ICAP to review its cash equity businesses

ICAP said it was reviewing its agency broking business in equities and its chief executive would quit a senior job in politics in the wake of a profit warning that sent its shares into a nosedive this month.

"The group is conducting a broad-ranging strategic review of some of its cash equities businesses," the world's largest interdealer broker said yesterday.

Founder and chief executive Michael Spencer, meanwhile, plans to quit as Conservative Party treasurer in the autumn, a spokesman for the company said.

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One analyst said ICAP stock had historically traded at high multiples due to Mr Spencer's success in identifying new businesses and converting them into profits.

But a source close to the company said Mr Spencer's plan to resign his political job was unrelated to ICAP's fortunes and that he had made this intention known in 2009, months before the firm's recent spate of problems.

ICAP, which acts as a middleman in securities trades between big investment banks, issued a profit warning on February 5 after some new businesses, including cash equities, took longer than expected to make money.

"In our cash equity businesses, which are now virtually fully staffed, lower market volumes (38 per cent down in Europe and 24 per cent down in the Americas for the year to December 2009 compared with 2008) have held back growth," it said in a statement at the time.