Hong Kong FX broker CLSA Premium set to report substantial loss for 2019
The broker, formerly known as KVB Kunlun, says the loss reflects a reduction in leveraged Forex and other trading income earned from external customers.
Hong Kong-focused retail Forex broker CLSA Premium Ltd (HKG:6877), formerly known as KVB Kunlun Financial Group, today issued a profit warning for the year to end-December 2019.
The board of directors of the company notes that, based on the preliminary review of the latest unaudited consolidated management accounts of CLSA Premium, for the year ended December 31, 2019, it is expected that the Group will incur a substantial loss for 2019 as compared to the net profit for the year ended December 31, 2018.
The Board attributes the loss to a variety of factors, such as a reduction in leveraged foreign exchange and other trading income earned from external customers due to a sharp decline in the number of customers and reduced volatility in foreign exchanges, which led to decrease in trading volume of the Group’s customers in 2019.
The Board also notes that regulatory authorities in different regions, including Australia and Hong Kong, tightened the regulations on leveraged foreign exchange trading, which led to investors’ restructuring of their investment portfolios in the relevant year.
Finally, CLSA Premium says that the global economy has entered a synchronized slowdown during 2019, which affected investors’ attitude towards investment in leveraged FX and commodity products.
Let’s recall that KVB Kunlun changed its name to CLSA Premium in December 2019. Back in September, explaining the rationale for the name change, the Board said the new name will better reflect the fact that KVB Kunlun is part of the substantial shareholder’s group of entities, including CLSA group. Furthermore, the Board believes that the new name will provide the company with a fresh corporate image and identity, which will benefit the Group’s future business development and is in the interest of the company and its shareholders.
In addition, given that there are unaffiliated entities that are using a similar name and conducting similar business as the company, changing the name would remove any confusion that may cause to the public. The rebranding will be part of the company’s new plan and vision to better utilize and capitalize on the business know-how and potential synergies with CLSA group and its affiliates.
