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Foreign Exchange

Gain Capital second-quarter revenues rise on efficiency gains

Gain Capital, one of the biggest global retail FX brokers, said its second-quarter revenues rose 38% from the previous quarter after it improved operating margins and continued to grow beyond its local market in the US.

Net revenues were $55.6 million versus $40.4 million in the first quarter. During the first quarter, Gain acquired dbFX, Deutsche Bank’s retail foreign-exchange trading business, from which it added $55 million in customer assets from 1,650 clients. The increase comes as growth in retail accounts and the value of client assets both slowed in the second quarter. Gain’s chief executive officer, Glenn Stevens, points to the firm’s net income margin of 20% and the scale it has achieved as key drivers of the improved revenues. The company’s traded retail accounts rose slightly from 36,570 in the first quarter to 36,868 in the second and clients’ assets rose from $283 million to 293.1 million, while funded retail accounts fell from 85,698 to 78,395.

Gain is pinning its hopes for future growth outside the US. Samantha Roady, Gain’s chief marketing officer, told EuromoneyFXNews in June that three years ago two-thirds of Gain’s business came from the US and that has now almost flipped the other way. Its biggest growth market is in Asia, particularly Japan, the world’s biggest retail FX market. It is also seeing growth in the emerging economies of Eastern Europe, Roady said.

“We are actively investing in geographic expansion, with a focus on increasing our presence in the high-growth EMEA and Asian markets,’’ CEO Stevens said in a statement announcing the earnings results.

Gain is in the process of updating its technology offerings by providing trading solutions for the iPad, iPhone and Android devices. The release of Gain Capital’s retail platform, FOREXTrader PRO, with automated trading capabilities, will allow traders to trade over a 24-hour period in a market.

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