HOW FOREX BROKERS MAKE MONEY

In the foreign exchange market, traders and speculators buy and sell various currencies based on whether they think the currency will appreciate or lose value. The foreign exchange, or forex, market is high risk and sees more than $5 trillion dollars traded daily. Traders have to go through an intermediary such as a forex broker to execute trades. No matter the gains or losses sustained by individual traders, forex brokers make money on commissions and fees, some of them hidden. Understanding how forex brokers make money can help you in choosing the right broker. (Related 5 Tips For Selecting a Forex Broker)

Role of the Foreign Exchange Broker

A foreign-exchange broker takes orders to buy or sell currencies and executes them. Forex brokers typically operate on the over-the-counter, or OTC, market. This is a market that is not subject to the same regulations as other financial exchanges, and the forex broker may not be subject to many of the rules that govern securities transactions. There is also no centralized clearing mechanism in this market which means you will have be careful that your counterparty does not default. Make sure that you investigate the counterparty and his capitalization before you proceed. Be vigilant in choosing a reliable forex broker. (Related Top 10 Forex Brokers For Beginners)

Forex Broker Fees

In return for executing buy or sell orders, the forex broker will charge a commission per trade or a spread. That is how forex brokers make their money. A spread is the difference between the bid price and the ask price for the trade. The bid price is the price you will receive for selling a currency, while the ask price is the price you will have to pay for buying a currency. The difference between the bid and ask price is the broker’s spread. A broker could also charge both a commission and a spread on a trade. Some brokers may claim to offer commission-free trades. Actually, these brokers probably make a commission by widening the spread on trades.

The spread could also be either fixed or variable. In the case of a variable spread, the spread will vary depending on how the market moves. A major market event, such as a change in interest rates, could cause the spread to change. This could either be favorable or unfavorable to you. If the market gets volatile, you could end up paying much more than you expected. Another aspect to note is that a forex broker could have a different spread for buying a currency and for selling the same currency. Thus you have to pay close attention to pricing.

In general, the brokers who are well capitalized and work with a number of large foreign exchange dealers to get competitive quotes typically offer competitive pricing.

Risks of Foreign Exchange Trading

It is possible to trade on margin by depositing a small amount as a margin requirement. This introduces a lot of risk in the foreign exchange market for both the trader and the broker. For example, in January 2015, the Swiss National Bank stopped supporting the euro, causing the Swiss franc to appreciate considerably versus the euro. Traders caught on the wrong side of this trade lost their money and were not able to make good on the margin requirements, resulting in some brokers suffering catastrophic losses and even going into bankruptcy.

The Bottom Line

Those contemplating trading in the forex market will have to proceed cautiously—many foreign-exchange traders have lost money as a result of fraudulent get-rich schemes that promise great returns in this thinly regulated market. The forex market is not one in which prices are transparent and each broker has his own quoting method. It is up to those who are transacting in this market to investigate their broker pricing to ensure that they are getting a good deal.

5.6 MILLIONS, IS THE SAUDI ARABIAN LABOR FORCE!

The Ministry of Economy and Planning said that the Saudi labor force reached 5.6 million workers in 2014; 4.4 million of them are males approximately 79%, while female workers reached 21 percent of the labor force in the Kingdom. According to the annual report for 2014 published by the Saudi Arabian newspaper Al-Youm, that ministry stated that the Saudis hiring rate reached 88.3 percent by the end of 2014, while the unemployment rate holds the 11.7 percent which represent about 651.3 thousand people.

The ministry also showed that two-thirds of the workforce in Saudi Arabia are between 20 and 39 years old, representing from the one’s with high school degree in the Saudi work force by 36 percent, followed by those obtaining a college degree by 34 percent of the labor force, followed by the group of (40 to 54) years old which increased by 30.6 percent.

The ministry also said that the number of citizen workers in the government sector reached 3.25 million employees representing about 66 percent of total employees, compared to about 1.25 million employees in the private sector, representing 25.3 percent of the total employees. The employment growth in private sector accelerated during the past year, with a growth rate of 14.2 percent compared to 13.5 percent in 2013. The number of employees in the government sector increased during 2014 by about 103 thousand employees, most of them female, only 43 thousand employees were males.

The ministry said that although employment growth in the private sector, it did not reduce the rate of unemployment among Saudis. Pointing out that the areas of employment opportunities in the private sector are limited for females showing that the private sector is not capable of solving the unemployment problem. In 2014 the ministry recorded unprecedented growth in the Saudis who is not willing to work by 297 percent from 14.1 thousand in 2013 to 56 thousand in 2014, due to the unskilled jobs offered them by the private sector companies, which didn’t commensurate with their qualifications, as most of them has a college degree.

DECLINES IN THE GULF STOCK MARKET AFTER RELUCTANCE OF INVESTORS TO PARTICIPATE IN RAMADAN

The Gulf stock markets witnessed a decline on Thursday’s session despite the high oil prices due to reluctance of some local individual investors to participate in with the beginning of Ramadan. The main index of the Saudi market declined by 0.4 percent and Al Rajhi Bank stock has declined by one percent, causing a huge pressure on the index.
Al Rajhi shares also witnessed a rise gains by 3 percent this week with the investors anticipation for a strong statement from the US Federal Reserve after the committee monetary policy-making meeting, as it help raising interest rates in the United States which Saudi Arabia will follow due to the big link between the riyal to the dollar profit margins of banks in the Kingdom such as Al Rajhi. But the US Federal Reserve cut its forecast for economic growth in the United States in 2015 on Wednesday due to the weak start of the beginning of the year. There is a negative factor for the market to Saudi Arabia due to the absence of large funds since the opening of market to foreign direct investment last Monday.
And based on the latest data from the stock market which shows that the opening market on Wednesday for foreign institutions didn’t shake the market at all. According to Reuters most of the foreigners bought local shares with three million dollars value from Monday to Wednesday, and there is a possibility of non-registration for these flows because of its smallness.
And same In Dubai, the Dubai’s index fall by 0.6 percent, with the decline in Emaar the lead stock by one percent after Emaar Egypt priced its public offering to 3.8 Egyptian pounds per share. The company stated this month that the offer will be priced between 3.5-4.25 pounds per share. The shares of Al-Rahn company which Emaar owns great share declined by 4.4 percent although been actively traded stock in Dubai. Most of the Gulf stock markets witnessed declines except The Qatar Exchange index, which increased by 0.1 percent, paced by Qatar National Bank, which rose 2.2 percent to 188 riyals.
And for the Egyptian Stock Exchange’s main index rose by 0.2 percent. And the Shares of the Swedish Electric declined by 2.3 percent while the shares the Sixth of October for Development and Investment (Sodic) rose by 0.7 percent.

SAUDI BANKS RECORDED 3 BILLION DOLLARS PROFITS IN THE FIRST QUARTER OF THIS YEAR ACCORDING TO ANADOLU AGENCY STATISTICS

In a new statistical carried out by Anadolu Agency, Saudi banks profits rose by 5% from last year. total profits of Saudi banks recorded about 12 billion Riyals (About 3 Billion Dollars). Saudi Hollandi Bank and Arab National Bank has finally declare the final profit making number of Saudi banks registered in the stock exchange, which announced its final net profits 12 banks of them six banks could exceed the barrier of one billion Riyals net profits each.

Three billion dollars profits
Picture from Pixabay.com
As for the order of the banks in terms of profits (According to the statistics of Anatolia agency ) is as follows:

1- National Commercial Bank: 2.60 billion riyals
2- Al Rajhi Bank: 1.52 billion riyals
3- Samba bank: 1.28 billion riyals
4- Riyad Bank: 1.17 billion riyals
5- The Saudi British Bank (SABB): 1.12 billion riyals
6- Saudi Fransi bank (BSF): 1.05 billion riyals

Statistics showed that among the banking sector only 11 banks recorded raise in profits, While profits fell in one bank (Al Rajhi Bank) by 11% from last year. And on a quarterly basis, segment profit in the first quarter 2015 increased by 15% from the fourth quarter of last year, with the profit of 9.7 billion riyals.

Banks said in a report published on the Saudi stock market site that the increase in profits came as a result of the increase in operating income while Al Rajhi Bank said that the reason for the low profits is the increase in expenses.

DO YOU NEED A CORPORATE BANK ACCOUNT?

Question: Do I need a corporate bank account?
Answer:
Yes. Opening a 
corporate bank account is one of the first things you should do when starting a business.
corporate bank account is crucial for keeping your business and personal expenses and income separate and getting your new business’s record keeping off to a good start.

Business Credibility
Having a corporate bank account provides your new business with credibility (with both customers and potential creditors) which is especially important when you’re starting a business.

If some of your customers use cheques to pay your invoices it is much more professional in appearance to have them writing cheques to “Acme Corp” rather than to “John Smith”, as does paying your business invoices with separate business cheques or a separate business credit card. If you want customers to be able to write cheques to your business name you need a corporate bank account.

Taxation
Having a separate business account is also important for tax purposes. One of the easiest ways to attract attention from the Canada Revenue Agency (CRA) is to commingle business and personal expenses and bank accounts. Keeping a separate corporate bank account with all of your business-related financial transactions provides a clear trail of business revenue and expenses in case you are audited by the CRA.

While it is recommended to have a separate account for both sole proprietorships and incorporated businesses, it is particularly important for corporations.

A corporation is treated as a separate entity and as such the personal assets of the owner(s) are sheltered from potential liability.

However, in certain cases (such as gross negligence by directors or owners of the company) the courts may disregard the “separate entity” concept of a corporation and hold the directors or shareholders of a company personally liable.

This is known as “piercing the corporate veil”, and one of the criteria which may be used to determine this is the degree of separation between the financial activities of the owner(s) and of the business. As such, a separate corporate bank account for an incorporated company is a must.

SEAT CONFIRMS NEW SUV MODEL: IS SKODA NEXT?

Seat has officially announced today that it is developing an all-new compact SUV model to join the Spanish outfit’s range in 2016.

A Seat SUV? Tell me more

Seat says that the new SUV is already two years into development at the company’s Martorell technical facility in Spain. The as yet unnamed car is likely to share engines and platform with other ‘compact SUVs’ made by parent company, Volkswagen Group, such as the next-gen VW Tiguan and Audi Q3, which will use the MQB modular architecture.

Pictured, right, is the Seat IBX concept, which was unveiled at the 2011 Geneva motor show. While the IBX was simply touted as a design study pointing the entire Seat range’s then-new design language, it gives a few clues as to how Seat’s new SUV will look when it comes on stream in 2016. The IBX (which sported an electric motor good for 27 miles of EV range) made provision for both TSI petrol and TDI diesel four-cylinder engines, and a part-time all-wheel drive system.

Why is Seat entering the compact SUV market?

Because it’s a car sales goldmine. According to Seat’s own figures, the compact SUV class now accounts for one million car sales every year in Europe – a huge sector that the Spanish brand has been conspicuously absent from.

Sales of small urban SUVs have shot up by some 40% since 2009, says Seat, which forecasts further increases in the number of buyers trading in conventional hatchbacks and estates for trendy crossover SUVs. Time for Seat to get a slice of the action, then…

The closest thing Seat’s had to an SUV previously was the half-hearted Altea Freetrack, launched in 2007. Essentially a jacked-up MPV wearing plastic cladding and packing a part-time all-wheel drive system, it never made the impact cars like the top-selling Nissan Qashqai and Kia Sportage managed.

However, an all-new SUV using VW oily bits and a suit as sharp as the current Leon’s could be a promising recipe for success. Seat posted a 10.6% increase in global sales in 2013.

What about Skoda – will we see a new SUV from VW’s Czech arm soon?

It’s on the cards. When quizzed at the 2014 Geneva motor show, Skoda’s sales and marketing board member Werner Eichhorn told CAR: ‘We are on the way to join the mega-trend. We are quite okay with Yeti – we’ve had great success in the UK – [but] there is enough space to add another car, perhaps in the next two years, above Yeti. We are confident that the brand could support such a car.’

A Skoda spokesman confirmed to CAR that although a new Skoda SUV was under consideration, no such model had been confirmed for production. Should a new Skoda 4×4 (bigger and pricier than the best-selling Yeti) get the green light, it wouldn’t arrive until 2016 at the earliest, CAR understands.

OIL SOURCES: CONTRACTUAL DISAGREEMENTS BETWEEN ARAMCO AND KOREAN COMPANY POSTPONE THE ESTABLISHMENT OF JAZAN REFINERY

Sources in oil industry sector said that contractual differences between Saudi Aramco and Korean SK for Engineering & Construction led to the postponement of the establishment of an oil refinery with capacity of 400 thousand barrels per day in Jazan.
The sources said in Saudi Arabia that despite the controversy that revolves around compensation claims because of orders change, the contract was not terminated, as press reports in the region reported. The sources said that other contractors in the project have faced similar problems and demanded compensation for the losses suffered by them due to the design change and delays due to the slow pace of work in infrastructure associated with the project.
It was scheduled to complete the establishment of the compound in late 2016 but sources in oil industry sector in the kingdom said last year that it is facing a delay between six to 12 months due to delays in the implementation of infrastructure works. A spokesman for SK Engineering and Construction said: the company is still in talks with Saudi Aramco for the establishment of crude distillation units and vacuum distillation.
Aramco declined to comment on a question about whether it had ended the contract with SK Engineering. Source asked not to be identified said, “Who will carry out the implantation in the case of termination of the contract? There will be a significant impact on the timetable for the entire refinery and on all the contractors and on Aramco.” Since the awarding of contracts in 2012, the implantation process has achieved only limited progress.
It is scheduled that: the refinery – when completed – will address the medium and heavy raw materials to produce about 75 thousand barrels per day of gasoline and 250 thousand barrels per day of low sulfur diesel also will include products and materials, including sulfur and asphalt paraxylene and liquefied petroleum gas.

DECLINES IN THE GULF STOCK MARKET AFTER RELUCTANCE OF INVESTORS TO PARTICIPATE IN RAMADAN

The Gulf stock markets witnessed a decline on Thursday’s session despite the high oil prices due to reluctance of some local individual investors to participate in with the beginning of Ramadan. The main index of the Saudi market declined by 0.4 percent and Al Rajhi Bank stock has declined by one percent, causing a huge pressure on the index.
Al Rajhi shares also witnessed a rise gains by 3 percent this week with the investors anticipation for a strong statement from the US Federal Reserve after the committee monetary policy-making meeting, as it help raising interest rates in the United States which Saudi Arabia will follow due to the big link between the riyal to the dollar profit margins of banks in the Kingdom such as Al Rajhi. But the US Federal Reserve cut its forecast for economic growth in the United States in 2015 on Wednesday due to the weak start of the beginning of the year. There is a negative factor for the market to Saudi Arabia due to the absence of large funds since the opening of market to foreign direct investment last Monday.
And based on the latest data from the stock market which shows that the opening market on Wednesday for foreign institutions didn’t shake the market at all. According to Reuters most of the foreigners bought local shares with three million dollars value from Monday to Wednesday, and there is a possibility of non-registration for these flows because of its smallness.
And same In Dubai, the Dubai’s index fall by 0.6 percent, with the decline in Emaar the lead stock by one percent after Emaar Egypt priced its public offering to 3.8 Egyptian pounds per share. The company stated this month that the offer will be priced between 3.5-4.25 pounds per share. The shares of Al-Rahn company which Emaar owns great share declined by 4.4 percent although been actively traded stock in Dubai. Most of the Gulf stock markets witnessed declines except The Qatar Exchange index, which increased by 0.1 percent, paced by Qatar National Bank, which rose 2.2 percent to 188 riyals.
And for the Egyptian Stock Exchange’s main index rose by 0.2 percent. And the Shares of the Swedish Electric declined by 2.3 percent while the shares the Sixth of October for Development and Investment (Sodic) rose by 0.7 percent.

33% INCREASE IN PROFITS OF COMMERCIAL BANK OF KUWAIT !

According to statistics published in Al-maal economical newspaper; Quarterly earnings of Commercial Bank of Kuwait (CBK) increased by 33% compared to the same period last year, recording 13.3 Million Dinar, what equals about 25.36 Million Dollar. And according to the statement which Al-maal newspaper received a copy of it, operating profits of the bank reached 53 Million Dinar in an increase by 7% compared to opening profits of the same period last year.
Yaaqoub Ibrahim the official speaker of CBK Bank commented on the financial results this year saying that total assets of the Bank are about 4.3 Billion Dinar as at the end of June 2015 and the bank has witnessed an increase by 11% in bank deposits at the first half of 2015.
It’s worth saying here that capital adequacy ration of CBK at the end of June was 18.26%, while the capital adequacy ratio allowed by Kuwait’s central bank is 12% ! and leverage ratio was 12% which is in excess of three times the allowable by Kuwait’s central bank.
CBK is considered to be one of the most important and vital financial institutions in Kuwait which provides both individuals and companies by multiple banking and insurance services. The capital of CBK is 141.1 Million Dinar divided into 1.41 Billion shares with a one Dinar nominal value for the share.

SAUDI ARABIA’S STOCK LOSES 12 BILLION DOLLARS IN ONE WEEK!

Compared to last week, their’s an obvious declining in Saudi Arabia’s stock market this week due to the  renewal negative impact of falling in oil prices, moreover the reluctance of some consumers from buying shares fearing of loss.

By the middle of the week,the prices of the shares went higher due to the improvements in the oil prices, but it declined later by the end of the week, and with the continuation of price volatility, the consumers became more accurate in buying the big companies’ shares, specially those that were affected by the falling of oil prices.

So the speculators moved to the small companies’ shares,in which some of it achieved higher rates, for example: the shares of “fish”that it’s gains amounted to 20.3% last week,the shares of “electric industries”that rose to 10.64%, and the shares of “A C E” that was rose to 7.65%.