ICAP in the doldrums

Inter-dealer broker ICAP said profits were down in the first quarter and trading volumes would remain subdued for at least the next few months.

The firm said group revenue for the first quarter was 9% lower compared with the same quarter last year.

Broking activity in the first quarter was thin as the ongoing Eurozone crisis, the Queen's Jubilee and regulatory uncertainty reduced trading volumes, it said.

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On ICAP's electronic foreign exchange and fixed income platforms total average daily volumes in the three months to the end of June were $712bn, a fall of 19% year-on-year.

However, it added that there was strong growth in our post trade services division.

"The sluggish global economy and Eurozone crisis are inevitably leading to reduced trading volumes despite some active days," said CHief Executive Michael Spencer.

"The Federal Reserve's decision to extend Operation Twist and the lack of aggressive action to resolve the Eurozone crisis is not helping to normalise financial market activity in the near-term."

This situation looks unlikely to change soon, with the firm warning the London Olympics, US elections, and regulatory uncertainty affecting some of ICAP's customers, would probably mean trading volumes remain subdued.

ICAP currently expects pre-tax profits for the year to 31 March 2013 to be towards the middle of analysts' forecasts of £335m to £365m, compared to £354m last year it said.

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