Swissquote shares off 11% following 1H results announcement

Leading Swiss online trading and retail forex broker Swissquote Group Holding SA (SWX:SQN) has seen its shares drop 11% in the two trading sessions since releasing its financial and operating results for the first half of 2015 on Tuesday morning.

Swissquote shares, somewhat ironically, typically carry a lot less volatility than the industry Swissquote serves, trading in a very tight CHF 28-30 band for most of the past four months. However since its results were published Swissquote shares are off about CHF 3 each, or 11%, down to close at CHF 25.30 on Wednesday – their lowest closing price since mid February in the aftermath of the Swiss Franc spike in January.

Swissquote share price July 2015

Swissquote share price, March-July 2015. Source: Google Finance.

Swissquote’s first half results were actually nearly identical to its second-half-of-2014 numbers, save for a CHF 20 million after-tax hit it took due to negative client balances from the Swiss Franc spike event, which Swissquote had previously disclosed.

For example, Swissquote’s operating revenues came in at CHF 75.21 million, versus 75.18 million in the second half of 2014.

But it looks like stock market investors are looking for nearly any excuse to be nervous and look more at the potential downside nowadays.

Part of the reason Swissquote’s bottom line for 1H-2015 came in a little light, beyond the negative client balances provision, was a slight increase in operating and marketing expenses. But we believe that these are mainly investments in building market share and continuing to take the Swissquote brand outside of Switzerland, such as Swissquote’s sponsorship deal with Man U and expanding in Malta.

In the grand scheme of things these investments are fairly small and should bear fruit in the second half of the year and beyond.

Could this be a buying opportunity in Swissquote stock?


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