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IG reports ‘increasingly subdued’ markets after Brexit vote

However, the British company said revenue rose 5.1 percent to 111.4 million pounds ($145.2 million) in the quarter ended Aug. 31.

By: | Published: September 20, 2016 1:25 PM
A Union Jack flag flutters next to European Union flags ahead of a visit from Britain's PM Cameron at the EU Commission headquarters in Brussels Ahead of the EU vote, IG increased the amount of cash clients were required to hold in their accounts before making trades, a decision that helped the firm manage the “night of severe and sudden movements in financial markets” that followed the “Brexit” vote. (Reuters)

Online trading company IG Group Holdings Plc said on Tuesday financial markets had become “increasingly subdued” in the two months after Britain’s shock vote to leave the European Union, presenting clients with limited trading opportunities.

However, the British company said revenue rose 5.1 percent to 111.4 million pounds ($145.2 million) in the quarter ended Aug. 31.

Ahead of the EU vote, IG increased the amount of cash clients were required to hold in their accounts before making trades, a decision that helped the firm manage the “night of severe and sudden movements in financial markets” that followed the “Brexit” vote.

Revenue rose in all regions except for IG’s largest market – the UK – where the impact of actions taken around the referendum and resulting “dull” markets were felt the most, it said.

Revenue in the UK and Ireland fell 1.8 percent to 55.4 million pounds, while Europe saw a rise of 13 percent, IG said.

Many investors are sitting on their positions, rather than taking out new ones or altering them significantly, as they wait for further guidance on how the British economy might behave when divorce proceedings from the EU kick off in earnest.

British financial spreadbetting firm CMC Markets Plc warned this month that net operating income for the first-half ended September would be lower than a year earlier as low levels of volatility resulted in fewer trading opportunities for its clients.

IG Group, which has over 152,600 active clients according to its website, said active clients rose 18 percent in the period, while revenue per client fell 11 percent.

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