IFX takes bet on Chinese market

A small London-quoted financial services group has opened an office in Shanghai with the intention of introducing financial spread betting to the gambling-mad Chinese market.

Spread betting has taken off in the City in recent years, but there are signs the market has become mature. IFX Group says the difficult state of Chinese equities markets precludes an immediate launch but it intends to attract Chinese punters in due course.

Ed Warner, chief executive, said that the office would at first be limited to foreign exchange trading, the company’s other area of business. He said: “If the Shanghai stock exchange turns around and equities are in favour in China, we will have an office up and running. I’m not proposing to do it in a bear market.”

Observers say the potential for spread betting in China is big, as are the dangers. Other gaming companies offering different products have found debt collection difficult.

Spread betting is a form of gambling suitable only for experienced customers where positions are taken on a range of financial instruments, including FTSE indices and individual share prices.

But because of the nature of the bet, both losses and gains can be hard to limit, exposing the punters to big dangers. The practice is illegal in the United States outside Nevada and Atlantic City, New Jersey, and almost unknown elsewhere.

IFX, which operates Finspreads, was reporting half-way figures that showed pre-tax profits rising more than ten-fold to £1.93 million in the six months to the end of September after a management turnaround programme. The company also gave a bullish outlook for the second half.

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