Volatile markets help push online dealer IG to share record
By Clare Hutchison
LONDON (Reuters) - Volatile markets helped online dealer IG Group rack up an increase of at least 17 percent in revenues in its second quarter as traders speculated on interest rates and global growth, sending its shares to a record high.
IG Group, which provides stockbroking and trading services to private investors, said the company had seen a significant rise in client activity in the past three months.
IG said in its brief trading update on Tuesday that it had "performed very well" and would achieve "quarterly revenue ahead of its previous highest quarter at the end of the 2013 year".
"This will place IG in a robust position as it enters the second half of the financial year," the company said, providing no financial details.
In the final quarter of the financial year ended May 2013, currently its strongest ever, IG reported revenues of 104.3 million pounds ($163.5 million). Tuesday's forecasts implied a rise of more than a sixth in the quarter ending in November 2014, compared to revenues of 89.1 million in the second quarter of its last financial year.
IG, which offers spread betting and allows clients to trade financial derivatives like contracts for difference, said volatile financial markets had presented considerably more trading opportunities, particularly last month.
The CBOE VIX index, a broadly used gauge of market volatility based on U.S. equity option prices, spiked to a three-year high in October.
IG shares were changing hands at 665.5 pence at 1120 GMT, below a record high of 673.5 pence touched earlier but up 2.6 percent.
In a note to clients, Citi analysts, who have a "buy" rating on the stock, forecast six-month revenue of 197.1 million pounds, a rise of almost 8 percent from last year.
They said the key question remains whether the strong trading environment can continue into the second half.
IG has been diversifying in attempt to provide a cushion against lower trading volumes in quieter markets, expanding overseas and adding new services.
In September it launched a stock broking service in Britain and Ireland and received a license to operate in Switzerland.
It has also been trying to grow the average revenue generated by each client by appealing to bigger spenders. It has extended trading hours for U.S. stocks and raised minimum deposits.
IG will report first-half results on Jan. 20.
(Additional reporting by Francesco Canepa; Editing by Mark Potter and Clara Ferreira Marques)
