A much calmer financial market may be the most idyllic deal for global leaders in trade but at the same time provides a stubborn annoyance for the British spread-betting firm IG group (IGG.L), which experienced a fall in profit in the past few weeks while fewer and fewer clients are able to find lesser opportunities to earn from investments.
IG is considered to be the global leader in spread-betting in terms of revenue experienced a big break in their business during volatility period that left many markets at their limit of the Euro zone debt crisis which on Tuesday accounted a 14 per cent increase in adjusted profit for the year that ended in earlier in May. Moreover, activity in the company has slowed down in the past few weeks when the Greek elections and the Euro zone’s bail-out of Spain’s banks have raised optimism that the single currency bloc will make it through its tribulations.
Spread betting is an innovative way of allowing small time business investors to make predicative speculations on how well the market is performing which in turn enables investors to bet on a given price at a certain point in the near future. A research done by Berenberg Bank which was officially published just this Monday stated that the key component trading metrics went down 6 per cent in June and further down to 8 per cent year-to-date to be exact. Furthermore, analyst Richard Perrott mentioned that given the comparable variables ahead in the remaining third quarter (August in particular, which was surprisingly strong in terms of trading performance as a direct result of the ongoing Eurozone crisis) in 2012 will bring about tough decisions and calls for trading activity since trades will highly likely to drop 10 per cent.
IG’s remarks on Tuesday this week stated that the company’s tough trading activities last year (August and September in particular) would result to a weaker revenue figure in comparison to the current financial year. The company is striving to attain modest economical growth for the entire year which was remarkably consistent with the company’s 2 per cent year-on-year growth forecast according to Martin Price, a research analyst at the bank of America Merrill Lynch.
IG’s European business saw its profit grow up to 26 per cent as much as 72.2 million pounds with Australia closely following at 22 per cent increase with a total of 58 million pounds while the United Kingdom being IG’s biggest market revenue was up to 15 per cent to 191.8 million pounds.