Icap thrives on market volatility

Icap, the largest inter-dealer broker of over-the-counter derivatives, has reported a 39% rise in profits to £123.7 million for the year ended March 31. The firm’s turnover rose 26% to £664.3 million as the firm thrived on market volatility, especially in medium-term interest rate markets. Deteriorating credit also boosted Icap’s credit derivatives dealing business.

UK-based Icap estimated that the global inter-dealer market for OTC derivatives, fixed income, money market products, foreign exchange, energy, credit and equity derivatives grew by around 10% last year, generating revenues of $4.3 billion. Icap claims a 23% share of that business.

Icap chairman Michael Spencer highlighted the integration of BrokerTec, the electronic bond-trading platform, as a priority for 2003. Icap’s acquisition of BrokerTec was completed on May 7. Icap’s combined daily transaction volumes exceed $500 billion, of which 40% is electronically traded, said Spencer.

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Stemming the tide of rising FX settlement risk

As the trading of emerging markets currencies gathers pace and broader uncertainty sweeps across financial markets, CLS is exploring alternative services designed to mitigate settlement risk for the FX market

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