Market Price Fluctuation Risk of Covered Warrant Liabilities and Financial Instruments
First written in FY2018. 3 of 9 entries say "Worsened", first in FY2020-Q2. Latest entry: FY2023-Q2.
No other company in this theme has enough history to compare yet.
- FY2023-Q2WorsenedAnnual report
「The Company was unable to expand the products offered by CAICA Securities, owing to turbulent cryptocurrency markets triggered by events including the failure of major overseas cryptocurrency exchanges and declining investor appetite for derivatives and derivative products. Trading volumes also remained sluggish.」
Turbulent cryptocurrency markets and declining investor appetite materialized in the business as an inability to expand financial products and sluggish trading volumes. - FY2021-Q1WorsenedAnnual report
「In addition, sales revenue, or trading income, at eWarrant Securities was affected by the restraint of sales of eWarrants referencing individual stocks, previously its core product, compared with the same quarter of the previous year, following losses caused by major equity market volatility in the second quarter of the previous fiscal year. The launch of new products intended to offset this decline was also delayed.」
The restraint of sales of core products following past market-related losses and delays in launching new products continued to weigh on trading revenue in the current quarter. - FY2020Monthly profitability after continued full-year losses and a management reviewAnnual report
「Following losses caused by major financial market volatility in the second quarter, the Company reviewed its risk management and management framework. As a result, it recorded profits for 2 consecutive months in May and June, but from July onward it did not recover enough to offset the decline in the second quarter.」
After losses caused by sharp market movements, a review of risk management and the management framework resulted in profits for 2 consecutive months in May and June, while the Financial Instruments business remained loss-making for the full year. - FY2020-Q3MitigatedAnnual report
「In response to losses in March caused by market volatility resulting from the impact of COVID-19, eワラント証券 strengthened overall risk management and its trading systems.」
After sharp market movements caused trading losses, the Company strengthened overall risk management and its trading systems. - FY2020-Q2WorsenedAnnual report
「During the cumulative second quarter, eWarrant trading became more active as various markets, including the stock market, underwent sharp changes due to the impact of COVID-19. However, trading revenue deteriorated because market volatility exceeded expectations.」
The market price fluctuation risk of financial instruments materialized as sharp market movements caused by COVID-19 and a deterioration in trading revenue. - FY2020-Q1MaterialisedAnnual report
「The deterioration in trading income caused by turmoil in financial markets following the sudden deterioration in relations between the United States and Iran in January and the global spread of pneumonia caused by the novel coronavirus, together with increased upfront investment costs for developing new products, temporarily weakened earnings.」
Weak trading revenue amid turmoil in the financial markets materialized as a deterioration in the profitability of the Financial Instruments business. - FY2019-Q2MitigatedAnnual report
「Since the end of January 2019, performance has been improving following a change in the hedging policy. The Company will continue strengthening its internal management framework in preparation for generating future earnings.」
After losses caused by the market sell-off and weak hedging performance, the hedging policy was changed at the end of January 2019, and performance was reported to be improving. - FY2019-Q1MaterialisedAnnual report
「During the cumulative first quarter, earnings temporarily deteriorated due to weak hedging performance amid changes in the market environment for eWarrants since October 2018, as well as higher costs from strengthening the internal control framework. As a result, revenue from the financial instruments business was ¥82 million and the operating loss was ¥126 million.」
The risk of losses after hedging due to market price fluctuations in covered warrants and other instruments materialized as weak hedging performance and an operating loss of ¥126 million. - FY2018First statedAnnual report
「Because covered warrant liabilities are affected by fluctuations in the prices of their underlying assets, losses may be incurred even when hedging transactions are conducted.」
With the launch and expansion of the Financial Instruments business, a new risk was disclosed: covered warrant liabilities are affected by fluctuations in underlying asset prices, and losses may occur even after hedging.