Global Securities Corporation
Today, communications happen in mere seconds, investment opportunities arise more quickly, response times are shaved and markets are open virtually around the clock. The factors influencing world markets and exchanges are broadcast as they happen. Information has become the most precious commodity and it is increasingly difficult for investors to independently measure the risk and rewards associated with each opportunity.
Global Securities Corporation helps investors navigate through it all. Timing and first-rate research are essential. Along with trading links to every major market in the world, the firm has been able to provide customized solutions for every type of investor for over 25 years.
Global was founded in 1986 as commodities firm, Global Futures Corporation. The following year Global Securities Corporation was also established to provide full-service brokerage on the equities side of the business. Today, the two firms are one, offering a diverse range of investment products and services to commercial enterprises, institutional clients and retail investors alike.
Global is amongst the elite few firms in Canada who can offer full-service trading, investment planning and portfolio management services using securities, commodities and derivative products all in one place.
The Canadian Business Journal sat down with Art Smolensky, Chairman and Founder of Global, Robin Alvarez de Araya, Vice-President of Derivatives, Sue Kanciar, Manager of Marketing & Communications, and Elvis Picardo, VP of Research to discuss the services provided by the firm, general market conditions and sentiment.
Smolensky has enjoyed the rare privilege of turning his avocations into successful business ventures. Smolensky started investing at 14 when his father, grandfather and uncle started a small investment club. Later on, an interest in photography while pursuing a PhD in Chemistry at the University of British Columbia led to the establishment of a photographic company. By the time Smolensky sold the business 14 years later, it had branched out into video and computer sales and grown into a chain of highly successful specialty retail outlets. With a solid background in scientific research, proven business acumen and a global outlook sharpened while establishing commercial ties in Asia and Europe, Smolensky turned his interest to the investment industry and as he says, “the rest is history.”
“I started with futures and had a bit of a vision of the stock market, expecting that as baby boomers age, people may not want to be as speculative in the futures markets and might want more stable investments. That’s how we branched into the stock markets. Originally we were 90 percent futures and 10 percent stocks … it completely reversed within 10 years’ time,” says Smolensky.
Hedge or Speculate – Global Does It All
“We serve both institutional and retail clients. What draws people to us is the fact that we are a one-stop shop. We provide what most firms do, plus the option to trade futures (derivatives), which are products that require a level of expertise and attention that makes them inadvisable for the online, do it yourself investor. Sophisticated investors recognize that we have tools that can be used to complement their personal portfolios and hedge against their business risk.
Why not do it all in one place, with our help?” says Kanciar.
The employee-owned firm is proud of its high performance standards and the personalized service it offers. The firm has 15 offices located throughout British Columbia, Saskatchewan, Manitoba, and Ontario and has plans to re-establish its presence in Alberta. The firm has approximately 125 employees, 95 of whom are securities, futures and/or options licensed. Global is a member of the Canadian Investor Protection Fund and is registered to trade in most provinces and territories regardless of physical presence. Global is a member of all Canadian exchanges and has trading links to all major world exchanges.
“We encourage our advisors to diversify and become dual licensed so they can be flexible and move with the times, adjusting their investments and strategies appropriately for their clients as the need arises,” says Kanciar.
The firm continues to grow and faces the same challenges every firm in the financial services industry does. To stay ahead, talent acquisition is key. Finding advisors and staff with advanced expertise and proven success is now the main objective to ensure clients’ needs and interests continue to be met with the highest of standards.
“We are seeing many companies going out of business. I have been blessed by attracting talent and having people who have been doing this for a long time.
This specialization (in futures for example) is not for every professional,” says Smolensky.
“Whether you are a farmer looking to hedge grains or livestock, a lumber mill hedging with lumber futures or a speculator trading currencies, our firm probably has a broker that specializes in the same products. Many of our brokers are dually licensed so if you only trade equities and want to mirror a futures trade, having a broker with extensive futures knowledge can be invaluable,” says Alvarez de Araya.
According to Smolensky, the commodities markets went through a 10- to 12-year bear cycle with deflation in the market and gold getting as low as $300. Even from this, the global economy continues to grow at about two per cent a year and with a growing global population “There is always demand for commodities – food stuffs, metals, financial services. We have been a beneficiary of this. This is a very specialized area, and not many people have the expertise. To be a commodities futures broker you need to be a lot more mathematical then the average stock broker. These markets can move a lot faster with more leverage offered to clients.”
“What happened in 2008 was a shock to the system. The public lost confidence in the market and institutional investors have been looking to buy bargains.
Yes, the stock markets have been rallying, but on relatively low volume so it has affected many brokerage firms, whether it’s because they didn’t move with the times or didn’t change their products,” says Smolensky.
“Investors want to see more than unrealized capital gains in their portfolios, especially as the 2008 bear market showed us that these gains can dissipate quite rapidly. In this era of low interest rates, investors want to see regular income in their portfolios from dividends, interest payments, and option premiums, so we incorporate a yield-based approach for most portfolios,” says Picardo.
Global helps clients access the investment community and businesses, and meet the challenges of today’s global market place. To complete the full range of services offered, Global also has a capital markets team that works closely with corporate clients of all sizes and stages of development to raise capital, provide sound financial advice, investment banking services, equity research and institutional equity sales and trading. Historically the firm has partnered with companies in industries ranging from high-technology, biotechnology, mining, energy, and real estate.
The “raising of capital” business is effectively “owned” by large banks and a few large brokerage firms. “An IPO (initial public offering) for a larger company requires let’s say $500 million. People in corporate finance have relationships with bank-owned firms that can write that check, and then have their sales teams offer the stock to investment funds, mutual funds, and retail investors. A company of our size can offer financing in the mid-level field – up to $10 million. In the past 12 months we have retained experts who have the relationships in this segment and help us raise these monies,” says Smolensky.
As a full service broker, Global provides guidance and more importantly a choice to clients — from equities, options and futures, to convertible debentures and IPOs procured by the firm. It’s all there and backed by experienced professionals. Global truly is a rare sight in the investment community today. Where other firms and banks offer only a limited number of products (or products they can profit from the most), Global has become a unique alternative for investors seeking access to a full line of investment solutions, all in one place.