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UPDATE 1-Tullett Prebon says trading still challenging
July 30, 2013 / 8:21 AM / 4 years ago

UPDATE 1-Tullett Prebon says trading still challenging

* First-half revenue fall 3 pct

* Pretax profit 62.8 mln stg vs 66.4 mln stg in 2012

* Trading environment remains challenging

By Tommy Wilkes

LONDON, July 30 (Reuters) - Tullett Prebon Plc reported a 3 percent drop in first-half revenue on Tuesday, as challenging market conditions and subdued trading weighed on the inter-dealer broker’s business.

The London-based brokerage said revenue reached 439.8 million pounds in the six months through June, down from 455.1 million a year earlier. The fall came despite a late surge in trading volumes in May and June, triggered by a rise in benchmark bond yields.

Terry Smith, Tullett’s chief executive, told Reuters it was “still too early to tell” whether the uptick in trading would translate into a more sustainable recovery.

Like rivals ICAP Plc and BGC Partners Inc, Tullett’s business centres on matching buyers and sellers of financial instruments including bonds, currencies and futures.

A big downturn in client trading activity since the financial crisis has hit brokers, forcing many to cut costs and let staff go.

“A significant recovery is not likely to materially manifest itself until there is the prospect of an increase in US interest rates,” analysts at brokerage Numis said in a note.

“In the short term, however, it is difficult to see any good news for Tullett. We believe the banks will continue to reduce trading activities and restrict the growth of their balance sheets,” Numis said.

Shares in Tullett were down slightly at 343.2 pence by 0750 GMT.

Tullett also said that regulatory costs continued to rise and that the final design and impact of new rules to govern over-the-counter products remained unclear.

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