ICAP says activity picking up after 'challenging' third quarter

Interdealer broker ICAP saw shares slip into the red on Thursday after revealing that revenues and volumes declined in the third quarter as a result of 'challenging' conditions.

Interdealer broker ICAP saw shares slip into the red on Thursday after revealing that revenues and volumes declined in the third quarter as a result of 'challenging' conditions.

However, with activity picking up in January, the company said it remains on track to deliver a full-year pre-tax profit within current market forecasts of £280-305m.

As highlighted in its first-half report in November, trading during the final three months of 2012 was tough with a "pronounced slowdown" in Global Broking volumes in December.

Group revenues fell 13% year-on-year with total average daily volumes on ICAP's electronic foreign exchange and fixed income platforms, EBS and BrokerTec down 9.0% at $664bn.

The firm said that Global Broking activity levels were affected by the "ongoing economic, monetary and regulatory uncertainty, which further exacerbated the traditional year-end slowdown".

However, activity levels last month improved, with electronic broker volumes up 17% year-on-year. The improvement was sparked by the 'fiscal cliff' resolution in the US, early repayment of loans by banks to the European Central Bank, and an increase in volatility in core currency pairs at EBS, ICAP's electronic FX platform.

"While December was even slower than expected, we've seen a marked improvement in trading volumes since the beginning of January across our entire business, although it is premature to tell if this is the start of a more sustained upturn," said Chief Executive Officer Michael Spencer.

"We remain well positioned for the opportunities that regulatory changes in the market landscape will bring. The push towards more electronic trading and risk mitigation of OTC derivatives plays to our strengths as we have invested in developing the services and technology that our customers will need to meet the new regulatory requirements."

Shares were down 2.13% at 349.3p by 08:30 on Thursday,

Recommended

Ensign Group: profiting from US private care
Trading

Ensign Group: profiting from US private care

Nursing and care-home specialist Ensign Group should thrive as Americans age. Matthew Partridge picks the best way to play it.
28 Sep 2021
How to profit from India’s high-tech recovery
Share tips

How to profit from India’s high-tech recovery

Professional investor David Cornell of the India Capital Growth Fund, selects three of his favourite Indian stocks to buy now.
27 Sep 2021
Share tips of the week – 24 September
Share tips

Share tips of the week – 24 September

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
24 Sep 2021
Three strong Asian stocks trading at bargain prices
Share tips

Three strong Asian stocks trading at bargain prices

Professional investor Nitin Bajaj of the Fidelity Asian Values investment trust picks three stocks that dominate their industries, earn good returns o…
20 Sep 2021

Most Popular

A nightmare 1970s scenario for investors is edging closer
Investment strategy

A nightmare 1970s scenario for investors is edging closer

Inflation need not be a worry unless it is driven by labour market shortages. Unfortunately, writes macroeconomist Philip Pilkington, that’s exactly w…
17 Sep 2021
What really causes inflation? Here’s what prices since 1970 tell us
Inflation

What really causes inflation? Here’s what prices since 1970 tell us

As UK inflation hits 3.2%, Dominic Frisby compares the cost of living 50 years ago with that of today, and explains how debt drives prices higher.
15 Sep 2021
The times may be changing, but don’t change how you invest
Small cap stocks

The times may be changing, but don’t change how you invest

We are living in strange times. But the basics of investing remain the same: buy fairly-priced stocks that can provide an income. And there are few be…
13 Sep 2021