Good morning

Let's see what the RNS has in store for us today.

Timings - writing until around 2.30pm today.

This list is final:




IG Group (LON:IGG)

1st Quarter Results

Not a small-cap (market cap is >£2 billion), but as the share price is up 8% and it's one of my larger holdings, let's briefly discuss.

I have taken the view with this one that that regulations can't get that much more strict. Indices are at 20:1 and FX is at 30:1, for example.

Other reasons for my bullishness: 

  1. Compliance costs from all the new rules and fewer trading choices for customers could make life even easier for the incumbents, by creating an environment where there is less competition and fewer new entrants
  2. Professional clients are unaffected by the rules, and the spread bet companies can focus more resources on them, instead.

Let's see what this Q1 update says.

The business has performed well in the first quarter benefitting from growth in the number of active clients, and from increased client trading activity as a result of the favourable market conditions in August.

I can attest to that myself as I was taking out positions in FTSE options during August, because of the excessive volatility/fear in the markets.

By the way, with the FTSE back around 7350, doesn't it feel like nerves have calmed already, since that August fear? GPB has strengthened, too. Perhaps these are early signs of the positive adjustments which will happen after Brexit is resolved - that's just my wishful thinking!

IG's Q1 revenue was flat in June/July/August, compared to Q1 the prior year.

The regulations took effect in August 2018, so two months of Q1 last year were still under the old regime. This is very positive to me, as it suggests there was an underlying improvement (doubtless helped by all the volatility this year).

By category, the "OTC leveraged" segment (spread betting/CFDs) was flat. 

Nadex, the North American business, declined by 2%.

Meanwhile, stock trading and investments were up 9% - that's great news. This is a much lower-margin business compared to spread betting and CFDs, but I…

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