London trading firm ICAP’s electronic broking system, which matches market making banks with currency traders, saw a huge $200 billion (£150.7 billion) of currency move over its platform on June 24, the day after Britain shocked the world by voting to leave the European Union.
Volumes on the system were over two and a half times normal. In May, trades over the platform averaged $75.7 billion each day.
“We have made a good start to the year and remain cautiously confident looking ahead despite a more uncertain macroeconomic outlook for the UK and the global economy since the Brexit vote in the UK on 23 June. The referendum result was a tremendous shock to global financial markets but our platforms demonstrated resilience. We handled more than $200 billion of FX volume on 24 June on our EBS platform demonstrating deep and reliable liquidity throughout a period of extreme volatility.
“Prior to the UK referendum, we were looking towards a long and slow journey on the road to more normal market conditions following the decision by the Fed to raise interest rates back in December. This journey looks more uncertain now although the subsequent decline in sterling in the FX markets does provide us with a significant windfall benefit.”
Despite the EU referendum’s boost to business, ICAP says: “Market conditions have been mixed as the malaise in global financial markets, low-interest rates and bank deleveraging persists.”
ICAP says revenue in the quarter rose by 2% on a constant currency basis or by 7% if you do not factor in currency moves since last quarter.
ICAP is in the process of selling its voice trading and information business to another City firm, Tullett Prebon. ICAP says in today’s update that it no longer plans to hold a 19.9% stake in Tullett Prebon after the merger of the two businesses takes place and will instead hand out those shares directly to its shareholders.
ICAP is trying to transform itself from a brokerage firm, which buys and sells swaps and derivatives for clients, into a pure fintech play. In May it announced it is changing its name to NEX Group and “intends to lead the market in technology innovation in global financial markets.”
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