ICAP profits to be above expectations due to market volatility
ICAP Plc, the world's leading interdealer broker, said on Thursday that it expected pre-tax profit to exceed market expectations thanks to increased volatility in financial markets.
ICAP said that its markets continued to display strong, long term structural growth and said that its medium term industry revenue growth rate was estimate to be 10 per cent per annum.
The firm said that this structural growth rate covered periods of volatility as well as when volumes of wholesale financial markets were very high and also during times when markets were more subdued.
ICAP said increased volatility in the fourth quarter of last year meant that it expected its revenue for the year to date to be significantly ahead of last year.
Michael Spencer, Chief Executive of ICAP, said, As a result of continuing volatility in interest rates, foreign exchange, energy and parts of the credit markets over the period we saw increased volumes in both electronic and voice broking, boosting ICAP's revenues.
Spencer continued, saying that the higher levels of activity in the second half of last year had resumed in the New Year.
He said, Steeper yield curves, volatility in foreign exchange and continuing activity in the credit markets suggest that this period of increased activity may continue for some time.
ICAP said that trading had been strong since September 2007 and that pre-tax profit for the financial year ending 31 March 2008 was expected to be above the current consensus of analysts' forecasts.
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