Global Group posted peak financials, but fears recession in the near future
A few days ago, the leading developer of software for brokerage and banking sector of Global Group presented the annual financial report as of 2018, the performance of which is really impressive, but the new rules of the ESMA directive can significantly affect further positive dynamics.
According to official figures, the profit on operations in the Global Group grew by 18% compared to the previous year and fixed at around 858 million dollars. Accordingly, the company’s net operating revenue amounted to 575 million dollars, and this is 36% higher when compared with the same period.
The President of Global Group commented on the current performance of the company:
“First of all, we owe our high results to our partners – brokers and their clients – traders. They use our innovative developments, and we work tirelessly to make trading as simple, convenient and efficient as possible. This year we will continue our journey to improve the technical side of working with trading instruments and we hope that the demand for our products will grow even more. Our success directly depends on the success of our customers.”
The Global Group report states that at the end of October 2017, the company’s customers, namely the largest international brokers, announced the launch of a qualification program for their own traders, according to which they will be able to obtain the status of professional market participants. According to the current month, the percentage of traders in the professional category brings in almost 40% of the profit. The company also notes that the next three months should be no less profitable and even be able to break their own record. According to expectations, revenue in this category may be 50%.
Revenue in 2019 is likely to be less
Returning to the downsides of the ESMA directive, the Global Group notes that tightening regulation in the EU predicts less promising prospects. The entry into force of the new rules will affect the decrease in annual revenue. It is worth noting that in the current year the costs associated with software development will increase. Both of these negative factors will affect financial performance, so it will be possible to reach the previous high level only by 2020.
Recall that the Global Group from the very beginning reacted coldly to the new directive of the regulatory authority ESMA. According to the company, such measures are restrictive, since they put traders in a certain framework, which is why all market participants lose a part of their profits. It is likely that traders will begin to go to offshore jurisdictions, choosing less regulated brokers or not regulated at all.