KVB Kunlun issues profit warning as FX trading income drops

Maria Nikolova

The brokerage expects to register a substantial loss for the six months to end-June 2019.

Hong Kong-focused retail Forex broker KVB Kunlun Financial Group Ltd (HKG:6877) has issued a profit warning for the first half of 2019.

Based on the preliminary review of the latest unaudited consolidated management accounts of the Group for the six months to the end of June 2019, it is expected that the Group would incur a substantial loss for the first six months of 2019 as compared to the net profit for the six months ended June 30, 2018.

The Board attributes the loss to the following factors:

  • a reduction in leveraged foreign exchange and other trading income earned from external customers due to reduced volatility which led to decrease in trading volume of the Group’s customers in the Relevant Period;
  • regulatory authorities in different countries, including Australia and Hong Kong, tightened the regulations on leveraged foreign exchange trading which led to investors’ re-consideration on their investment portfolio; and
  • the global economy has entered a synchronized slowdown during the Relevant Period which affect investors’ attitude towards investment in leveraged foreign exchange and commodity products.

Let’s recall that the brokerage has issued a similar warning for the first quarter of 2019. Back then, the brokerage also blamed the gloomy forecast on a reduction in leveraged foreign exchange and other trading income earned from external customers due to reduced volatility.

In the meantime, KVB Kunlun is engaged in a process of Identification and Disengagement of PRC Domestic Clients that aims to ensure the Group’s legal compliance and is in the interests of the Company and its shareholders as a whole. This process was launched following the receipt of a letter from the Australian Securities and Investments Commission (ASIC). The letter informed KVB Kunlun that, as a holder of an Australian Financial Services License, it is obliged to comply with applicable laws of foreign jurisdictions. The letter recommended that licensees should seek legal advice to ensure that the products and services they offer to their clients comply with applicable foreign laws.

Read this next

Retail FX

FF Simple and Smart Trades says Goodbye to CySEC authorization

The Cyprus Securities and Exchange Commission (CySEC) confirmed that it has wholly withdrawn the Cyprus Investment Firm (CIF) licenses of FF Simple and Smart Trades Investment Services Ltd.

Crypto Insider

Shining the Light in Crypto’s Dark Places

Something changed in regulators’ minds after the November crash of the FTX crypto exchange.

Executive Moves

Financial Commission Adds Sam Low to Dispute Resolution Committee

The Financial Commission (FinaCom PLC), a dispute resolution service that caters to the financial services industry, has appointed Sam Low as the newest member of its Dispute Resolution Committee (DRC).

Digital Assets, Uncategorized

De-facto owner of Bithumb exchange arrested in South Korea

South Korean prosecutors have arrested Kang Jong-Hyun, the anonymous chairman and owner of the country’s largest cryptocurrency exchange, Bithumb, on charges of embezzlement and stock manipulation.

Retail FX

Interactive Brokers volumes snap three-month losing streak

Electronic brokerage firm Interactive Brokers LLC (NASDAQ:IBKR) said its trading volumes rose in January, an indication that investor confidence in the financial markets is rebounding after having been fairly mixed over the past few months.

Digital Assets

VVF invests $5 million in Everscale, a potential Layer 2 solution for Venom blockchain

“For us, this is a strategic investment aimed at the technological development of projects and teams around technologies that we focus on and actively develop. In particular, we are talking about the Venom blockchain project and its ecosystem, which is planned to be launched soon and for which Everscale is a potential Layer 2 solution.”

Institutional FX

FXSpotStream volume ends string of declines on January rebound

Trading volumes on institutional FX platforms surged in January as traders increased their bets on central bankers’ policy with evidence mounting that inflation and economic growth are both losing momentum.

Industry News

DeFi firm Aurox launches SEC-compliant crowdfunding campaign on tZERO

“This is a great opportunity for us to raise capital from our community and the broader public on a leading fully regulated platform. We are confident that the tZERO Markets platform will provide us with the exposure and reach we need to attract a diverse investors to support our business growth.”

Industry News

Morgan Stanley launches ETF platform with six ESG-focused products by Calvert

“These new ETFs will resonate strongly with investors who seek competitive investment results while promoting positive change and supporting companies that are leaders in improving long-term shareholder value and societal outcomes.”

<