Tough conditions impact on Tullett

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Interdealer broker Tullett Prebon reported a 4 per cent drop in revenue for the four months to end-October as market conditions remained tough, but said it had seen higher levels of activity in financial markets in recent weeks.

Revenues at companies like Tullett, whose brokers match buyers and sellers of currencies, bonds and swaps, have slumped in recent years due to regulations forcing their investment banking clients to reduce risky trading activities.

They have also been hit by efforts to push more derivatives trading on to electronic platforms to make the market more transparent, while low interest rates have dampened the market volatility which is a key driver of demand for their services.

London-based Tullett said in a trading update yesterday revenue between July and October reached £233m, against £252m a year earlier. Revenue for the year to October was down 11 percent at £594m.

Recent weeks have seen an upswing in market volatility, however, due to a number of factors including prospects for a potential rise in US interest rates. Tullett said this had boosted activity, particularly in the Americas and Asia Pacific.

Activity in Europe and the Middle East however improved more modestly, it added, due to the further flattening and lowering of ‘yield’ curves, a bond market measure.