Share tips: Profit from market volatility

Markets have been subject to extreme volatility over the last few months, says Paul Hill. But that's all welcome news for this inter-dealer broker.

Volatility is good news for the world's largest inter-dealer broker, ICAP, which helps clients organise and process over-the-counter (OTC) derivative trades. These involve taking positions on interest rates (41% of sales), foreign currencies (20%), commodities (11%), credit (9%), equities (9%) and emerging markets (10%).

So why have shares in the company fallen 20% since September? Eurozone concerns, bank lending and credit derivative markets drying up in the fourth quarter of 2011 provide the answer. All this came on top of regulation-inspired sales of risky assets and clients closing out derivative positions early before Christmas. These factors hit transaction volumes, especially in ICAP's voice division (44% of profits).

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Paul gained a degree in electrical engineering and went on to qualify as a chartered management accountant. He has extensive corporate finance and investment experience and is a member of the Securities Institute.

Over the past 16 years Paul has held top-level financial management and M&A roles for blue-chip companies such as O2, GKN and Unilever. He is now director of his own capital investment and consultancy firm, PMH Capital Limited.

Paul is an expert at analysing companies in new, fast-growing markets, and is an extremely shrewd stock-picker.