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ICAP (LON:IAP) report: Improving e-broking volume data

Contributed by Daniel Stewart & Company

By Daniel Stewart & Co

- Total ave. daily e-broking volumes in February showed a 22% y-on-y recovery to $695.4bn. Whilst positive, we would stress that these remain relatively easy comparatives. Average daily volumes were +4% m-on-m.

- All products showed strong gains versus their y-on-y comparatives, with US Treasuries +37%, US Repos +27% & EU Repos +25%. It was particularly encouraging to note that spot fx volumes showed their first yon- y gain since Oct '08, +7%.

- We are in the process of finalising new forecasts on ICAP and these will be issued shortly. At the time of the profit warning on 5 Feb, the Company guided that FY'10 PBT would be within the range ?295m-?315m.

- ICAP faces near term uncertainty, in the form of regulatory reforms – OTC and Volcker – and an ostensible softening in voice rates. However, this is set against the inherent, long term strength of its franchise and its predominance, amongst the inter-dealer brokers, in e-broking and post trade services.