IG Group considers entering leveraged securities market in Hong Kong

Maria Nikolova

A local business development team will be established to pursue partnerships and assess the opportunity to enter the leveraged securities market in Hong Kong

Online trading major IG Group Holdings plc (LON:IGG) is setting out its key strategic choices, including plans for expansion in Hong Kong.

The Group has categorised its existing businesses into two groups: core markets and significant opportunities.

In the core markets of the UK, EU (CFDs), Australia, Singapore and non-EU EMEA (Switzerland, Dubai and South Africa), the Group will deploy the levers of segmented target markets, and more local market focus. The revenue from these core markets in FY19 is expected to be around £415 million.

In the EU, IG aims to expand into new products including Options and Turbo 24s through Spectrum, the Group’s MTF.

In the United States, IG aims to leverage the combination of Nadex, IG’s retail FX business and Daily FX.

In Japan, IG will focus on product localisation and marketing, whereas in other Asian markets it will be developing partnerships to access these markets.

The institutional segment will aim for focused proposition for an underserved client segment.

Additionally, the Group has identified a potential opportunity to participate in the leveraged securities market for retail clients in Hong Kong. A local business development team will now be established to pursue partnerships and assess the opportunity to enter the leveraged securities market in Hong Kong.

The revenue from the significant opportunities markets in FY19 is expected to be around £60 million.

The Group is targeting revenue growth at around 3-5% per annum over the medium term in the core markets and an increase in revenue of £100 million, to around £160 million in FY22 in the so-called “significant opportunities”.

Assuming these targets are achieved, the Group’s revenue in FY22 will be around 30% higher than in FY19.

Delivery of this targeted revenue growth will require additional investment. Operating expenses, excluding variable remuneration, are expected to be around £257 million in FY19, and are expected to increase by around £30 million in FY20. This is primarily due to additional investment in prospect acquisition to continue to promote the IG brand, to grow the size and quality of the client base, and to establish the new businesses in the EU and the USA. In subsequent years the Group expects its operating expenses, excluding variable remuneration, to increase at a lower rate than revenue.

Read this next

Institutional FX

Invast Global ramps up its offering with 10 soft commodity CFDs

Sydney-based prime-of-prime provider Invast Global has expanded its offering with the addition of ten soft commodity CFDs, which increases their index and commodity CFD offering to 35 instruments.

Retail FX

FF Simple and Smart Trades says Goodbye to CySEC authorization

The Cyprus Securities and Exchange Commission (CySEC) confirmed that it has wholly withdrawn the Cyprus Investment Firm (CIF) licenses of FF Simple and Smart Trades Investment Services Ltd.

Crypto Insider

Shining the Light in Crypto’s Dark Places

Something changed in regulators’ minds after the November crash of the FTX crypto exchange.

Executive Moves

Financial Commission Adds Sam Low to Dispute Resolution Committee

The Financial Commission (FinaCom PLC), a dispute resolution service that caters to the financial services industry, has appointed Sam Low as the newest member of its Dispute Resolution Committee (DRC).

Digital Assets, Uncategorized

De-facto owner of Bithumb exchange arrested in South Korea

South Korean prosecutors have arrested Kang Jong-Hyun, the anonymous chairman and owner of the country’s largest cryptocurrency exchange, Bithumb, on charges of embezzlement and stock manipulation.

Retail FX

Interactive Brokers volumes snap three-month losing streak

Electronic brokerage firm Interactive Brokers LLC (NASDAQ:IBKR) said its trading volumes rose in January, an indication that investor confidence in the financial markets is rebounding after having been fairly mixed over the past few months.

Digital Assets

VVF invests $5 million in Everscale, a potential Layer 2 solution for Venom blockchain

“For us, this is a strategic investment aimed at the technological development of projects and teams around technologies that we focus on and actively develop. In particular, we are talking about the Venom blockchain project and its ecosystem, which is planned to be launched soon and for which Everscale is a potential Layer 2 solution.”

Institutional FX

FXSpotStream volume ends string of declines on January rebound

Trading volumes on institutional FX platforms surged in January as traders increased their bets on central bankers’ policy with evidence mounting that inflation and economic growth are both losing momentum.

Industry News

DeFi firm Aurox launches SEC-compliant crowdfunding campaign on tZERO

“This is a great opportunity for us to raise capital from our community and the broader public on a leading fully regulated platform. We are confident that the tZERO Markets platform will provide us with the exposure and reach we need to attract a diverse investors to support our business growth.”