IG Group forecasts 6% Y/Y drop in revenues in H1 FY19

Maria Nikolova

The number of new OTC leveraged clients who traded for the first time with IG in the 6-month period was 8,200 in the UK and EU, down from 11,666 a year earlier.

Electronic trading major IG Group Holdings plc (LON:IGG) has earlier today published an update following the end of the first half of the financial year ending May 31, 2019 (FY19).

The Group expects revenue in the first half to be around 6% lower than in the same period in FY18, which was a record one for IG.

The broker notes that the ESMA product intervention measures came into effect during the period. The prohibition on offering binary options to retail clients became effective from July 2, 2018 and the restrictions relating to the provision of CFDs to retail clients were effective from August 1, 2018.

Group revenue in the four month period since all the measures came into effect is expected to be around 10% lower than in the same period a year ago. Revenue in that four month period in the ESMA region (UK and EU) is expected to be around 20% lower. However, revenue from the Group’s business in APAC and other non-ESMA region countries expected to be around 9% higher.

The number of clients in the UK and EU who have elected to be classified as professional kept rising during the period. Around 70% of UK and EU revenue in the four months since all the measures were introduced has been generated by professional clients.

The number of new OTC leveraged clients who traded for the first time with IG in the period was 14,600 compared with 18,027 in the same period of the prior year. This includes 8,200 in the ESMA region (H1 FY18: 11,666) and 6,400 in the APAC and non-ESMA regions (H1 FY18: 6,361).

IG Group notes the recent progress with regard to its strategic initiatives. IG Europe, the Group’s client facing subsidiary in Germany, has received its licence from BaFin. This offers certainty that IG will be able to offer its regulated financial products in all EU member states following the UK’s exit from the EU.

The Group’s US subsidiary has been approved as a member of the National Futures Association (NFA) and is now registered to operate as a Retail Foreign Exchange Dealer (RFED). Let’s also note that IG’s Daily FX got a raft of US regulatory approvals last week.

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