Tullett Prebon plagued by low trading activity

Michael Bow
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CITY brokerage Tullett Prebon yesterday blamed ongoing problems with trading volumes and confusion over incoming swaps regulations for a four per cent slump in revenues for the first four months of this year.

The company, led by straight talking chief executive Terry Smith, said revenues from January to the end of April fell to £293m, due to regulatory uncertainty in the over-the-counter derivatives markets and poor market conditions hampering trading.

The four per cent drop represents a slower pace of decline than the first two months of the year, when it reported a five per cent fall in revenues. Shares in the company rose seven per cent yesterday to close at 269.1p after a late surge of buyers in the stock.

“As expected, market conditions have continued to be challenging,” it said.

Tullett, which makes its money by matching buyers and sellers of currencies, bonds and swaps, said it was pushing on with a hybrid e-broking service to respond to the problems.

It also recently got at least 12 banks on board to use its interest rate swap platform, which will give banks streaming liquidity for interest rate derivative trades.

However, the firm was hit with a £6.8m cost related to legal action pursued against rival US firm BGC Partners over a dispute concerning the hiring of its workers by BGC in 2011. In January, the US financial watchdog Finra kicked out a damages claim by Tullett over nine brokers it claims were poached from its repo desk between 2009 and 2011. Arbitration is continuing, it said.