IG Group puts its money on Pakistan for biggest overseas venture in 26 years

IG Group, the spread betting firm headed by the millionaire Conservative Party donor Stuart Wheeler, is poised to set up a joint venture to expand into Pakistan.

The deal, with a local stockbroker, will be the first significant move overseas in IG's 26-year history.

Betting is illegal in Pakistan, so the IG venture will offer only trading in contracts for difference, derivative products linked to the rise and fall of share prices.

The unnamed Pakistani broker will promote IG to its clients and take a share of any profits. Although it is believed that the joint venture will be around 56 per cent owned by IG, the structure of the deal means that the UK firm will take a larger proportion of the proceeds.

The joint venture should be signed in the next two months.

Mr Wheeler promised a big push abroad when reporting IG's annual results last week. He told shareholders: "Foreign business holds out exciting prospects for us and we are spending considerable effort and money in looking for it."

He said the group was pursuing opportunities in Europe, Australia and Asia but he warned that revenues are unlikely to be significant until after the end of this financial year, next May.

Contracts for difference are the fastest growing part of IG's business. Derivatives and foreign exchange trading rose to 15 per cent of IG's turnover last year, from 10 per cent in the previous 12 months.

IG, which trades as IG Index, reported full-year results which showed profits had increased by 53 per cent to £15.4m on turnover up 41 per cent to £3.4m.