Financial Spread Betting News

Spread betters house prices will fall six per cent by mid-June, reports Britain's biggest spread betting firm.

Three months ago the big money was on prices standing still but the latest punters with IG Index could be on to a winner.

House prices fell in January for the third month in a row, says the Nationwide Building Society.

Last month's fall was just 0.1 per cent but it knocked the average price down £1,600 to £180,470.

And it drags the annual rise down to 4.2 per cent - the lowest for two years.

This follows official figures from the Land Registry earlier this week that recorded a 0.4 per cent fall in December - the first it has reported since August 2005.

And it comes just 24 hours after figures showing the number of new home loans hit a 12-year low in December.

Nationwide economist Martin Gahbauer said: "This undoubtedly signals a continued cooling during the months ahead."

The figures put more pressure on the Bank of England to cut interest rates by at least 0.25 per cent next week with further cuts likely before long.

Britain's biggest mortgage lender Halifax predicts a price freeze this year after reporting a 1.3 per cent recovery in December following three successive monthly falls.

But City forecasters believe that is overoptimistic. Brigid O'Leary, property economist at Capital Economics, predicted that prices will drop by 5 per cent this year.

"Looking ahead, we think that buyer uncertainty and a restricted supply of mortgage credit will keep housing market activity subdued.

"A weakening economic outlook will only add to the problems. Falling prices will be a continuing theme in 2008.".

And Allan Monks, an economist at JP Morgan Chase Bank, said: "It appears likely that house prices will continue to fall in the near term.".

A long-running legal dispute between Cantor Fitzgerald and the former head of the broker’s spreadbetting arm has been settled just hours before an employment tribunal was due to hear the case.

Lewis Findlay, who ran Cantor Index from 2003 until he resigned in 2006, withdrew an allegation of constructive dismissal last night.

Mr Findlay had been claiming as much as £12.5 million in compensation, the amount he says he would have been entitled to if Cantor Index had been sold or floated.

In a joint statement, Cantor and Mr Findlay said: "The parties have reached an amicable settlement of Mr Findlay’s claims brought in the Employment Tribunal. Mr Findlay accepts that he was not detrimentally treated or dismissed by reason of whistle blowing. Mr Findlay accepts that those allegations were unfounded and they have been withdrawn.

Cantor Index Limited accepts that Mr Findlay was unfairly dismissed by the Company in January 2006.

Neither side would comment on the details of the settlement.

Mark Blandford’s buying spree continues; there are strong rumours that the founder of Sportingbet has bought a material interest in Asian-facing financial spreads-betting outfit Pan Index. The company operates from the Philippines. Last week it emerged that an investment company of which Blandford is the president had entered into a letter of agreement to buy Parlay for CAN$12.3m (£6.2m).

Financial spread betting specialists CMC Markets are opening their first office in Scotland this month as they continue to expand.

The office will initially employ about six and the company will be targeting 25,000 active investors.

CMC said they believed customers would find investing with contracts for difference and spread bets a more flexible and cost-efficient way of trading financial markets.

Spokesman Patrick Latch ford said the decision to open an office in Edinburgh had 'not been taken lightly'.

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.

IG Group, the spread-betting firm, is attempting to launch in China through a joint venture with one of the domestic Chinese banks.

Tim Howkins, chief executive, said the company had been in talks with several Chinese banks for a number of months.

The disclosure came after the group unveiled a 63pc jump in first half pre-tax profits to £48.2m, after benefiting from market volatility. But IG's shares dropped 8pc - the biggest fall in 18 months - to 360½p amid fears that its international expansion is costing too much. New offices in Paris and Madrid saw administrative costs rise to £40m - 10pc more than analysts expected.

Mr Howkins told The Daily Telegraph he hoped to establish a presence in two key markets - China and Japan. The Japanese plans are "still just at the research stage" and "to move into China you really have to get into bed with one of the local banks", he said. "We're talking to them [Chinese banks] and have been for some time. But it is still too early to say whether anything will come from that."

The typical customer is a 37-year-old male professional who works outside the City, Mr Howkins said. The growing power of compliance departments amid fears of insider trading had impinged on the group's ability to recruit employees of City institutions as customers.

Over the last quarter there were 1,900 new spread-betting accounts and 1,400 contract for difference trading accounts opened each month. Trading on performance of stock market indices accounted for about 30pc of its revenues. Bets on individual company shares contributed about 40pc.

There was a slight shift away from foreign exchange trading towards index trading, which he attributed to volatility of company shares.

On September 14, the day Northern Rock's troubles emerged, one-third of the group's revenues came from bets on the direction of troubled bank's stock. "We do benefit from market volatility - our customers like to trade around news. But in the past two years we have tripled the number of our spread-betting customers and quadrupled the number of CFD (contracts for difference) trading accounts.

''That customer growth is where the long-term growth of this business will come from," Mr Howkins said.

IG raised its first-half dividend by 50pc to 3p a share, payable on February 28.

Spread betting firm IG Index has emerged as one winner from the Northern Rock disaster.

Bosses say punters were placing up to 2,000 bets a day on what would happen to the share price.

Details emerged as IG revealed that half-year profits surged 63 per cent to £48.2million.

And here are the betting lines on MarketWatch from another spread betting company:

Spread-betting firm Cantor Index is offering odds of 5-to-1 on Virgin winning and 7-to-2 on Olivant. Nationalization of the bank, however, is the clear favorite with Cantor at odds of 1-to-8.

The rugby World Cup was good news for IG's smaller sports betting business.

But the firm admits that England's failure to qualify will ‘take some of the shine off’ Euro 2008.

Tradindex announced that it has been acquired by its founding Chief Executive Robin Houldsworth and Peter Shalson, for an undisclosed sum from Tradition UK Ltd. TradIndex offers 3 main components: a web based spread betting platform; a high net worth telephone dealing service; and a personalised CFD service.

MF Global Ltd. (NYSE: MF), the world's leading futures and options broker, has acquired ChoiceOdds, a leading independent UK-based financial binary trading firm, subject to regulatory approval. ChoiceOdds, specializes in making on-line markets in this fast-growing area of retail binary trading - an asset class which is rapidly replacing more traditional types of trading.

"This acquisition will play an important role in our European and Asian retail strategy, as we create single platforms to enable private clients to trade a range of OTC products that replicate listed equivalents such as exchange traded futures and foreign exchange. The acquisition will augment our already significant offerings in retail foreign exchange, CFDs, and spread trading," said Kevin Davis, chief executive officer of MF Global. "Binary trading is growing at an exceptional rate in Europe and Asia as clients are attracted by their flexible nature and, in some cases, tax advantages. In due course, certain markets offered by ChoiceOdds in an OTC context in Europe and Asia will be offered on a listed basis via USFE, the exchange of which we own 49.9%."

ChoiceOdds is a specialist in financial binary trading offering an unrivalled selection of fixed odds, floating odds and binary trades. ChoiceOdds is the only technology platform to offer such a wide variety of trades as well as enhanced frequency of five-minute, hourly, midday and daily trades. Trading on the ChoiceOdds platform allows customers to trade a diverse set of products and markets with limited risk and, in some jurisdictions, tax-free gains.

Mr. Davis added, "The electronic retail movement toward binary products in Europe and Asia illustrates the evolution of the capital markets toward a more balanced playing field opposite retail market participants, requiring less capital intensive strategies and offering more frequent opportunities to profit. Our acquisition of ChoiceOdds is another example of our operational and financial strength allowing us to pursue strategic opportunities globally. Our balanced business model, coupled with the continued pace of trading volumes and market volatility worldwide, gives us great confidence in achieving our financial and operational objectives."

Choice Odds is a wholly-owned subsidiary of Choice Gaming Ltd. MF Global believes the transaction will be neutral to earnings over the next 12 months.MF Global is leading the consolidation of the futures industry, executing 19 acquisitions over the last 18 years. In addition to ChoiceOdds, MF Global recently acquired BrokerOne, the largest online broker of futures and options on the Sydney Futures Exchange and FXA Securities Ltd., a leading provider of online foreign exchange products in Japan.

About MF Global Ltd.

MF Global Ltd. (NYSE: MF), formerly Man Financial, is the leading broker of exchange-listed futures and options in the world. It provides execution and clearing services for exchange- traded and over-the counter derivative products as well as for non-derivative foreign exchange products and securities in the cash market. MF Global is uniquely diversified across products, trading markets, customers and regions. Its worldwide client base of more than 130,000 active accounts ranges from financial institutions, industrial groups, hedge funds and other asset managers to professional traders and private/retail clients. MF Global operates in 12 countries on more than 70 exchanges, providing access to the largest and fastest growing financial markets in the world. It is the leader by volume on many of these markets and on a single day averages six million lots, more than most of the world's largest derivatives exchanges. For more information, please visit mfglobal.com.

London Capital Group Holdings, a financial services and online spread betting company [operator of Capital Spreads], said Thursday that trading for the year ended Dec. 31 is ahead of consensus market expectations.

The Company said it continues to experience growth in all of its main business divisions and will report its preliminary results for the full year on Feb. 20.

Betfair, the online betting exchange, has formed a new business, Tradefair, to provide a range of financial products to the retail market.

Tradefair has been launched with a binaries trading exchange and a traditional spread betting offering.

In a statement, Betfair said Tradefair 'aims to become the leading financial trading destination of choice offering its customers a range of traditional and exchange traded products'.

The exchange technology allows punters to set the price and be the market maker, provided they have the capital, enabling them to 'drive the best price on a range of major financial markets', the company added.

Betfair said the range of markets available on the exchange will grow over time, but already includes major indices, currency pairings and commodities markets.

'We hope to have the same revolutionary impact on the financial market as we have had on the sports betting market,' said Betfair chief executive David Yu.

Tradefair Spreads, provided via a white label agreement with London Capital Group Holdings PLC, is Tradefair's traditional financial spread betting product.

Today's FT has a special report on the Spread Betting industry. Some excellent articles.

Spread Betting firms might find it harder to get customers under the new regulatory scheme although the current market volatility is attracting plenty or rich people wanting to short the market and property stocks.

Anyone wanting to open a spread betting account for the first time will now face strict suitability checks and should be prepared to be turned away if they fail to meet the criteria brought in under Mifid last month.

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Betting companies, however, have had to reject some newcomers. Tim Hughes, head of sales trading at IG Index, says: "Previously there were very informal requirements, but these have been elaborated and we can't offer the product to people who have never done derivatives before." He says he would be stunned if the company had not turned away someone. But he added that early indications suggested that Mifid had not been as disruptive as had been feared.

Applicants who do not have enough experience to spread bet are not necessarily shown the door, however. Some companies can offer guidance to help customers understand the process. IG, for example, has an online education program me in place that provides tutoring in spread betting before they tackle the real markets.

REPORT - Goldman stakes claim in goldrush

On Thursday November 22, one UK spread betting company had two reasons to celebrate. Not only had it just carried out its 50 millionth trade in eight years but it had also announced that one of the world's leading investment banks was taking a 10 per cent stake in its business, and becoming a strategic partner "to grow the business over the coming years". The spread betting firm was CMC Markets. The investment bank was Goldman Sachs. And the two announcements were no coincidence.

REPORT - Foreign exchange no longer an alien land

The strength of sterling against the US dollar is enticing hordes of UK Christmas shoppers to cross the Atlantic in pursuit of bargains. But it is not only those on the hunt for cheap iPods who have benefited from the pound's latest currency movements.

In early November the dollar dropped to a 26-year low against the pound causing a surge of interest in US dollar-sterling trades from spread betters.

"When there is a lot of information in the news on a subject - like the $2 pound, or a spike in oil prices - this generates a lot of interest from spread betters, many of whom are retail investors," says Joshua Raymond, sales trader at City Index.

Volatility often tops the list of excuses for a lousy quarter. But for IG Group, the UK's largest spread-betting firm, it's a fundamental driver. Google searches for "spread betting" in the UK rose 41 per cent in August, as markets shuddered.

Sign-ups followed. Account openings at IG in the past three months were double the rate of last year. Overall half-year revenues, announced on Wednesday, were up more than 50 per cent. The typical new client is a professional male in his late 30s, with about £10,000 to spare, ready to feast on bad news. On the day queues started forming outside Northern Rock, trading in contracts for difference in the stock accounted for a third of IG's revenues.

While volatility comes and goes, IG is counting on growth in overseas markets, where spread betting is a new concept. It started in France and Spain in recent weeks and has tiptoed into the US - which forbids off-exchange derivatives trading by retail investors - by buying an approved exchange. There have been setbacks. Germany is sluggish, while Australia took a year to get right. But low start-up costs - customer service is still run mostly from the UK, for example - bolster margins.

Meanwhile, low barriers to entry in the UK mean spreads for IG and rivals such as CMC Markets and Icap's City Index are under pressure. Established bookmakers such as Paddy Power and Betfair are also edging into financial spread betting.

The surge of interest may subside, as online poker did after 2005. But it is a measure of confidence in the sector that Goldman Sachs last month bought a stake in CMC, at an implied valuation 50 per cent higher than IG's. Even if markets keep twitching, IG's growth trajectory shouldn't.

CMC Markets, the London-based spreadbetting firm, will not be floated next year and will focus instead on building value after Thursday's deal with Goldman Sachs Group Inc. (GS).

CMC plans to work with Goldman Sachs to provide services for the investment bank and its clients, executive chairman and founder of the company Peter Cruddas said in an interview.

"Flotation is a natural progression for us, but there is no logic in doing that in 2008. I want to get the Goldman Sachs opportunities off the ground next year to grow the value of CMC's business organically," Cruddas said.

Goldman has agreed to purchase a 10% stake in CMC, the company said earlier Thursday. The deal leaves Cruddas holding around 85% of the remaining shares, with the other 5% held by staff of CMC.

Cruddas tried to float CMC in May 2006, but pulled the deal an hour before the listing amid volatility that had seen the market fall by 10% since the start of roadshows.

He said he was happy the float didn't happen as he is "delighted" with the Goldman Sachs transaction. Cruddas declined to comment on the value of the deal, but the Financial Times said it could be worth up to GBP140 million.

Cruddas said Goldman approached him about buying some of his shares in CMC six months ago. He rejected the offer at first, but then changed his mind because it would bring business to CMC. "I'm not interested in selling more than 10%. I won't be selling any shares next year," he said.

Cruddas added that he may work with Goldman Sachs on the acquisition front. He does not have a specific target in mind, but says that CMC is looking to buy outside the U.K.

CMC was established as a foreign exchange market maker in 1989. It launched an online foreign exchange platform in 1996 and branched out into contracts for difference in 2000.

The company handled over 16.2 million trades between November 2006 and October 2007. The trades that were executed in that period were worth $1.1 trillion.

It plans to open a further six to eight offices in the next 18 months and Cruddas said he is confident that the business will grow organically by 40% next year.

Spread betting specialist WorldSpreads enjoyed a fivefold increase in profits to €1.3m for the six months to the end of September 2007, the company reported yesterday.

The figures, the first since it launched on the AIM market in August, show an impressive 80pc jump in turnover to €5m and a very significant increase in the number of clients on its books as well as the average number of bets made during the period.

WorldSpreads specialises in financial spread betting, with punters taking positions on share or currency price movements. It also offers clients a sports betting facility.

Chief executive Conor Foley said the business is currently enjoying exceptional growth both in the number of clients and the average number of bets per day. "The volatility in the financial markets has certainly provided much buying and selling opportunities and our clients have embraced these with enthusiasm," said Mr Foley.

Growth

"We have experienced growth in all of our geographic segments and are particularly happy with the progress we have made in our local Irish market.

"Our international expansion is continuing and we have seen encouraging progress, particularly in Spain and Hungary," Mr Foley said.

He added that the group will continue to follow its strategy of expansion into selected international markets by working with reputable and well established local partners with established client bases.

"However, sports spread betting, which now represents less than 10pc of the group's activity, performed below expectations," he said.

British spread-betting firm CMC Markets said yesterday investment bank Goldman Sachs had agreed to take a 10 per cent stake in the firm.

CMC said it hopes the investment will help fund its growth and that its technology could be used by Goldman Sachs.

It also hopes Goldman's backing could help open new markets.

"Goldman Sachs, we feel, can open doors to major banks, major brokers," said CMC executive chair Peter Cruddas. "They have fantastic corporate clients and we have fantastic technology."

CMC did not disclose a value for the deal, but a source familiar with the matter said it was worth up to $284 million (Canadian).

Jan Boomaars, a managing director at Goldman Sachs, said the firm hopes to capture "the significant opportunities in the global retail derivatives market."

Financial spread betting allows speculation on securities movements.

A bungling City novice who frittered away more than £500,000 belonging to friends he met in the pub was jailed for four years on Wednesday.

Milverton Taylor guaranteed his victims – one of whom lost his entire pension – impressive returns if they trusted him with their cash.

Although Taylor did not set out to dupe people, when things went wrong he tried to recoup his losses with fruitless online gambling sprees.

When the truth emerged, most of those the 56-yearold conned were left destitute or homeless.

'You, with a very pleasant winning way, persuaded them there would be no losses. You put their money on spread betting and lost heavily,' said Judge John Price.

Taylor's attempts to make money for others began honestly in 2003. But his deceit began when he profited from the stock market and spread betting.

He invited his victims, who he met in a pub, to invest – claiming their savings were guaranteed.

There was no evidence of an 'extravagant lifestyle – there weren't the Ferraris and expensive restaurants,' the judge added.

Those who trusted Taylor, from Billericay, Essex, suffered enormously. One, Ron Profitt, lost his and his partner's entire £160,000 pension fund.

His solicitor, Jonathan Mann, said Taylor had to live with the fact he had ruined lives. He added: 'It was partly his amiable nature that led to people trusting him.'

But a jail term was inevitable, Taylor was told at London's Southwark Crown Court. He admitted 20 counts of deception between November 2003 and May 2005.

IG Group Holdings Plc (IGG.L) said it agreed to buy the entire issued share capital of HedgeStreet Inc. for $6.0 million, or approximately £2.9 million.

IG Group said that about half of the consideration may be satisfied by the issue of IG shares, while the remaining in cash. The consideration mix will be determined prior to completion of the acquisition, which is expected to be within 21 days.

U.S-based HedgeStreet, which has operated the HedgeStreet Exchange, has liabilities of approximately $1 million and operating costs of approximately $325,000 per month. Currently, the company is not generating any revenue.

Commenting on the acquisition Tim Howkins, Chief Executive Officer, said, “Our acquisition of HedgeStreet represents a further step in our strategy of geographic expansion and, after some further development work, will give us the ability to offer the US market an innovative range of products. This project is likely to take some time to come fully to fruition, and the extent of its success will depend on how broad a range of contracts we are able to develop within the constraints of the US regulatory environment.”.

IGG.L is currently trading at 386 pence, down 3.75 pence or 0.96%, on a volume of 243K shares.

Note - The CFTC had minimum capital requirements, which HedgeStreet was not able to sustain. They were burning $1m a month on 5k-10k of revenue, then tightening and tightening… There was just no money left so selling-off was inevitable.

At first sight, the US might seem to be one of the least likely countries in which IG should set up shop. A longstanding American regulatory prohibition on offering off-exchange derivatives trading to retail investors means that the sort of spread-betting for which IG is best known on its home turf is out of the question. Yet HedgeStreet, a three-year-old start-up, is approved by US authorities as both a financial exchange and a derivatives clearer, giving IG an instant infrastructure that it might have taken 18 months and $10 million to create from scratch. That provides the company with the platform to list binary options, one of its fastest-growing products in Britain.

Late last night it was all looking a bit pear shaped once more but the overnight move in the US markets and rebound from the lows in the Far East have put a bit of sparkle into proceedings this morning.

The call on the FTSE is for 20 points off but at the close last night we were staring down the barrel of a 60 point reversal, oddly enough the closing quote at 21.00 yesterday was exactly the same as the opening one at 07.00 in the morning which has formed something of a possible candlestick 'gravestone doji' which some consider a signal of a trend reversal. There is something of a battle going on at these levels with 6300 being the level of the close of business on the first trading day of 2007. For all of the fire and brimestone of the last ten and a half months it has all added up to a plate of beans. Admittedly in between this number the advance of the 'physical' over the merely 'financial' has been the focus of the year to date. Mining and Manufacturing has done well and banking? - well the least said the better. Metals are bouncing from the lows last night in the states which will help the miners this morning and the renewed focus on value may well bring in further buyers. Yields on many front line stocks look tempting but the problem will be whether these companies can sustain the dividend levels without impacting growth.

What has been the most noticeable aspect of the current financial turmoil is how avoidable it all seems. It has come as something of an eye-opener to me how all the major players appear to have been hit by the same problem. There must be some big banks who did not get into the subprime sector but I have yet to hear of them. What appears so strange is that when you stand back and look at the lending practices that led to this crisis, you have to ask would any of the participants (if they were personally making the actual mortgage commitments) have lent the money on such lousy credit ratings.

Vodafone have outdone expectations with a plus £4.56bn pre tax on forecasts of 4.35bn. The stock is likely to bolster markets (unless the dreaded buy the rumour sell the fact come into play) and Mr Sarin can be forgiven for preening himself a bit given the flak he has endured of the past few years. The stock is u some 27% this year and the increases in the dividend will cheer investors.

Sainsbury come with a trading statement tomorrow and rumours abound that Robert Tchenguiz is pushing to get them to reappraise the REIT route. The board may consider that this is an attempt to have your cake and eat it. A sort of 'heads' I win on a takeover but (if this fails) then 'tails' I win on a property asset sale. The fact is that Sainsbury's margins are wafer thin and if they were forced to 'rent' the freehold off a property vehicle then there would be no fat left for the bad times. The company is still trading on some 23 time next year’s earnings which is way in advance of any possible actual trading improvement (especially with food inflation now rearing its head).

FX markets were the big movers yesterday and look like being the place to be today as well. Sterling at one point hit 2.0520 yesterday vs the dollar, fully 6 1/2 cents off the highs of Friday (the biggest two day move in over 4 years). Today seems little different except in the opposite direction with Cable now bouncing up to 2.0666-2.0669 in morning action and punters are feeling quite happy having gone home long of the pound. There is actually some solid support around the 2.05 level which no doubt helped to stop the rot yesterday but above 2.0650 there is little to go for of the target variety aside from a return up to 2.11. We moved higher and lower so quickly that there was no volume support/resistance building. If the pound is to remain at these elevated levels then it must spend a bit of time consolidating. Of course against the Euro and Yen the story is not so nice after the massive support at 1.4240 failed yesterday. Bears are looking at this cross and licking their lips if there is not a return to the pas three month trading range soon. Aside for interest rates the pound has not much to say for itself with an economy with much of the same structural problems as the dollar but with a much higher tax burden as well. The cost of Holidaying in euro land is going to come as a nasty surprise come next summer.

Gold had it worst day for ... umm.. quite some time...[ahah the 13th June 2006 (when it dropped over $40)]. Oddly enough that day pretty much saw the best buying opportunity for the past few years. Clients are trying to buy into the fall but were hurt on almost a continuous basis yesterday. As my comment suggested yesterday the early buyers were run over when the big traders came in and sought out the easy longs to batter. We may well see some volatile activity as spooked traders make quick buy/sell decisions. At the moment we are at 805.0-805.5 up a buck or so from our closing level yesterday but in the meantime the price has actually been another 10 dollars lower in very late US action. There appears to be good support between 793 and 797 which will bolster the bulls but on the other hand the speed of the reversal will probably make buyers nervous the higher we go.

This time the FTSE did not even attempt to have a look at the 6750 resistance failing to make any headway on the estimated pre-open levels at 6725 and then trading in one of the tightest ranges we have seen since the July fall out.

With the Far East having one of its quietest days for months we are opening just a tad lower this morning at around 6690 off 15 pips in line with the slightly weaker US and European markets. There is some minor support at 6685 and then at 6670 but if we drift below 6640 then we may see some more concerted profit taking. The comment from yesterday still holds well, the last three times we attempted to break above 6700 the market reacted with three big falls. But if we can close above 6750 then we may well be off to the races again.

For those of you who like to think that history repeats itself the announced massive over subscription to the Petro China float has echoes of the UK government float of BP back in 1987 just a few days before the crash! Of course this is unlikely just at the moment but the Hang Seng and Chinese indices are overvalued in anybody’s language, in comparison to world equity values, and may well be in line for a correction.

Imperial Tobacco continue to 'thank you for smoking' and have posted a 6% rise in full year profits. Although (of course) in league with the devil the company has managed to fight off an increasingly hostile official line and the stock is one of the best performers in the FTSE 100 (and that includes the mining stocks). The ability of the company to continue to acquire new customers in the face of ever more hysterical warnings says something that the authorities still do not understand about the human psyche. If you demonize something enough you make it attractive.

Schroders have lifted profits by over 50% which shows that not all Funds have suffered in recent times. The rise in the stock over the past year did demand a return in this region but the results are going to bolster their reputation and fund raising ability.

On the FX front Cable, like the FTSE, had a sniff at the highs yesterday before selling off back into the 2.0500's but this morning we are seeing increasing buying below 2.0600 as punters begin to believe that the pound can follow the euro higher. gbp/eur has bounced off the 1.4240 level again and may now be looking at a double bottom on the charts. If the pound returns to favour there is quite a bit of room for maneuver above here at the moment with bulls looking for an initial target of 1.4500 and then way up at 1.4800. Of course it will take a significant change in euro perception for this to happen and the most likely direction is still a continuation of the current trend lower but…

Gold markets have paused for breath in their headlong rush for the $800 level and are now ten dollars off the highs of yesterday at 785.5-786.1 but this is already 3 dollars higher than our opening level of 782 as dealers yet again take any sell off as an opportunity to buy. The charts briefly gave the impression that we may be forming what is known as a potential 'island reversal' but the first hours price action has closed off this possibility. Our clients remain massively long and are happy to pick up more on this small reversal. Even a reversal to 760 would not dent the trend line higher.

Brent has drifted slightly lower this morning as the storms in the Gulf abate slightly and the political tensions go nowhere. At the moment every newspaper and commentator is talking about $100 but it is often the case that when everyone is convinced of one outcome is when becomes the wrong one. Our clients are actually pretty flat in oil at the moment as they try to get a handle on whether we will push upwards or whether the elastic band effect will plummet us back down again. It is advisable at these levels to keep your stops in tight no matter which way you bet as the price action is very violent and will not be kind if you get it wrong.

Royal Dutch Shell 3Q net income was $6.92bln ($5.94bln expected), while profit ex-item reached $6.13bln ($5.58bln expected). Exploration & Production segment earnings declined to $3.51bln compared with $3.74bln last year, Gas & Power segment earnings fell to $568m from $781m a year ago and Oil Products CCS segment earnings dropped to $1.65bln vs $2.16bln a year before. The Co said that its execution strategy is on track.

Resolution's board meets today to discuss a formal bid from Swiss Reinsurance and Standard Life (Times) .

British Airways to end its franchise agreement with GB Airways from March 2008.

EasyJet agreed to acquire GB Airways from the Bland Group for £103.5m in cash.

Lonmin 4Q total tonnes mined dropped 8.6% YoY to 3.5m and during the period it produced 207,513 saleable ounces of Platinum (-19% YoY). The Co's CEO commented: "The fundamental quality of our asset base is robust and we are confident that we are resolving our operational issues as we build a solid foundation for long term sustainable growth."

Aviva said 9M total worldwide sales increased 26% YoY to £28.27bln, worldwide life and pensions sales were up 21% to £22.93bln and new business profit growth was 24%.

Halma’s 1H trading performance is expected to be in line with the Board’s expectations as the group continues to achieve organic revenue and profit growth. The Board remains positive about prospects for the FY and the medium term.

Aegis Group acquired Genesis Media.

PartyGaming announced in its 3Q trading update that group revenue was up 24% YoY to $115.7m. The group remains confident about its prospects for the FY and beyond.

ARM Holdings 3Q pre-tax profit seen at £14.9m (£21.2 a year ago) on revenues of £68.8m (£64.8m).

Elan Corporation 3Q pretax loss seen at $337.7m ($104.7m last year) on revenues of $840.6m ($394m)..

Marks & Spencer plans to open a store in Shanghai (Oriental Morning Post).

BHP Billiton, Go-Ahead Group AGM.

Reuters Group 3Q trading statement expected.

Oil & Gas: Cairn Energy (+6.35% to 2413p) reached a new 3-month relative high against the FTSE 100.

Industrial Goods & Services: BAE Systems (+3.36% to 507p) reached a new 3-month relative high against the FTSE 100.

Media: BSkyB (-1.97% to 646.5p) and Daily Mail & General (-3.54% to 600p) closed at a 3-month relative low against the FTSE 100.

National Grid bought back for cancellation 750,000 shares at 786.4914p from Morgan Stanley Securities, Persimmon bought back 250,000 shares at 985.9p, BP bought back for cancellation 2,000,000 shares at prices between 607p and 617p, Kazakhmys bought back for cancellation from JPMorgan Cazenove Limited 170,000 shares at 1418.9969p, AstraZeneca bought back for cancellation 239,623 shares at 2393p.

BP agreed to pay $303m to settle charges for the allegedly price-fixing in the US propane market (WSJ).

Resolution: Standard Life hasn't yet decided if it bids for the Co and on what terms.

Friends Provident 3Q life and pensions new business increased by 35% to £2.15bln and by 21% to £5.58bln in 9M. In the UK 9M life and pensions new business were up 13% to £3.42bln, while total International new business rose 36% to £2.15bln. The Co looks forward to continuing to build its business in the UK and overseas.

Home Retail 1H revenues were up 3% YoY to £2.73bln, gross margin was ahead by appx. 125 basis points at Argos and appx. 300 basis points at Homebase, operating profit increased 34% to £136.1m and pre-tax profit jumped 40% YoY to £149.8m. The Co's CEO added: "Although we remain cautious given the uncertain consumer outlook, as we move into the key seasonal period both businesses continue to enhance their customer offers, while also benefiting from the leverage of our shared group operations."

Kazakhmys 9M total copper cathode production fell 6% YoY to 277,100 tonnes, zinc in concentrate production was 101,200 tonnes (-6% YoY), while gold production from own concentrate increased 3% and silver production dropped 7% YoY. The Co will focus on maximising the efficiency of the existing operations.

Bodycote International announced in its trading update 3Q revenues grew by 19%, organic revenue growth in Testing Strategic Business Unit was 10% and organic revenue growth in Thermal Processing SBU was 6.5%. The Board expects all markets to remain buoyant.

ITV Productions is interested in James Grant Media Group (The Times).

Umbro: Nike's bid for the Co may become subject to investigation of competition authorities in several markets (FT).

Davis Service Group sees 3Q double digit growth in both revenue and operating profits. The group continues to enjoy organic growth in excess of overall economic growth in Nordic region and is confident of its prospects for 2007.

Utilities: International Power (+3.26% to 482.75p) and Scottish And Southern Energy (+1.9% to 1558p) reached a new 3-month relative high against the FTSE 100.

Industrial Goods & Services: Meggitt (+3.42% to 340.5p) and Amec (+1.87% to 817.5p) closed at a 3-month relative high against the FTSE 100.

National Grid bought back for cancellation 731,092 shares at 786.7916p from Morgan Stanley Securities, BP bought back for cancellation 3,350,000 shares at prices between 601.75p and 615.5p, William Hill bought back 200,000 shares at 612p, Anglo American bought back 100,000 shares at prices between £30.90 and £31.35, United Business Media bought back for cancellation 140,855 shares at 696.3977p.

Markets have now neatly reversed the falls of Monday and in some cases are significantly higher than the closing levels just before the weekend.

Far Eastern market recovered their poise after the nervy Monday session and funds continue to pile into Chinese, Hong Kong and Indian equities with the Hang Seng managing a 1000 (!!) point rally and the Bombay Sensex up almost 700.Both well over 3% up on the day.

The FTSE is opening some 45 points to the good on the off at just over 6500 (6505-6506 as I write) and has bounced strongly off the support mentioned yesterday at 6400. As mentioned the 6400 and 6500 levels have proved to be both something of supports and resistances and punters who went home long last night have been taking profits on the open this morning. Yesterday started off on the bloody side for our clients but as the day wore on longs who held their nerve were rewarded. If we stay above 6500 for a while this morning there is a good possibility of buyers coming back again but punters are understandably twitchy about any direction just now.

The Americans did what they normally do when the Europeans make a big bear move on their markets...trade in the other direction. US market do not mind going down but they always seem to hate it when the movement occurs outside of US trading times. If all a trader ever did was wait for the few times a year when the Dow was called more than 100 pips lower in UK morning sessions and then buy I feel that their win to loss ratio would be very sweet indeed!! The US markets are called higher again this morning at 13593-13597in the Dow and 1508.9-1509.3 for the S&P (above 1500 once more) and with credit worries 'apparently' rising again equity markets might seem to be the second safest place to be (cash being number one! ).

I say credit markets are 'apparently' being squeezed because the newspapers are full of it this morning. Unfortunately for all these column inches the Short Sterling and Euribor contracts do not bear this out as the front month December contract is pretty much where it has been for the last month. With the big US banks trying to set up this rinky dink vehicle for distressed debt we may be seeing some talking down of asset values so that they can be picked up a truly sparkling levels.

Debenhams have produced a profit increase of 13% on like for like sales down by 5% and margins down by 0.9%(?!?) They have achieved this by the addition of almost 800,000 sq ft of new floor space. The shares are now well above the lows of September of around 84p and are sunning themselves at 108.1-109.2 up 5.5p this morning. Our clients have been short this stock for a very long time and seem no closer to cutting out and after the last year who can blame them. With problems still on the horizon this is still a speculative recovery play.

S&N's defensive language is hardly likely to win friends and influence people. Calling a partner (albeit one who wants to take you over) 'incompetent' and 'dishonourable' take financial briefings to a new level. The Stock is still stuck around the 750 level at 764.1-765.4 as investors ponder the chances of a competitor approach. The big stock holders will not want to miss out on a potential windfall so the S&N board must make its best efforts to drive up the stock, I would be surprised if being gratuitously rude is going to achieve this effect.

On the FX front cable traded virtually the entire range mentioned many time over the past few weeks (2.0250 to 2.0500) in one day. We have now confirmed this range quite dramatically and our clients were happy to sit on the shorts built up on Friday and Monday morning. We are now attempting to emulate the price action on the 4th, 9th, 12th and 17th of this month as the charts show an almost perfect pattern for four days. If this time is the same we may see the markets climb to 2.0430/50 if this bounce is merely a mirage then we still have to get back below strong support at 2.0300 and (of course) 2.0250 before the bears came out to play.

As feared yesterday Gold ran into a bit of a problem as weak late coming bulls, tempted by talk of $1000 an oz, were driven out of positions as the price dived by, at one point, $20. Oddly enough it fell neatly down to the support level mentioned yesterday at 745 before finding buyers once more and recovering to the mid 750's. Who says you never read anything useful! We are now struggling to get above the 756 resistance level and a failure to clear this point may bring sellers out again. Punters are (as ever) still long but seemingly not so confident as in recent times.

BP announced 3Q profit of $4.4bln compared to $6.2bln last year, while total revenues fell to $72.83bln from $73bln a year ago and effective tax rate was 35% compared with 40% a year ago.

BHP Billiton reported that iron ore output rose 7% in the three months ended September 30 to 25.86m tons, crude oil fell 7% to 11.298m bbl, natural gas rose 6% to 95.68 bcf, alumina 7% to 1.15m tons, coal fell 4% to 19.62m tons. In other news, the Co may build a $3bln aluminum smelter in Democratic Republic of Congo.

Debenhams FY preliminary operating profit reached £2.3bln vs £2.19bln a year ago and pre-tax profit was up 13% YoY to £127m. Like-for-like sales fell 5% for the period. the group remains confident to make further progress.

Autonomy Corporation announced 3Q pre-tax profit of $24.9m compared to $10.6m last year, while revenue rose to $89.5m from $60.2m a year ago and net profit reached $16.6m vs $10.6m in 3Q06. the group's CEO added: "Autonomy remains extremely well positioned to capitalize on market opportunities and continue growth."

Prudential reported 3Q total group insurance reached £1.9bln, while total group retail insurance was at £1.89bln. The Co's CEO commented: "Our strategy remains focused on the growing global market for retirement savings and income."

HSBC Holdings plans to sell its online credit card business Marbles (Independent).

Inchcape reported 3Q sales were up 20.2% and like for like sales moved up 3.3%. 9M sales rose 27.5%.and like for like sales improved by 3.1%. The group remains confident in FY prospects.

Ultra's Flightline Systems business won a $21m multi-year contract by Lockheed Martin to provide software-defined sonobuoy receivers for the US Navy's MH-60R Anti-Submarine Warfare helicopter programme.

Umbro: Nike may bid for the Co today (Times).

Reckitt Benckiser may report 3Q net income rose 43% to £225m from £157m a year earlier on revenue up 4.8% to £1.3bln.

Telecommunications: Vodafone (+2.69% to 179.7p) closed at a 3-month relative high against the FTSE 100.

Financial Services: Cattles (-1.81% to 338.75p), British Land (-2.28% to 1028p) and Provident Financial (-2.54% to 824.5p) closed at a 3-month relative low against the FTSE 100.

HBOS bought back 250,000 shares at 825.0730p, BP bought back for cancellation 4,600,000 shares at prices between 602p and 609.5p, National Grid bought back for cancellation 990,000 shares at 778.5108p from Morgan Stanley Securities, Persimmon bought back 250,000 shares at 952.57p, AstraZeneca bought back for cancellation 236,018 shares at 2433p, Anglo American bought back 100,000 shares at prices between £30.15 and £30.93, William Hill bought back 200,000 shares at 603.351p, United Business Media bought back for cancellation 300,000 shares at 680.16p.

GFT Global Markets UK Ltd., a world leader in online derivatives trading, has increased its index offerings, further establishing the company's global range of products for spread betting and CFD customers.

The new initiatives include nine new indices, tighter trading spreads and competitive pricing, lower initial margins, as well as expanded "out of hours" trading on more indices.

"Our goal of helping customers trade more markets for less is only the beginning of the changes we are making to benefit customers trading CFDs and spread betting in stock index products," said Simon Mansell, COO, GFT Global Markets.

GFT Global Markets stock index offerings include:

New markets

Nine new global indices have been added, including the Korea 200, China H-Shares and Mexico 35. GFT Global Markets now offers 29 indices from more than 20 countries - among the most indices offered by any CFD or spread betting provider.

Tighter spreads

Overall spreads for index products have been reduced, and now begin at just 0.3 index points. The popular US SPX 500 cash index is now quoted at just 0.5 index points.

Lower margins

Initial margin requirements for all index products have been reduced by half or more. Customers can now trade with initial margins as low as 0.5% on indices including the German 30, France 40 and Australia 200.

Expanded 24-hour trading

GFT Global Markets' popular "out of hours" trading has been extended to 16 of the most commonly traded index products, so customers can trade selected indices 24 hours a day. Markets with 24-hour trading include the UK 100, US SPX 500, Wall Street 30 and Japan 225.

"Stock index trading is extremely popular, as it provides a way to take a position on the direction of a large group of shares with a single order," said Mansell.

"With the popularity of 24-hour trading in our other markets, such as spot forex, we knew that widening our trading hours for stock index CFDs and spread bets would provide even more flexibility and prove to be just as popular."

GFT Global Markets UK Ltd.

Received the following comment from a reader, can confirm that the rumour is right Paul...

"Yesterday afternoon I had a phone call from Cantor Index saying that they were stopping all credit accounts with effect from October 5. I am quite pi**ed off about the whole thing, because I have never put a foot wrong. They claim the decision comes from the American Head office."

European Markets are opening slightly weaker this morning with US markets bucking this trend and pushing above last night’s close. It is difficult to see an obvious reason for this but we are seeing some buying of the FTSE and Dax in early action below 6600 and 7950 and selling of the Dow and S&P.

Traditionally the market always falls in October, and when the year ends in a 7 this is apparently even more certain (don’t look at me, I don’t trawl through history to find this stuff out!). A few days ago with all markets poised to break to new highs you could have been forgiven for echoing Henry Ford's advice that "History is bunk" but now, after another US investment house has warned of overvaluations and Oil and Gold markets have shot up to new highs, investors are starting to wonder.

The Dow is now around 30 points above September's close but the FTSE is still 150 higher. If we believe in patterns then the next few weeks could be a bit fraught for the UK index.

The FTSE is trading at 6599-6600 having opened 30 points lower than pre-market estimates. The Spread Betting companies are usually quite good at calling opening levels but this morning it seems that there may have been some spoof being played with early pre-opening bids and offers being pulled at the last second. Yesterday was a truly dire trading day with the FTSE trading the same 15 to 20 point range no fewer than 17 times. A great market profile for our day traders who like to bet on the ranges. Dealers, as mentioned, are buying this morning in the FTSE so obviously the anticipation is for a recovery of yesterday’s losses.

Sporting bet have released their final year numbers with operating profit at £7.4m (not bad considering they lost some 75% of their business in one go last year). But with operating margins at just 6.2% analysts will be looking for some serious cost cutting. Capitalization at £210m means that much of any good news is written into the price which probably accounts for the fact that the share price has remained static this morning.

FX markets seem to be very much in two minds. The Far East spent all the early morning selling Sterling and Euro sharply lower versus the Yen but the Europeans seem to completely disagree and have recouped much of the falls with some strong position buying. gbp/yen was at one time down at 235.80 but has now bounced to 237.38-237.46 with our clients seeming to be very much two way with buyers matching sellers. The Euro/yen (like the sterling cross) has come off from the highs of Monday at 165.75 and dealers are waiting to see whether the support at 165.15 and 164.85 will hold. In early trade we did go below these levels but have now swiftly recovered them. At 165.24-165.27 we are still very close and the penalty for getting it wrong in this instance would seem to indicate that punters should 'keep their powder dry' for the time being and await the day’s events.

As mentioned a couple of days ago cable seems to be stuck in a trading range of 2.0200 to 2.0500 with 2.0300 and 2.0450 as a tighter range within this. The last two days trading action have borne this out once more with selling above 2.0430 taking us down to 2.0300 yesterday where buying was seen in enough size to see a sharp bounce almost back to 2.0400. Overnight the support has been tested again but yet again strong buying at 2.03 has seen the bears off. At 2.0353-2.0356 we are now mid range and seemingly going nowhere.

Oil still pressures the highs with December Brent at 83.47-83.52 just 35 cents of the all time high. There is no evidence of any profit taking just yet and if some of the geo political events actually occur then we could be seeing a nasty little spike. Turkey is annoyed with the States already after the old 'going back over ancient history' activity concerning Armenian atrocities around the time of the First World War so may not be as amusable as it might be to a little persuasion over Northern Iraq. A US pull out from Iraq will (everyone knows but seems afraid to say) would leave a huge power vacuum. Turkey would love the oil rich north, Iran the Oil Rich East and Syria and Saudi the Oil Rich West and South. After the last four years would anyone step in to stop them?

What a difference a day makes…24 little hours…

On Friday morning 'our Gordon' thought he was the toast of the town riding on a 6 percent opinion poll lead, in a franchise where the stakes are so loaded in Labour's favour that even a 5 point lead for the Tories would only give them a one seat majority this was as good as a gold plated endorsement. All the indications were for an election in November as his own party, fearful of the belt tightening that will be required in the coming years, were clamouring for the off. It is not easy to know why but since the demise of Tony the 'Sun', that organ of terror for politicians across the country, seems to have taken a dislike to the new Premier and the Poll in the NOTW.

Today looks like being one of the more boring at least to start with. The FTSE is unchanged and the Dax, S&P and Dow are just slightly off after the efforts on Friday. The week is quite light on data from the US until Thursday and Friday with the Chancellors pre budget speech to focus on tomorrow in the UK as well as a few indicators. For home audiences the important number will probably be the PPI today at 09.30 with Industrial and Manufacturing Production (no doubt someone will tell me what the difference is) to back it up.

The FTSE is opening at around 6592 which, as mentioned, is the closing level for Friday. Our punters do not seem to be too confident that current levels can be maintained if the positions that are being taken out are anything to go by. Sellers are out numbering buyers by 2 to 1 in early trading looking to take advantage of any vertigo that may be experienced at the current prices. For long term traders the question is going to be whether investors, with the world economy looking to be under growth pressure, will focus on existing returns in a falling rate environment or on the potential erosion in corporate income.

Dealers continue to be slightly negative on the pound which has proved to be something of a dodgy opinion to have of late but is paying off in early trade this morning. There is good support all the way from 2.0325-2.0345 on the short term trend lines but we are currently some way from this at 2.0382-2.0385 and still battling over the 2.04 level.

The real loser in recent trading has been the Yen as the carry trade has returned with a vengeance. The eur cross has bounced 1600 points from the lows on the 17th August and the last four weeks have been virtually one way traffic. We are now slap bang on a major resistance area between 165.20 and 165.45 with the current quote at 165.35-165.38. If we can close above 165.45 then the target for Bulls will be the highs at 168.95. For the pound, which has been suffering itself against the Euro, the cross has also been favorable but only in the past couple of weeks as the Yen woes have increased. There is very heavy resistance at 239.60 and then a volume range from there to 245.00. The momentum is definitely with the pound here but there are heavy bars across the way at these prices. gbp/jpy is now at 238.82-238.90 up 20 this morning and feeling comfortable.

Gold is having a bit of a profit take this morning after the interesting trading ranges of last week. The sell off in the early part of last week took out the weak longs who were hold back the market and once they had been cleared away we were off to the races again. This time, though, the gold market failed to drag silver along with it as the lesser metal is still some 50 cents from the highs. This failure to pull the comparable precious metals or to hit the high reached at the end of September may weigh on further strength and this morning we are seeing the price off some 4 bucks at 737.9-738.5.

Oil is becoming ever more fragmented with dealers looking to day trade on the current ranges. There seem to be good buyers below $77 but as soon as we get near to 79 or 80 the sellers gain sway. We will probably need an event to break out of the current range with the price this morning just drifting slightly lower to 78.54-78.59.

Investors locked into a share which has been suspended from trading onthe London Stock Exchange can breathe a little easier.

Cantor Spreadfair, the retail spread betting exchange, is offering an onlineservice enabling investors to buy or sell a 'frozen' stock throughout thesuspension period.

Settlement will be based on the closing price of the stock on its first fullday back trading on the market.

Past Spread Betting News