Special Feature
Technically, the shares of ICAP served up a painful bear trap below the floor of a late 2011 price channel on the daily chart at 290p — by 18p — before bouncing back as if nothing had happened. While there has already been a significant retracement from the worst levels of year, the message currently is that while there is no end of day close back below the present position of the 50 day moving average at 305p, the upside here should be towards the former June 2012 peak zone at 380p on a 6-8 week timeframe.
CHART - ICAP
Recent Significant News 26th September 2012 – ICAP stated that revenue in the six months ended September 30th is expected to be around 14% lower than the previous year. Activity in the global capital markets remained subdued due to the Eurozone crisis and difficulties faced by the global economy. 14th November 2012 – Headline profit before tax in the six months to the end of September fell 26% to £137m from £186m the year before, while statutory profit before tax halved to £50m from £101m. Revenue fell 14% to £746m from £867m from the equivalent period in 2011.
Chief Executive Officer Michael Spencer described the previous half year as one of the most difficult periods in his 36 year career in the wholesale financial markets. This was on the basis that trading volumes this year had fallen significantly across nearly all asset classes and geographies — even OTC trading — with the blame being pointed at global economic weakness, the Eurozone crisis, quantitative easing and low interest rates. 14th January 2012 – ICAP is a ‘recovery to buy into’ according to Prime Markets, who said that the interdealer broker’s shares are responding to the strong Christmas and New Year rally. It added that the recent 12% stake sale of the Traiana trading platforms business had also helped to boost the group’s already robust cash position.
22 | www.financial-spread-betting.com | February 2013