Integral

TradeStation to be acquired by Japanese Monex Group

0 Comments

TradeStation the large US multi-asset broker which only recently entered the retail forex space is about to be acquired by the Japanese Monex Group for $411 million.

This is a very interesting step as recently we’ve seen a flurry of transactions of foreign brokers buying Japanese forex brokers (Alpari, FXCM and Ava FX the most recent) amid the latest leverage reductions and tough economic climate in Japan. There are many more Japanese businesses looking to be sold as Japanese market is much larger in terms of number of market participants and hence consolidation is much faster and aggressive there than elsewhere. This move by Monex Group however makes a lot of sense as profits in Japan fall and can only be balanced by either consolidating locally or expanding overseas. TradeStation, a relatively small broker, is certainly an attractive target and is now in a poll position with its unique trading platform to expand in the US retail forex market as well.

Some data about Monex:

FX Volume – $120M a day

FX Clients – 120,192

Income $240M, profit $55M – including FX, Stocks, Bonds, etc

It’s amazing to see how on almost the same number of clients as FXCM an Japanese broker is making 1/100 volume. Average Japanese ‘trader’ trades about 0.01 lots a day while average western client trades about 0.8-1.0 lots a day.

Nikkei and Reuters report:

“Monex Group Inc. (8698) said Thursday it had reached an agreement with TradeStation Group Inc. to acquire the U.S. online brokerage for about 411 million dollars (33.9 billion yen). A U.S. subsidiary of Monex Group will make a tender offer of 9.75 dollars a share for the company listed on the Nasdaq stock market as early as later this month, with the aim of turning it into a wholly owned unit. The expected purchase price is a 39% premium on the average stock price of TradeStation Group over the past three months. Monex Group plans to use cash-on-hand and bank loans to buy the U.S. firm. Monex Group is stepping up its overseas operations in a bid to expand earning sources, as stock transactions by individual investors in Japan remain sluggish.

Shares of Monex slumped 2.1 percent to 16,700 yen, reflecting investor worries over the financial burden. “We have enough cash for this acquisition and we see no impact on our financial health from this,” Monex Chief Executive Officer Oki Matsumoto said at a briefing. TradeStation is one of the six publicly traded online brokers in the U.S. and caters mainly to individual investors, with 48,000 accounts, Monex said in a statement.”


Sucden






TAGS: , , , , , , , , , , , , , , , , , , ,
 
More information on this subject is found in the latest Forex Magnates Quarterly Report


Comments are closed.

We do not store your information and we do not disclose our sources.


Leave your name/email (not required) if you'd like to be contacted about this story (will not be disclosed):



Note: Copyright © 2014 Forex Magnates. All rights reserved.

All materials contained on this site are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of Forex Magnates. You may not alter or remove any trademark, copyright or other notice from copies of the content. All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you.Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.

Opinions expressed at Forex Magnates are those of the individual authors and do not necessarily represent the opinion of Forex Magnates or its management. Forex Magnates has not verified the accuracy or basis-in-fact of any claim or statement made by any independent author: errors and Omissions may occur. Any opinions, news, research, analyses, prices or other information contained on this website, by Forex Magnates, its employees, partners or contributors, is provided as general market commentary and does not constitute investment advice. Forex Magnates will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.

©2014 "Forex Magnates Inc. - Home of the Forex Elite" All Rights Reserved.