FX OVERVIEW • Markets in 2011 - high volatility due to Japanese earthquake & S&P downgrade for USA • Retail FX market boom of 5.1% volume growth, up to $219 billion per day • Increase in volume of retail FX traders/trading due to diversifying risks given stock market fluctuations
STOCK EXCHANGE & FOREX • Global economic crisis has increased focus on FOREX alongside traditional investment products (stocks, futures, options, etc.) • Retail FOREX market volume shows $219 billion daily / $4,824 billion monthly in comparison with this period last year • Still a view FOREX is relatively new financial market, but Forex Magnates research (Q3, 2011) forecasts volume growth over $5,100 billion monthly • Move from FOREX as speculative only to integral part of a financial portfolio • Future trend shows FOREX will be viewed as key part of financial market trading • World exchange capitalization fall Aug/Sep 2011 (Bloomberg data, oct. 2011) – gave investors view of "safe heaven" - dollar, yen and gold, with more investment in risky, oversold equities
GROWTH FIGURES World exchange market capitalization, USD *According to Forex Magnates research Q3 was lower because of Japan market slow down • *Bloomberg official data
FX BROKERS` GROWTH • Due to high volatility, majority of large brokers reported higher volumes in Q2 than in Q1: • Leading brokers showed daily volumes from $2.3 billion to $14.6 billion • FOREX CLUB grew to daily volume of $3.6 billion FROM TIMEFRAME TO WHAT TIMEFRAME? • Other Key Growth Factors (Forex Magnates research, Q3, 2011): • Boom in retail FX market in last 10 years in mature economies (US, UK, Asia, etc.). Rapid growth due to increase in (1)widespread use of internet (2) confidence in online trading platforms (3) ease of trading • Increased growth/entry of volume of trading activity due to traders wanting more income sources and/or diversified portfolios. Technical improvements contributed to traders’ performance: (1) effective risk management for risk/reward ratio (2) use of stop loss and limit orders (profit take) (3) knowledge of both technicals and fundamental • Retail traders typically trade with brokers acting as principal on trade vs. institutional FX brokers acting as trade facilitator and then passing orders through to main interbank market
FOREX CLUB’S 2011 SHARE OF GLOBAL FX MARKET Data According to Forex Magnates research, Q3, 2011
RUSSIAN FX MARKET: RETAIL TRADERS • 2010 forecast by FOREX CLUB was accurate. Increased volume of FX traders to 15% within2011. • Expect to increase to 18% by end of 2011 • 15% volume growth in Russian traders demonstrates a 9-year timeframe for cash flow growth of internal Russian FX market and economy. • Previous FOREX CLUB research indicates that Russian FOREX market volume will be $3-3,1 by 2020 • Slowed market growth due to: (1) regulation and (2) low financial literacy of Russian population. Currently Russia has 2 % of fully literate citizens and 50% don’t consider themselves literate at all (Moscow Higher School of Economics report, published on Finmarket, October 2011) • Major efforts by Federal Financial Markets Service underway to improve financial literacy. • Within 2011, FOREX CLUB’s own International Trading Academy (ITA) educated over 60,000 people across 40 regions of Russia and CIS countries. • ITA: (1) one of oldest established financial education groups in Russian market (2) one of first to give traders special courses in analysis and understanding of financial markets.
REGULATION • 25October 2011: Federal Financial Markets Service announced in 2012 it will regulate FOREX Russia • FOREX club welcomes and endorses regulation initiatives from governmental bodies • FOREX CLUB id one of the key FX leaders in creation of SRO CRFIN on Russian market for professional, transparent conduct within retail FX sector. • SRO CRFIN continues to attract new members for the body