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January 16, 2013 10:53 pm
FXCM, the US foreign exchange agency broker, is expecting China to be its biggest growth market this year, boosted by huge numbers of mobile-savvy retail traders.
Chinese forex retail traders accounted for a fifth of FXCM’s total mobile and tablet trades by volume in the second half of 2012. Including Japan and Hong Kong, that figure rose to 35 per cent.
“We’re gearing up for some major growth in China,” said Brendan Callan, chief executive of FXCM Europe. “The industry there is starting to change and they seem to be more open to letting outsiders into [the] mainland, which would be huge for us.”
Retail traders in Asia, and specifically China, were more accustomed to using mobile apps than their western counterparts, he said. US traders comprised 13 per cent of mobile trade volumes from May to November last year, while the UK accounted for only 7 per cent.
Overall, the number of FXCM clients trading through mobile devices more than doubled in the past year to 20,180 – accounting for more than 10 per cent of FXCM’s total volumes across its platforms.
There were still regulatory hurdles in China and Japan, including an increase in Japan of the minimum deposit margin requirements for retail FX traders, Mr Callan said.
FXCM, which is listed on the New York Stock Exchange and has an office in Hong Kong, was still “limited in what we can do [in China]”, said Mr Callan, adding that a lot of clients from the mainland opened accounts through their London office.
The renminbi is not freely convertible and Chinese laws forbid any individual from converting more than $50,000 worth of renminbi in a calendar year. Sophisticated financial products, including spread betting, are not allowed in the domestic market.
David Jones, chief market strategist at IG Index, the spread betting company, said that although Asia was a key mobile trading growth market for the company, that trend was driven by Singapore and Japan rather than China.
A quarter of the spread better’s trades by volume occur on mobile devices.
“We don’t have a great number of Chinese clients ... it’s been very difficult because of regulation,” said Mr Jones. “Historically it’s not been an open market for us,” he added.
Mr Jones said half of the company’s clients used mobile devices to access their trading platform and check their positions.
Mobile has become an increasingly competitive area for spread betting companies, seeking to capitalise on its growing popularity among retail traders.
Additional reporting by Jamil Anderlini
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