Upbeat profit forecast sends KVB Kunlun’s shares up 9%

Hong Kong-focused retail Forex broker KVB Kunlun Financial Group Ltd (HKG:8077) saw its shares enjoy a rise in prices this morning, after the board of directors of the company published a positive profit alert for the first quarter of 2015.

It took several minutes for the share price to rise from HK$1.62 per share to HK$1.76 – a rise of 8.64%. At market close the price subsided and stabilized around $1.71 per share – a rise of 5.6% for the day. The current share price is nearly three times higher than the sum of HK$0.65 per share CITIC Securities Company Limited (SHA:600030) agreed to pay to acquire a 60% stake in the broker.

The sharp price move today came after the Board said it expected to report a substantial rise in revenues and net profit for the first three months of 2015, when compared to the same period in 2014. The directors attributed the upbeat expectations on market volatility in the period in question, which has led to a spike in trading volumes. KVB Kunlun’s board also refers to improvements in currency translation gains and commission income.

The broker saw revenues and profits rise in 2014 on the back of increased volatility. Hence, the positive profit alert for the first quarter of 2015 hardly serves as a surprise. The question is how big the rise will be and whether this will be sufficient to persuade CITIC to raise its bid for the remainder of KVB’s shares.


Photo credit: Google Finance.

To view the official announcement, click here.

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