IG Index awarded stockbroking licence

By Stephen Foley
Thursday 06 December 2001 01:00

IG Index, the spread betting firm, has been awarded a stockbroking licence and is planning to unveil a share trading service at its interim results next month.

The company, chaired by the millionaire Conservative party donor Stuart Wheeler, has received approval from the Financial Services Authority. It will start allowing betting clients to use shares as collateral before Christmas.

It will offer a full stockbroking service early in the new year, to complement other financial trading and betting services. The company already deals in derivatives, and many of its staff in that division have backgrounds in private client stockbroking.

IG Index was formed in 1975 to take bets on the price of gold and now takes bets on movements in share prices,indices, commodities and currencies.

The news of its move into traditional stockbroking comes as IG Group, the parent company, revealed that profits for the first half of the financial year would be below City expectations. A spokesman said "the rub of the green" had gone against the company in October and November, but that turnover continued to grow strongly.

Mr Wheeler said that volume and profitability in the spread betting business could fluctuate considerably from month to month, depending on customers' betting success.

Pre-tax profits for the half year to 30 November will be in the region of £8.3m, up from £7.3m the year before but shy of analysts' forecasts of about £9m. Interims are due on 14 January.

IG Group shares fell 59p to 560p.

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