Denmark’s Saxo Bank started the New Year on the front foot and had one of its best months over the last two years.

Significant growth in margin trading

The margin trading and multi-asset broker saw client activity levels grow by +21.0% month over month to $438.0 billion, a figure that eclipsed the previous high, posted in March 2021, by +11.0%.

The average monthly volume in 2021 came in $308.0 billion which was achieved without breaking above $400 billion.

FX volumes grew by +13.0% month on month, notional equity trading volumes reached $291.70 billion, growing by +25.0%. A record turnover for any month in Saxo’s history.

Commodities and Fixed income trading grew +18.0% and +15.0% respectively.

Strengthening the board

Saxo Bank, which is backed and controlled by China’s Geely, recently strengthened the board of its UK operation Saxo Capital Markets with the appointment of two experienced non-exec directors, Nicholas Wilcock and Michael Ridley.

Mr Wilcock spent over 25 years at Credit Suisse and Mr Ridely held numerous senior positions at JP Morgan in a 40-year career.

What’s behind the growth in Saxos trading volumes?

Saxo’s trading volumes have increased as volatility in equity markets pricked up during January when investors and traders reconciled themselves to a period of rising interest rates and higher inflation.

Under which growth and technology equities were seen as likely to underperform, whilst value stocks, in what might think of as the old economy, were seen as potential outperformers.

We can see that rotation in action by looking at the performance of stocks in each group.

For example, the US S&P 500 Energy sector has risen by +25.58% year to date, whilst the Information Technology sector index has fallen by -9.07% over the same period.

Saxo’s biggest rival, IG Group, recently posted its interim results, which showed a +42% increase in the number of active clients at the broker and revenue which grew +16.0% to £471.90 million though, those figures did not include trading over either December or January.

Fears that client numbers and client activity would fall away as economies re-opened post-Covid seem to have been misplaced, and many margin trading brokers are continuing to build out their franchises and increase their trading turnover.

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