although anathema to Japan’s usually very domestic-market focused audience, is likely to interest Japan’s educated and technologically astute client base. Furthermore, TradeStation being was rolled out in Japan early this year, providing Japanese traders with the same platform which is offered to clients of the firm’s North American subsidiary.
MONEX’s efforts have yet to result in better operating metrics. In July 2014, the group posted one more set of disappointing operating results: FX trading volumes plummeted by 47% against a year ago, with the monthly decline being less dull at 7.9%. These data were released after MONEX reported weak numbers for the April-June quarter of 2014, with net revenues decreasing by half.
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