CTS Global shifts to US dollar assets amid stock market volatility
Veteran stockbroker Edward Lee’s CTS Global Equity Group said profits soared in the first nine months of the year as US dollar gains offset a sharp drop in its core stock trading business.
Net income from January to September surged more than 161 percent to P70.9 million while revenues fell 45.8 percent to P58.4 million, the company’s latest financial report showed.
CTS Global also signaled a shift in its strategy to “capitalize” on the strong US dollar, which has climbed versus global currencies amid the US Federal Reserve’s aggressive monetary tightening cycle.
CTS Global said “tactical foreign exchange positions” led to a gain of P93.2 million during the nine-month period
This offset the decline at its flagship proprietary trading business, comprised of over 30 traders actively betting on the Philippine Stock Exchange and select equities markets overseas.
International trading revenues of CTS plunged over 78 percent to P8.5 million while domestic trading revenues fell over 63 percent to P19.7 million during the first nine months of the year.
“The markets experienced volatility across asset classes for the first nine months of 2022,”according to CTS Global.
“Starting from the Russia-Ukraine war, global inflation has forced central banks to raise policy rates. This triggered recessionary fears and liquidity problems, causing equity markets to tumble,” it added.
CTS went public last April, raising P1.37 billion to ramp up its global trading business.
Part of the proceeds were also deployed toward peso-denominated debt securities, which pushed CTS Global’s interest earnings by 700 percent to P18.56 million.
“The company has allocated disbursements to global trading (previously held in USD), treasury bills, bonds, and to commodity-driven Indonesia,” the company said in its financial report.
