Boom at Fidessa prompts hope of equity revival


Hopes that this year could be a major turning point for share markets were boosted today after  the boss of the biggest supplier of trading software to the City said the past few weeks had seen record trading in equities.

“Some investors are saying that this could be the year of the equity,” said Chris Aspinwall chief executive of Fidessa. “In recent weeks there have been large inflows of cash into equities particularly through mid and lower-tier brokers as institutions and private clients have more appetite for risk.”

He added: “Though it is clearly too early to know whether this represents a turning point, it reinforces our view that a floor will eventually be reached in the decline of equity markets which will allow our core end-markets gradually to return to a more stable state.”

Brokers and their suppliers have been suffering from a fall in equity trading which has now lasted for two years. If Fidessa’s experience is anything to go by, small and mid-cap broking firms could well be experiencing their best quarter for some time.

Aspinwall said: “For the financial markets, conditions last year were more difficult than expected with the global value of equity trading falling by around 20% on top of the already depressed levels seen in 2011.

“This has meant further stress for our customers resulting in continued attrition and price pressure, therefore making it challenging for us to deliver the growth levels we have been used to.”

Revenues for last year were flat at £278 million and pre-tax profits slipped 1% to £42 million.

The annual dividend is tweaked up to 37p a share and once again a special 42p-per-share dividend is being paid. The shares jumped more than 5%, or 83.5p, to 1610.5p.

Aspinwall said that the group is still expecting this year’s performance to be similar to that just gone but he hopes that moves into growth areas such as derivatives and new markets in Asia and Latin America to return to the kind of growth it was seeing a few years ago.