Swissquote shares crack CHF 80, hit all-time high
The global Covid-19 pandemic has been very traumatic for a number of key industries (airlines, rental cars, non-online retailers, cruise lines, hospitality…), but has been a boon to others. Most notably, companies that allow or help people and organizations to do things remotely have done well – names such as Amazon, Zoom, and Netflix come to mind.
However another sector that seems to have benefited from the worldwide fallout of Covid-19 is the online financial trading sector, and specifically FX and CFD brokers.
Along with the virus has come one of the rockiest periods that financial markets have ever seen – a huge risk-off trade throughout late February and March, followed by a fantastic risk-on, liquidity-driven rebound in April, and then continued large up-and-down swings during May and now June.
In short – perfect conditions for Retail FX brokers.
Historically, Retail FX brokers have done well during these kinds of periods of high and sustained market volatility. The more things are bouncing around, the greater the opportunity for traders to make (or lose, of course) big money. That brings traders off the couch and onto the trading screen.
And that rule has certainly held true in this market, with a number of Retail FX brokers breaking out of a years-long slump to put up fantastic volume, revenue, and profit figures.
Combine that environment with a large number of frustrated sports bettors – with no sports to bet on – who have been drawn to financial markets trading at least for the time being, and you have a perfect storm for many a Forex broker.
One of those brokers, Switzerland’s largest Retail FX firm Swissquote, has also “ridden the wave” and reported last week that its Revenues so far in 2020 are up about 40% over last year. That drove Swissquote stock up higher, from a near-all-time-high in the upper CHF 60’s all the way to close the week above CHF 80 (at CHF 80.40) for the first time ever. Swissquote shares (SWX:SQN) had hit CHF 70 briefly in 2007 and then again in 2018.
Swissquote shares, one-year graph. Source: CNBC.
At its current share price Swissquote has a market cap of CHF 1.23 billion (about USD $1.3 billion). Swissquote will be reporting its first half 2020 results in a few more weeks (August 11).
By comparison, the largest publicly traded online brokers which trade in the UK – most notably IG (which just rebranded), Plus500 and CMC Markets – have also posted good numbers and have seen their shares do well, but are still far off their all-time highs.