Market Report: Shares in IG Group cascaded as spread betting firm’s revenue falls short


Days following the launching of a stock-broking service, shares in a spread betting company, IG cascaded as a particular calm summer in the financial markets hit its first-quarter revenues fell short of analysts’ expectations.

As compared to an unusually stern period the summer before, IG’s revenue diminished 9 % year-on-year to £85.6 million as both volumes and volatility plummeted close to remarkable lows.

Broker Liberum Capital mentioned that the revenue figure overlooked its sub-consensus predictions by 7 % and predicted analysts would need to downgrade revenue estimates by approximately 5 %.

IG is presently developing an international share dealing offering, in which it will provide for its clients the exercise of their equity assets as a guarantee against spread betting and other short-term leveraged trading. Mid-cap IG experienced its shares shedding 5.5p to 598p.

There was a much lighter news from two small cap City brokers; Shore Capital buoyant and Cenkos Securities both of which remained upbeat following trading updates.

Institutional experts and specialists quoted an expanding list of clients and the increasing fundraising efforts as among the primary factors behind the 226 % leap of the first half revenues to £65.2 million, which assisted the pre-tax profit leap to £23.5 million from £3.1 million a year prior.

The same was regarded as its interim dividend and cited that it is currently evaluating clever ways of making returns to shareholders, specifically through share-buybacks.

The positive news that came out of the market inadequately failed to lend support which drifted back from early gains which were indicative of the uncertainties regarding the outlook for U.S. interest rates along with the looming concerns on the final day of campaigning for the uncertainty of the vote for Scotland’s independence. With this in mind, the FTSE 100 index closed 11.34 points lower at 6780.9.

U.S. stocks ended last week with the Dow at remarkable record high, after the U.S. Federal Reserve restored its pledge to keep interest rates to a possible close to zero for a considerable time. The Dow Jones industrial average went up 24.88 points to 17,156.85 totaling 0.15 % respectively.

The Bank of England’s decision in holding its interest rates in a stable manner was realised this month and with the publication of the MPC meeting minutes which showed no additional dissenting influence calling for a rate hike , and data showing standard wages remaining frail, prospects for an early increase in Britain’s interest rates remained low.

Strength in house-builders proved as the primary support for the blue chip index on rate relief, with Barratt Developments topping the FTSE 100 performer, up 11.7 to 392p, whereas Persimmon was able to add 20p to 1352p.

ARM Holdings were up higher 20.5p to 940.5p which was reverse during its last session following mid cap peer Imagination Technologies prompted satisfactory levels of activity in its recent session.

Catalytic converter was on high demand, which was up 31p to 3131p after Berenberg made new ratings to purchase hold and hike target price for the stock 36.5p from 29p.

Among all the blue chip fallers, satellite broadcaster BSkyB was among which received 0.5p at 875.5p after the failed materialisation of the board of Frankfurt-listed Sky Deutschland said it would no longer be recommending the Britain based firm’s bid.

Dignity was able to gain 2 % up to 23p to 1455p after Britain’s largest funerals group recommended a cash return of £54 million to its shareholders as a portion of a debt in streamlining the proposal.

The FTSE 250 index plummeted 16.33 points to 15576.72 with Interdealer broker ICAP stood out which ended up with 17.3p at 376.4p after UBS up its ratings to neutral from sell.

Among the small caps, there were stronger demands for logistics support group Pennant International, with shares going up as much as 89p after its Canadian subsidiary was able to land services consulting contract, initially amounting to £4.4million, from Canada’s Public Works and Government Services.