LSE and ICAP held back by sluggish summer of trading
LONDON (Reuters) - The London Stock Exchange (LSE.L) and broker ICAP (IAP.L) reported big falls in trading over the summer, hit by an uncertain economic outlook and leaving them reliant on other sources of revenue to sustain profits.
The LSE, which trades stocks and futures, said on Wednesday average daily volumes on its flagship British stock market fell a fifth in the five months ended August, while Italian shares were off 16 percent.
ICAP, which trades mostly currency, bonds and swaps, said trading "has remained more muted than anticipated" since it reported in July, but that full-year profit "will be within the current analyst range of 307 million to 346 million pounds."
The British broker said it was making "good progress" with its cost-cutting program and was on target to deliver at least 50 million pounds per annum of savings by the end of the current financial year.
All markets have been slow this year as investors have quit trading amid concerns over the economic outlook but August this year looked particularly weak versus last year because markets were roiled last summer by the euro zone crisis.
Analysts have said LSE profits for the six months to the end of this month would be 120.8 million pounds ($195.6 million), 5 percent down on the same period last year, while ICAP would clear 122.9 million pounds, 4 percent down.
Analysts see investments by both companies in fast growing areas such as clearing and other post-trade services protecting profits at the firms when they report their first half financial performance in November.
(Editing by Mark Potter)
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