IG Group Overtakes the London Stock Exchange in Stock Market Value
July 3, 2010Peter No Comments »Tim Howkins, CEO of IG Group had more than one reason to celebrate on Friday. Not only was it his birthday but it marked the first time ever that IG Group the grand-daddy of the financial spread betting revolution, surpassed the London Stock Exchange in valuation terms. When the shares opened for trading on Friday, IG Group had a market valuation of £1.52 billion, compared to the London Stock Exchange’s £1.47 billion. Howkins has repeatedly made it his mission in the past that his target was to get IG to trade above the London Stock Exchange since he joined as finance director in 1999, and later being made CEO in 2006. The extent of this achievement can fully be appreciated only when one sees that that IG Index was only founded in 1974 while the LSE has its roots dating back to 1801. London’s Evening Standard however noted that people over at the London Stock Exchange were sanguine. ‘Traders noted that IG’s shares are very tightly held – Dubai has 20%, Qatar 15% and Italian banks 18% – which implies that the share can move on low volumes.’
The London Stock Exchange didn’t issue a statement on this development, but commentators close to the company pointed out that the main reason for the increasing popularity of spread betting and CFDs is that they are free of stamp duty. If the government were to remove the 0.5% stamp duty on shares dealing, worth approximately £3 billion a year, the London Stock Exchange might see its business soaring. One spokesman was quoted as saying ‘We’ve been lobbying for it for a long time and asked for it in the last budget. Understandably, the chancellor had other things on his mind.’ Meanwhile, Howkins is likely to let the Champagne bubbles fly this weekend!
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