IG Group registers drop in revenues in Q3 FY19

Maria Nikolova

The company registered a 12% quarter-on-quarter drop in net trading revenues attributing the decline to lower volatility.

Online trading major IG Group Holdings plc (LON:IGG) has earlier today posted a trading update for the three-month period to end-February 2019, with the numbers revealing a drop in revenues amid lower volatility and the effects of the ESMA measures.

Q3 FY19 is the second quarter when the ESMA product intervention measures that impose restrictions relating to the offering of CFDs and which prohibit the offer of binary options to Retail clients in the UK and EU, were in effect throughout, the company explains.

Net trading revenue was £108 million in the third quarter of FY19, 12% lower than in the second quarter of FY19. No annual comparison was provided. The lower revenue in the third quarter compared with the second quarter was blamed on lower revenue per client which reflects the reducing levels of volatility in financial markets throughout the quarter, culminating in persistently low levels of volatility and market activity in February.

The total number of OTC leveraged active clients in the third quarter increased by 1% to 84,200.

On the brighter side, IG says it sees continued demand for its products and services, with 7,742 new OTC leverage clients placing a first trade in the third quarter compared with 7,553 in the second quarter. During the third quarter, a further 1,425 ESMA region Retail clients applied to be classified as Professional, with 14% of these applications accepted. The proportion of ESMA region revenue generated from clients categorised as Professional was 65% in Q3 FY19 compared with 69% in Q2 FY19.

Year to date net trading revenue amounted to £359 million, 15% lower than in the same period in the prior year, reflecting the impact of the ESMA measures.

In terms of outlook, IG says the level of revenue in the last quarter of FY19 is difficult to predict accurately. As previously communicated, the company continues to expect that its revenue in FY19 will be lower than in FY18. The Company’s cost guidance for FY19 remains unchanged with total operating costs expected to be at a similar level to the £290 million operating costs in FY18.

The Board reiterates that the Company expects to maintain the 43.2p per share annual dividend until the Group’s earnings allow the Company to resume progressive dividends.

Read this next

Retail FX

Weekly Roundup: John Oliver rips into MetaTrader, Binance to pay $10 billion

Welcome to this week’s roundup, where we delve into the latest developments in the Forex, Fintech, and cryptocurrency markets. Stay ahead of the curve with our comprehensive overview of the week’s most impactful events and trends across these dynamic sectors.

Retail FX

Lark Funding reopens to US traders, MyFundedFX picks cTrader

Canada-based prop trading firm Lark Funding announced it will once again welcome clients from the United States.

Institutional FX

Cboe FX volume falls to lowest level since summer

Cboe’s institutional spot FX platform, known as Cboe Spot, today announced its trading volume for the month ending February 2024, which took a step back after a strong rebound in December.

Retail FX

ThinkMarkets secures lucrative DFSA license in Dubai

Melbourne-based broker ThinkMarkets has secured a license from the Dubai Financial Services Authority (DFSA) after it has already incorporated its new subsidiary in the Dubai International Financial Center (DIFC).

Digital Assets

New Horizen Lays Out Its Vision Of A Modular, Proof Verification Layer For Web3 Networks

Horizen is forging a new path for the future of blockchain with its New Horizen initiative, which is building a modular Proof Verification layer that’s dedicated to verifying cryptographic proofs for any settlement layer, beginning with Ethereum. 

Digital Assets

Karma3 Labs Raises a $4.5M Seed Round Led By Galaxy and IDEO CoLab to Build OpenRank, a Decentralized Reputation Protocol

Using OpenRank, developers and web3 companies can build consumer apps where people can discover, use, fund, read, or buy something on-chain without worrying about getting spammed or scammed.

Digital Assets

Worldcoin down as Elon Musk sues OpenAI CEO Sam Altman

Worldcoin’s (WLD) token dropped following news of a lawsuit against related company OpenAI. The lawsuit was filed by Elon Musk and accused OpenAI and CEO Sam Altman of breach of contract.

Institutional FX

Exegy’s Liquidity Lamp adds intraday data to outperform S&P 500 by 31.8%

Exegy has incorporated intraday signals into its AI-powered iceberg order detection tool, Liquidity Lamp. By adding intraday data to a baseline mean reversion strategy, Exegy’s model outperformed the baseline by 10.5% and the S&P 500 (SPY) by 31.8%, respectively in the out-of-sample testing.

Industry News

Think Elon Musk backed your crypto exchange? ASIC’s latest reveal may shock you

In an absolutely shocking turn of events that nobody could have possibly seen coming, the Australian Securities and Investments Commission (ASIC) has bravely stepped forward to reveal that, yes, those videos of Elon Musk passionately endorsing a cryptocurrency exchange are as fake as a three-dollar bill.