Excerpts:
What are the activities of Saxo Bank?
Saxo Bank is an international investment bank specializing in online trading and investment across global financial markets. Saxo Bank enables private investors and institutional clients to trade FX, CFDs, ETFs, Stocks, Futures, Options and other derivatives via multi-award winning online trading platforms. In addition, Saxo Bank offers professional portfolio and fund management. From the start, Saxo Bank has emphasized technology as a vital element for being competitive in the online trading industry. With clients worldwide, Saxo Bank is recognized for excellence in service and technology. Safeguarding client information and securely controlling, executing and managing real-time internal systems are of utmost importance to the bank. A significant team of experienced IT professionals works diligently to firmly secure all of Saxo Bank's information and operating systems. Since 1992, Saxo Bank has been a facilitator in the global capital markets aggregating liquidity, offering access to exchanges around the world and providing its powerful suite of products and platforms to private clients, institutions, banks and brokerages. A fully licensed and regulated European bank, Saxo Bank supports a global base of individual private clients, corporations and financial institutions from its headquarters in Denmark and numerous regional offices. Since receiving European bank status in June 2001, Saxo Bank has rapidly become a leading presence in online trading thanks to its superior client service, competitive pricing and focus on the development of industry-leading trading platforms.
Trading at Saxo Bank is done through the online platforms SaxoTrader, WebTrader and SaxoMobileTrader. How do the systems work?
Saxo Bank offers three platforms all linked together and available to our clients: The downloadable SaxoTrader, the web-based SaxoWebTrader and the SaxoMobileTrader for Iphone and Android. Through Saxo Bank's suite of online trading platforms, clients can access the world's major financial markets from any location and trade a broad range of financial products, including Forex, Stocks, CFDs, Futures, FX Options and ETFs, all from a single account. Advanced trading tools, reliable live prices, fast trading executions and ease of use have made Saxo Bank's platforms important business tools for traders and investors in over 180 countries, as well as banks, brokerages and other financial institutions. Widely recognized for their performance and features, the bank's platforms have consistently won some of the industry's most prestigious awards. Each platform — for the desktop, web and mobile devices — offers a unique trading experience and is designed to give clients an edge in today's fast-paced markets.
The bank was founded in 1992 and it attained European bank status in 2001. What difference has it made after getting the European bank status?
Saxo Bank received bank status in 2001. I know from the founders of the bank that it was a milestone in Saxo Bank's history. It differentiated Saxo Bank from the other brokers in the market at the time that did not attain a banking license. It is actually very typical of the bank's history. Essentially, our two founders — Kim Fournais and Lars Seier Christensen — never had a grand vision of everything Saxo bank has become and the technology that underpins it, they saw an opportunity to build a brokerage with a clear focus on customer service and a more personal treatment of the private client segment than was offered by other banks in the 1990s. They happened to come across the Internet at an early stage and appreciated there was a real chance for a small firm to differentiate itself, so they invested a lot of energy and resources to develop an online FX trading platform and becoming a real online trading and investment bank. And, I must say, I think they have a lot to be proud of this September when Saxo Bank celebrates its 20th anniversary.
Since when are you present in the Gulf?
Since mid-2009, when we established our subsidiary in the DIFC in Dubai.
Does Saxo Bank have a reasonable client base in the Gulf?
We don't share actual client numbers or the geographic distribution. We can however share that approximately 6-7 percent of Saxo Bank’s total earnings originate from the Middle East. The share of revenue has doubled since 2009.
Who are Saxo Bank's clients?
During the last few years, we have increased our focus and distribution toward our key client segment: The experienced and sophisticated private clients and our institutional business. We have reorganized and upgraded our organization, as well as our offering, to ensure we have a truly unique proposition for this segment. We believe in quality rather than quantity, and that this will secure sustainable long-term growth. We often see clients approaching us once they have gained experience from competitors, as this is especially a situation where clients are in a position to appreciate Saxo Bank and our value proposition — transparency, security, market leading technology/product offering combined with an experienced and high level of service.
Saxo Bank has over 85 White Label Partnerships with institutions. How does this partnership work?
Saxo Bank actually has over 100 White Label Clients around the world. Through our White Label Program, we are able to configure tailor-made solutions for banks and brokers who want to offer a market leading online trading platform to their customers. Several of the world's largest banks have selected Saxo Bank to support their trading solutions. The solutions have been developed with a view to creating value for banks, brokers and other financial institutions, who want to expand their business range and generate additional revenue by offering high quality online trading functionality to their customers — with a minimal investment and short time to market. The fully branded trading platforms allow financial institutions to retain full ownership and control of their client base.
Does Saxo Bank offer private wealth management services?
In the past few years, a new strategic direction has taken shape, which expands the focus from trading to a broader product palette, created to serve a much more diverse client base. While the foundation of Saxo Bank's business continues to be its state-of-the-art trading platforms, client service and competitive pricing, the bank is increasingly developing new business areas to complement its traditional offerings. One of the new areas is asset management. Through a number of acquisitions Saxo Bank has brought together some of the fund management industry's leading boutiques under a common umbrella: Saxo Asset Management.
Each boutique is focused on particular niche asset classes:
• Credit Fixed Income — Capital Four
• Global Equities — CPH Capital
• Emerging and Fixed Income and Currency — Global Evolution
• Danish Fixed Income and Nordic Equity — Sirius Capital Management
Saxo Bank issues weekly commodity reports. What future do you see for oil and gold?
Gold and Oil prices look set to remain supported during the coming 12 months. After that time, the outlook for oil will still be looking positive while gold could begin to find the road ahead a bit bumpy. Oil remains supported due to continued demand growth among the major emerging economies while supply, despite increased US and Canadian production, will struggle to keep up. A floor under the price has also been established due to the increased need for higher prices among some of the main producers, such as Saudi Arabia and Russia. Gold can still reach $2,000 over the next 12 months but as we approach the time of higher official interest rates gold will begin to lose some of the support that has driven the price higher, especially during the last three years.
Where is the world economy heading in 2012?
The global economy from a commodity perspective will continue to grow in the months ahead. The current soft patch will probably reach its low point during the second quarter. Chinese growth has disappointed recently and this is one of the major focal points in the months ahead given its huge importance for commodity demand, especially for oil and industrial metals.
What advise you want to give to investors for 2012?
Right now, I would advise them to keep the powder dry. Monetary policy always washes over an economy with a delay, so the next quarter or two will show us how the economy and its moving parts are responding to the applied stimulus. In Q2 and possibly into Q3, we are likely to see an odd combination of reasonably positive economic momentum, at least in Europe and the US, and gathering concerns about the forward outlook. If the recovery in the US fails to provide enough jobs momentum a return of QE (quantitative easing) some time in Q3 may be a possibility. Asia will continue to aid its growth through imports. In Asia, the critical question is China, as losses on investments continue to accumulate and eventually need to be realized. Also, Saxo Bank predicts that commodities will face a bumpy road ahead as geo-politics have intensified the unpredictable nature of oil markets. Grain prices risk rising sharply and gold is expected to consolidate during the early part of Q2. Commodity investors need to be patient during the current quarter and take advantage of potential corrections given the outlook for a pick up in activity during second half of 2012. Look for commodities with potential supply issues as those that will be supported the most. Volatility will return to the equity market in Q2 as stimulus is withdrawn and safer, dividend paying stocks will outperform. The Australian dollar is the least favorite of the major currencies with the most to lose relative to the Chinese landing and its current valuation and the Chinese yuan could also lose steam as China's terms of trade shift and on reduced capital inflows.
