Monex to recognize $8m profit boost thanks to US tax legislation reforms
The broker will recognize an increase in profit due to decreased income taxes expense by approximately $8 million in Q3 FY2018.
The recent tax legislation changes in the United States appear to be beneficial for online trading services provider Monex Group, Inc. (TYO:8698), which operates in the United States via TradeStation Group.
Monex announced today that it is about to recognize an improvement in its profit for the third quarter of the fiscal year to March 31, 2018 as a result of a change in deferred tax assets and deferred tax liabilities. Let’s recall that the Tax Cuts and Jobs Act, which was enacted on December 22, 2017, and the tax reform legislation reduce the maximum corporate income tax rate from 35% to 21% in the US.
As a result, Monex Group will see in an increase of profit due to the decreased income taxes expense by approximately $8 million (about JPY900 million).
Monex’s TradeStation business in the United States has been developing actively lately. As per the latest financial report – the one for the second quarter of the financial year to March 31, 2018, its customer base is continuing to expand on the back of accelerated growth in account opening and the lower attrition rate when compared to the first quarter of the current fiscal year. The growth in stock lending volume and higher interest rates were core drivers of the increased net income, whereas segment profit has been achieved for the last four consecutive quarters despite the low volatility environment.
Let’s recall that in July this year, TradeStation underwent rebranding as it sought to cater for a growing clientele, including more millennials and younger traders. The changes included a shift towards enhancing the mobile offering, reflecting the increased usage of such technologies by younger clientele.
In terms of recent novelties around TradeStation, we should note that in December the company announced that eligible futures clients could trade the new Bitcoin futures contract being offered by Cboe Global Markets, Inc. (Cboe). TradeStation offers futures traders the tools that are set to help them navigate these emerging markets. In addition to Bitcoin futures trading, TradeStation’s futures offering is now available at simplified low-cost pricing of $1.50 per contract, per side (plus exchange execution, clearing and regulatory fees), with no monthly software fees and free premium analysis tools and real-time market data.
