IG Group spooks markets reporting slow start to 2013

IG Group, the largest UK-based online financial trading firm, announced detailed results for its 2012 fiscal year (ended May 31), which did not please City traders. Despite good results for the 2012 year (which IG Group released already in mid-June), investors sent IG Group’s shares down 2.4% Tuesday following management’s admission of a “subdued” start to the 2013 fiscal year in June and early July. By way of contrast, we have seen healthy June trading levels across the board from a variety of Forex ECNs and leading global retail firm FXCM.

Other interesting tidbits from IG Group’s results announcement and investor presentation include:

Planning further international expansion. Despite strong results in some of its international businesses including Australia and South Africa, and more stability shown in its Japan business, IG Group still did more than half (52%) of its revenues in the UK in 2012, about the same (53%) as in 2011. Without being specific, IG Group said that international expansion will be a top priority in fiscal 2013.

Singapore to reduce allowed leverage. IG Group reported that Singsapore’s financial regulator, the MAS (or Monetary Authority of Singapore) has indicated an intention to reduce leverage on Forex from 50x to 20x. The proposal has not yet been finalized, and might only apply to transactions opened without a stop in place.

Mobile growth. More than 40% of IG Group clients accessed their accounts via a mobile device in 2012, while 20% of revenues and client transactions were generated from trades on mobile devices. Of all those mobile trades, about one-fifth came via IG Group’s iPad app. Those numbers should continue to rise.

For more on the global Forex industry see the LeapRate-Dow Jones Forex Industry Report.

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