TP ICAP, the world’s biggest inter-deal broker, published its annual financials for 2021, reporting a more than 81 percent drop in its profits for the 12 months. It generated £24 million as pre-tax profits last year compared to 2020’s £129 million.
The basic earnings per share of the company also plunged to 0.7 pence from 15.4 pence in the prior year.
“Our performance naturally reflects the unusually quiet secondary markets that we experienced in 2021, particularly in the first half of the year. However, as market conditions started to improve in the second half, TP ICAP recovered most of the ground and grew overall market share,” said Nicolas Breteau, TP ICAP’s CEO.
Indeed, the revenue of the company showed resilience and came in at £1.86 billion, slightly higher than the previous year’s £1.79 billion. But Liquidnet turned out to be a successful bet for the company as it brought in £159 million in revenue post-acquisition.
Without adding Liquidnet’s numbers, TP ICAP’s annual revenue lowered by 1 percent in 2021, which is in line with the guidance provided by the company earlier.
Now, the group is also focused on diversifying its revenue stream, bringing 42 percent of its total revenue from non-global broking businesses. Meanwhile, the global broking business of the group declined by 2 percent.
Data and analytics business within Parameta Solutions, which generates a high margin, grew by 10 percent last year.
Cautious on the Outlook
TP ICAP already saw a 16 percent revenue growth until March 11, when compared to the same period of the previous year. The figure is also 4 percent higher without business from Liquidnet.
But the company is cautious with the market conditions and did not put down any absolute number or range, saying “predicting future market activity is difficult.”
“Market volatility
Volatility
In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders can be successful in both low and high volatile environments, but the strategies employed are often different depending upon volatility. Why Too Much Volatility is a ProblemIn the FX space, lower volatile currency pairs offer less surprises, and are suited to position traders.High volatile pairs are attractive for many day traders, due to quick and strong movements, offering the potential for higher profits, although the risk associated with such volatile pairs are many. Overall, a look at previous volatility tells us how likely price will fluctuate in the future, although it has nothing to do with direction.All a trader can gather from this is the understanding that the probability of a volatile pair to increase or decrease an X amount in a Y period of time, is more than the probability of a non-volatile pair. Another important factor is, volatility can and does change over time, and there can be periods when even highly volatile instruments show signs of flatness, with price not really making headway in either direction. Too little volatility is just as problematic for markets as too much, we uncertainty in excess can create panic and problems of liquidity. This was evident during Black Swan events or other crisis that have historically roiled currency and equity markets.
In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders can be successful in both low and high volatile environments, but the strategies employed are often different depending upon volatility. Why Too Much Volatility is a ProblemIn the FX space, lower volatile currency pairs offer less surprises, and are suited to position traders.High volatile pairs are attractive for many day traders, due to quick and strong movements, offering the potential for higher profits, although the risk associated with such volatile pairs are many. Overall, a look at previous volatility tells us how likely price will fluctuate in the future, although it has nothing to do with direction.All a trader can gather from this is the understanding that the probability of a volatile pair to increase or decrease an X amount in a Y period of time, is more than the probability of a non-volatile pair. Another important factor is, volatility can and does change over time, and there can be periods when even highly volatile instruments show signs of flatness, with price not really making headway in either direction. Too little volatility is just as problematic for markets as too much, we uncertainty in excess can create panic and problems of liquidity. This was evident during Black Swan events or other crisis that have historically roiled currency and equity markets.
Read this Term has continued at more elevated levels in 2022, with the return of inflation and geopolitical uncertainty driving higher volumes across many of our markets,” Breteau added.
“While it is too early to judge whether this activity will be sustained, we believe the results of our many actions will show through in improved performance across the group in 2022 and beyond.”
TP ICAP, the world’s biggest inter-deal broker, published its annual financials for 2021, reporting a more than 81 percent drop in its profits for the 12 months. It generated £24 million as pre-tax profits last year compared to 2020’s £129 million.
The basic earnings per share of the company also plunged to 0.7 pence from 15.4 pence in the prior year.
“Our performance naturally reflects the unusually quiet secondary markets that we experienced in 2021, particularly in the first half of the year. However, as market conditions started to improve in the second half, TP ICAP recovered most of the ground and grew overall market share,” said Nicolas Breteau, TP ICAP’s CEO.
Indeed, the revenue of the company showed resilience and came in at £1.86 billion, slightly higher than the previous year’s £1.79 billion. But Liquidnet turned out to be a successful bet for the company as it brought in £159 million in revenue post-acquisition.
Without adding Liquidnet’s numbers, TP ICAP’s annual revenue lowered by 1 percent in 2021, which is in line with the guidance provided by the company earlier.
Now, the group is also focused on diversifying its revenue stream, bringing 42 percent of its total revenue from non-global broking businesses. Meanwhile, the global broking business of the group declined by 2 percent.
Data and analytics business within Parameta Solutions, which generates a high margin, grew by 10 percent last year.
Cautious on the Outlook
TP ICAP already saw a 16 percent revenue growth until March 11, when compared to the same period of the previous year. The figure is also 4 percent higher without business from Liquidnet.
But the company is cautious with the market conditions and did not put down any absolute number or range, saying “predicting future market activity is difficult.”
“Market volatility
Volatility
In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders can be successful in both low and high volatile environments, but the strategies employed are often different depending upon volatility. Why Too Much Volatility is a ProblemIn the FX space, lower volatile currency pairs offer less surprises, and are suited to position traders.High volatile pairs are attractive for many day traders, due to quick and strong movements, offering the potential for higher profits, although the risk associated with such volatile pairs are many. Overall, a look at previous volatility tells us how likely price will fluctuate in the future, although it has nothing to do with direction.All a trader can gather from this is the understanding that the probability of a volatile pair to increase or decrease an X amount in a Y period of time, is more than the probability of a non-volatile pair. Another important factor is, volatility can and does change over time, and there can be periods when even highly volatile instruments show signs of flatness, with price not really making headway in either direction. Too little volatility is just as problematic for markets as too much, we uncertainty in excess can create panic and problems of liquidity. This was evident during Black Swan events or other crisis that have historically roiled currency and equity markets.
In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders can be successful in both low and high volatile environments, but the strategies employed are often different depending upon volatility. Why Too Much Volatility is a ProblemIn the FX space, lower volatile currency pairs offer less surprises, and are suited to position traders.High volatile pairs are attractive for many day traders, due to quick and strong movements, offering the potential for higher profits, although the risk associated with such volatile pairs are many. Overall, a look at previous volatility tells us how likely price will fluctuate in the future, although it has nothing to do with direction.All a trader can gather from this is the understanding that the probability of a volatile pair to increase or decrease an X amount in a Y period of time, is more than the probability of a non-volatile pair. Another important factor is, volatility can and does change over time, and there can be periods when even highly volatile instruments show signs of flatness, with price not really making headway in either direction. Too little volatility is just as problematic for markets as too much, we uncertainty in excess can create panic and problems of liquidity. This was evident during Black Swan events or other crisis that have historically roiled currency and equity markets.
Read this Term has continued at more elevated levels in 2022, with the return of inflation and geopolitical uncertainty driving higher volumes across many of our markets,” Breteau added.
“While it is too early to judge whether this activity will be sustained, we believe the results of our many actions will show through in improved performance across the group in 2022 and beyond.”
Source: https://www.financemagnates.com/institutional-forex/tp-icap-sees-81-drop-in-2021-profits-revenue-rises-marginally/