Banking, Earnings and Investing :: World finance

Baidus quarterly revenue falls 2.6 percent

´╗┐Baidu Inc (BIDU. O) reported a second straight drop in quarterly revenue as regulatory scrutiny into healthcare and related advertisements continued to take a toll on the Chinese internet search giant. The company's revenue fell 2.6 percent to 18.21 billion yuan ($2.65 billion) in the fourth quarter ended Dec. 31 from 18.70 billion yuan a year earlier. Analysts on average had expected revenue of 18.23 billion yuan, according to Thomson Reuters I/B/E/S. The drop, however, was within the 17.84-18.38 billion yuan range the company had previously forecast. The revenue slowdown comes as Baidu rides out a public and regulatory backlash triggered by the death of a 21-year-old student who underwent an experimental cancer treatment that he found using the company's search engine.

Analysts estimate that healthcare accounts for about 20-30 percent of Baidu's search revenue, which represents more than 80 percent of the company's total sales. Net income fell 83.3 percent to 4.13 billion yuan.

However, Baidu's U.S.-listed shares rose 2.4 percent after the bell on Thursday as the company's adjusted profit came well above analysts' estimate. The company earned $6.49 per share, excluding items, while analysts were expecting $6.07.

HP Enterprise misses revenue estimates, cuts FY profit forecast Hewlett Packard Enterprise Co, the corporate hardware and enterprise software business of Hewlett-Packard Co, reported lower-than-expected quarterly revenue and cut its full-year profit forecast.

NYSE plans trial run for Snap IPO The New York Stock Exchange will conduct a trial run of Snap Inc's initial public offering on Saturday, according to a notice given last week to stock traders, in anticipation of what is expected to be the biggest U.S. technology IPO in nearly five years.

Google to help publishers find malicious comments on articles BRUSSELS Alphabet Inc's Google and subsidiary Jigsaw launched on Thursday a new technology to help news organizations and online platforms identify abusive comments on their websites.

Forex brokers eye U.S. market as Trump vows to deregulate

´╗┐Retail currency brokers are considering operating in the United States after a nearly seven-year absence, if President Donald Trump is able to carry through on his pledge to deregulate financial markets. The prospect of lighter regulations has revived interest in the country among foreign exchange brokers such as UFX and Alpari, which cater to small and individual investors. It has also brightened the outlook for an industry that has struggled and lost market share to places with looser regulations in Asia and Europe."Key players in the vast retail FX market are gearing up for a hopeful re-entry," said Paul Sirani, chief market analyst, at online currency broker Xtrade in Limassol Cyprus. He declined to identify those retail FX players. Sirani's observation is shared by many market participants such as Javier Paz, senior analyst at research firm Aite Group, and Meir Velenski, a long-time FX practitioner who set up his own financial consulting group. A return to the United States could mean physically setting up an office in the country as a U.S. entity, or in some cases maintaining an overseas headquarters while soliciting business in the United States. At the heart of the forex brokers' optimism is the possible repeal of the Dodd-Frank Act. Signed into law in 2010 in response to the global financial crisis, the Dodd-Frank financial reform legislation aims to overhaul business practices on Wall Street and protect consumers. But its passage caused the demise of many U.S. retail FX businesses. In 2006, there were 40 companies operating in the United States offering FX trading to retail customers. After Dodd-Frank, that number has shrunk to three -- GAIN Capital Holdings, Inc. GCAP. O; Canada-based Oanda, and TD Ameritrade (AMTD. O). Under Dodd-Frank rules, enforced by the CFTC, firms offering retail forex trading in the United States must maintain minimum capital of at least $20 million, plus 5 percent of the amount by which liabilities to retail forex customers exceed $10 million. By comparison, the minimum capital requirement in Cyprus, where many FX brokers have moved, range from 40,000 euros ($42,680) to one million euros ($1.067 million). Cyprus, with many FX brokers under its jurisdiction, has become popular with market participants because its European Union membership allows companies based in that country to provide FX services to other EU members.

Dennis de Jong, managing director of retail forex trading firm UFX in Limassol, Cyprus, said he would "absolutely" be in favor of a move to the United States if the minimum capital requirement is reduced."Obviously the regulators need to be very strict in terms of how you protect the client... but in general lowering the (capital) threshold would be good," he added. The Trump administration has not said anything specific about FX regulation under Dodd-Frank. But House Financial Services Committee Chairman Jeb Hensarling said in a CNBC interview this week that much of the law could be undone through a number of ways."The $20-million bond required of U.S. retail FX business pretty much precludes anyone from founding a start-up in this business," said Joe Trevisani, chief market strategist, at WorldWide Markets, an online multi-asset trading platform in Woodcliff, New Jersey. WorldWide Markets, regulated by the Financial Conduct Authority in Britain, does not take U.S. clients.

Trevisani was a partner at currency broker FX Solutions, which exited the U.S. market in 2013, a Dodd-Frank casualty. Dodd-Frank also prohibited FX overseas firms from soliciting U.S. business. STANDBY POSITION Russian currency broker Alpari, which left the United States in 2011 due to onerous regulations, is keen to see what happens with the new Trump administration.

"We are in standby position. Everybody is looking at the U.S. right now for business and we're curious to see how things change," said Roberto d'Ambrosio, chief executive officer at Alpari Research and Analysis Limited in London. D'Ambrosio said Alpari's decision to return to the United States would hinge partly on easing regulations such as rules on forex reporting. "The reporting requirement is really, really heavy," said the Alpari official. If the costs of reporting could be eased somewhat, then this would help, he added. SHRINKING U.S. MARKET U.S. retail FX trading volume has shrunk since Dodd-Frank, data showed. In 2016, the U.S. share of the $374 billion daily global retail currency trading volume has been cut in half to just 3 percent, or $11 billion, according to estimates from research firm Aite Group. Prior to Dodd-Frank or in 2009, the U.S. share was 6 percent, or $17 billion, of what was then a global daily retail market of $276 billion. Some market participants have pointed to the CFTC, Dodd-Frank's regulator, as the culprit. Dodd-Frank gave the CFTC regulatory powers to oversee the U.S. retail FX sector."The CFTC could have created a safe environment in U.S. retail FX by working more closely with the industry," said Aite's Paz in Salt Lake City, Utah.