ICAP Plc, the world's biggest inter-dealer broker, said on Thursday increased financial market volatility would help its full-year pretax profit to top analysts' expectations, boosting its shares 6 percent.
"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 in a trading update covering the period since the beginning of October. "ICAP has continued to perform very well and we remain very positive about the outlook for the business." Shares in ICAP rose 6 percent to 619 pence by 0901 GMT, having risen as high as 623-1/2p earlier.
ICAP said its profit before tax and exceptional items for the year to the end of March would be above analysts' expectations, which are around 302 million pounds, according to a survey of nine analysts by Reuters Estimates. "It's a positive statement. They've seen growth both on electronic and voice broking operation and there's no sign of volatility slowing down at the moment," Numis analyst Roger Tejwani said, raising his current year pretax profit forecast by 3.2 percent to 310 million.
Spot foreign exchange daily volume on its electronic currency platform EBS jumped 42 percent to $200 billion in the last quarter of 2007, buoyed by increased currency volatility and algorithmic trading activity, it said.