Citigroup sees costs squeezing IG Group

LONDON (SHARECAST) – Citigroup has lowered its stance on IG Group to ‘hold’ from ‘buy’ and cut its price target on the stock to 400p from 425p, saying the spread betting firm faced higher costs.

Referring to IG’s interim results which were released yesterday, Citi noted that second half margins had been 60% higher in the second half of 2006/07. It added that declining asset prices made a fall in spread betting more likely.

The broker observed that declining equity markets had resulted in a 20% reduction in clients’ cash held on deposit with IG Group during the first half.

Tags: ig, IG Index, igindex. IGG.L

This entry was posted on Wednesday, January 16th, 2008 at 1:32 am and is filed under Financial Updates. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.