Author: Adam Smith

ThinkMarkets, an Australian-based broker operated by Think Financial Group Holdings Limited, has announced its plans to go public through a reverse merger with Canada-listed blank check company, FG Acquisition Corp. The anticipated listing is scheduled for July 2023. (Read our detailed review about ThinkMarkets)

• Nauman Anees, Co-Founder and CEO of ThinkMarkets expressed excitement about embarking on this new phase as a publicly traded company with the support of FGAC. Nauman Anees will assume the role of CEO in the merged entity, while the other Co-Founder, Faizan Anees, will become the President.
• According to Nauman Anees, the decision to list on the TSX in Canada offers an efficient pathway into the public markets, and the company sees significant opportunities to expand its product and service offerings in Canada.

ThinkMarkets provides retail forex trading services and also operates an institutional presence with a liquidity provisioning platform launched in 2021. The broker boasts a substantial client base of 138,500 traders from 165 countries. With a strong focus on growth, ThinkMarkets achieved a 24% Compound Annual Growth Rate (CAGR) and generated $62 million in revenue in 2022.

While the majority of its business is in the retail sector, ThinkMarkets is experiencing year-over-year growth in its institutional business. In addition to its presence in Australia, the broker has expanded internationally, obtaining a license in New Zealand earlier this year and entering the Japanese market through the acquisition of a local FX firm.

Vantage, an ASIC-regulated foreign exchange brokerage, has extended its services to tap into the emerging opportunities in South Africa, a rapidly growing and dynamic region.

Vantage has successfully obtained a derivatives license from the Financial Sector Conduct Authority (FSCA). This authorization permits the company to function as an OTC derivative provider, enabling it to engage in activities such as originating, issuing, selling, or creating a market for OTC derivatives as part of its regular business operations.

Vantage expressed its interest in operating in South Africa due to various factors, including the favorable business environment and the progressive legal framework for international brokerage firms in the country.

To comply with local regulations, Vantage must appoint registered representatives within the country, including at least one key individual and a compliance officer, to effectively manage company affairs. In line with this requirement, Ted Odigie was promoted to Head of Sales for Africa in November. With over 17 years of experience in the financial services industry, Odigie specializes in business development and client management, joining Vantage in August 2021.

Marc Despallieres, Chief Strategy and Trading Officer at Vantage, commented, “We are delighted to have obtained our FSCA license. South Africa has been our target market, and we were determined to offer traders outstanding financial services and products while adhering to the highest regulatory standards.”

Forex brokers in South Africa are overseen by the Financial Sector Conduct Authority, which grants approval to firms operating within the jurisdiction. The FSCA issues licenses and has the authority to impose penalties on companies that violate the guidelines of the nation’s dual regulatory system.

South Africa boasts a robust and well-structured financial market, making it an attractive destination for brokers seeking expansion. As one of the top ten global capital markets, it attracts thousands of investors. Furthermore, the market in South Africa offers diversity and is not as saturated as other regions like Europe.

In addition to entering the South African market, Vantage recently expanded its service offerings and trading products by introducing Vantage Connect, a liquidity solution catering to institutions and corporates in the UK.

This move into the B2B market aligns with the current challenges faced by institutional and professional traders when accessing the wholesale foreign exchange price-matching community through a prime brokerage model. Vantage’s strategic expansion in the institutional segment aims to meet the growing demand for customized trading solutions.

Thursday saw a stabilization in oil prices, mitigating some of the previous session’s losses, following Russia’s announcement that OPEC+ does not foresee a need for additional output reductions.

Alexander Novak, Russia’s Deputy Prime Minister, characterized the oil markets as balanced. Russia is a member of the OPEC+ consortium of oil-producing nations that earlier this month unexpectedly agreed to slash their collective production by about 1.16 million barrels per day, a move the U.S. termed ill-advised.

Novak stated that OPEC+ does not view further oil output cuts as necessary, but it has the capacity to tweak its policy as required.

Brent crude futures rose by 64 cents, reaching $78.33 a barrel at 1:05 p.m. EDT (1705 GMT). Meanwhile, West Texas Intermediate crude saw an increase of 60 cents, settling at $74.90.

On Wednesday, both benchmarks plummeted nearly 4% as concerns about a potential U.S. economic recession overshadowed a larger-than-anticipated decrease in U.S. crude stockpiles.

Investors are closely monitoring economic indicators for potential signs affecting energy demand.

The U.S. economy experienced a more significant slowdown than anticipated in Q1, although there was a decrease in jobless claims for the week ending April 22, according to data.

An analyst at Price Futures Group, Phil Flynn stated, “There’s a blend of signals on interest rates, and the oil market is uncertain how to react to this.”

U.S. data on Wednesday indicated a greater-than-expected drop in capital goods spending. The slumping of First Republic Bank further influenced the weak risk sentiment in the banking sector, which weighed down oil prices.

Analysts highlight poor refinery margins as a key factor in the recent fall of oil prices. Tamas Varga, an oil broker at PVM, named heating and gas oil “the principal potential drivers of this marked weakness.”

Varga noted that “Stocks of this product are somewhat resistant to depletion, possibly due to robust Russian exports.”

Despite an EU embargo and oil price cap, sources informed Reuters that Russia has ramped up its exports of refined products.

Reduced refinery profit margins could result in run cuts and a subsequent decrease in crude demand, suggested Ole Hansen, head of commodity strategy at Saxo Bank.

The backwardation in the Brent futures curve (LCOc1-LCOc7) has levelled off slightly above $2.00 per barrel, after peaking at $4 a barrel on April 12.

Backwardation, a market scenario where front-month contract prices surpass those of later months, typically suggests a tight supply.

Market participants are waiting for the first quarter data on eurozone GDP growth, due Friday, for potential market direction. The data could influence the European Central Bank’s monetary policy decisions in its meeting scheduled for May 4.

Stock indexes advanced on Thursday, although they finished below session highs, while the dollar declined as investors shifted their focus to upcoming inflation data and the interest rate hike outlook. Longer-dated U. Treasury yields fell in anticipation of Friday’s personal consumption expenditures (PCE) data release. Economists predict core prices to have risen by 0.4% in February and posted a 4.7% annual increase.

The US dollar slipped to a one-week low against the euro, bolstered by German inflation data. Oil prices increased over 1% due to lower US crude stockpiles and an export halt from Iraq’s Kurdistan region, counterbalancing pressure from a smaller-than-expected cut to Russian supplies.

Investors’ risk appetite on Thursday was fueled by hopes of bank turmoil containment and speculation that central banks worldwide are nearing the end of their interest rate hiking cycles, according to Jeff Kleintop, Chief Global Investment Strategist at Charles Schwab. However, hawkish comments from Federal Reserve officials raised concerns among investors, who were bracing for Friday’s critical economic data and potential volatility from traders’ end-of-quarter position adjustments.

Despite recent events, including the collapse of two US banks and the rescue of a major European bank, which led to speculation that the Fed might halt rate hikes to avoid a broader crisis, Federal Reserve officials signaled that more work was needed to address inflation. The focus on inflation and the Fed’s stance pushed stock markets higher, with technology shares contributing the most significant gains.

In the currency market, the dollar index fell 0.477%, while the euro rose 0.57% against the dollar. The Japanese yen and Sterling also strengthened against the greenback. US crude oil prices rose 1.92%, and Brent increased by 1.25%. Gold prices gained as a weaker dollar and lower bond yields drove demand for the precious metal, with investors closely watching US inflation data to assess the Fed’s next move.