First-half Profit for Financial Tech Company, NEX Drops, Selects Amsterdam for EU HQ

First-half Profit for Financial Tech Company, NEX Drops, Selects Amsterdam for EU HQ

Brit Fin Tech company Nex Group, joined the other losers today, as its trading profit dropped to £63 million in the first half.

The Chief Executive Officer noted it as a historically low level of volatility. According to its officials, the market conditions were responsible for its dismal performance. Its challenging conditions cause a lack of volume and volatility in currencies, commodities and fixed income.

The Fin Tech giant which deals in the supply of electronic trading platforms for asset managers, banks, hedge fund companies and similar organisations has also announced Amsterdam as its hub in the EU following Britain’s exit from the bloc.

Company officials said its profit for the 6 months to September 30th dropped from £75 million to £63 million.

As a result, NEX’s shares dropped 4% to 573 pence by 9:41am, making it one of the biggest losers on the FTSE 250 index. The company, which is expecting to open a new trade reporting centre in Sweden said it had chosen Amsterdam as its hub of operations in the EU. This comes in the light of Britain’s ongoing negotiations with EU authorities.

According to NEX’s CEO, Michael Spencer, “After a long deliberation on the topic, we have opted to establish an operating hub in Amsterdam. It will handle fixed income and repo trading which will allow us to continue serving EU clients after a hard Brexit,” he said.

NEX, which used to be called ICAP until it sold its voice broking business to TP ICAP last year, raised the target for its cost savings for the next three years by £15 million to £40 million.

However, NEX Regulatory Reporting observed a strong growth in the number of its clients following the coming application of MiFID II, which was partially counterbalanced by the low euro interest rate volatility that hit the risk alleviation product. The returns at NEX Markets was boosted by a spike in trading in a China foreign exchange, and emerging markets currency pairs.

NEX, which operates by matching buyers and sellers of bonds, currencies and swaps, gained from the volatility of the market last year, after the political surprises of the EU’s referendum and Donald Trump’s election victory. However, that volatility was ephemeral.

Spencer says the company would also consider transferring BrokerTec, an electronic trading platform for dealer to dealer to Amsterdam. The firm had considered other cities such as Frankfurt and Dublin, but settled on Amsterdam as its preferred choice.

 

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