FXMarketSpace (FXMS) officially published its turnover figures for the first time at the beginning of May, even though they were freely available on Reuters before then. And whatever gloss the company managed to put on them, most industry observers believe they must be disappointing. The platform’s average daily volume through April was just $331 million, which was significantly short of the $16 billion a day that the company says is necessary for it to break even.
When the platform was announced last year, its two parents, the CME and Reuters, said start-up losses would be around $20 million to $25 million and it would be profitable by 2008. However, unless volumes pick up, the estimation on the start-up losses is likely to prove too low, and the timeframe to profitability too optimistic.
There appears to be a growing feeling that FXMS is either a concept launched too late or too early – in other words there might have been a need for an exchange-like model five years ago and there might be one in five years’ time but at the moment there is not. FXMS has widely touted the advantages of its use of a central counterparty, CME Clearing.