ICAP predicts “reasonable” year ahead
ICAP, the world’s biggest interdealer broker, said forecasts for full-year profit still appeared reasonable despite volumes slowing significantly in June due to a cut in the appetite for risk.
The company said group revenue in its first quarter grew by eight per cent compared with revenue from continuing operations last year, while group profit grew by five per cent after a strong initial start to the year.
Interdealer brokers match up buyers and sellers across fixed income, foreign exchange, equities and commodities markets, and were more resilient than other financial firms during the financial crisis as they benefit from volatile markets.
The volatile conditions in May boosted electronic broking and post trade processing, interest rate derivatives, commodities and emerging market businesses.
The very low levels of new corporate debt issuance and volatile conditions in equity markets however produced more difficult conditions in credit and equity derivatives.
icap said in a statement: “Volumes slowed significantly in June as our customers’ and end investors’ risk appetites reduced.
“If the mixed pattern of business we have seen during the first quarter continues for the rest of the financial year, then the current range of analysts’ forecasts for ICAP’s profit appears reasonable.”
Analysts are expecting pre-tax profit for the year of £335.5m, according to a poll for Thomson One.