KBW Likes That Gain Capital Survived the Extreme Move in the Swiss Franc

Gain Capital Holdings Inc (NYSE: GCAP) hosted their inaugural analyst dinner, which was dominated by the big topic of losses at competitor FX brokers after the extreme CHF/EUR move Thursday. According to analysts at Keefe, Bruyette and Woods (KBW), management had already announced earlier that it didn't expect any material impact from the currency move. They learned at the dinner that it had previously taken steps to raise margin requirements and liquidation requirements as well as pull back market making positions. Analysts at KBW go on to say " We think it will benefit GCAP's multiple in the long term that its business model withstood such an extreme movement in the currency without out-sized costs to its market making business. However, we also believe that issues at competitor brokers and heightened investor concerns about potential volatility in earnings of these businesses could limit valuation upside for a bit."Shares of GCAP are trading slightly higher in pre-market trade at 8.70