TP ICAP is considering selling part of its highly profitable data business, including through an initial public offering.
TP ICAP CEO Nicolas Breteau said in its 2023 financial results that the company plans to issue a spin-out with parameters “including a possible IPO of a minority stake in the business, while retaining ownership of the assets.” He said he is exploring options.
Parameta is the main driver of the broker's revenue growth, increasing by 8% in 2023.
“There is a growing demand for high-quality over-the-counter financial market data,” Mr. Bruteau said. “Global spending on financial market data in 2022 is expected to be $37 billion, and industry observers predict that growth in 2023 will exceed historical growth rates.”
In 2022, shareholders called for a sale of Parameter following a poor year and the company's share price decline in 2021.
In 2023, group revenue increased by 3% to £2.2bn. Brokerage business was flat, with higher revenues from foreign exchange and money market funds offsetting declines from equities and margin trading.
Revenue from TP ICAP's energy and commodities business rose 18% last year as volatility in energy trading led to record revenue growth.
The company said in its full-year results that all three of its major assets – oil, gas and power – saw double-digit growth.
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Bulteau said the Energy and Commodities business is working with Parameter to help the company monetize more trade data as the energy transition accelerates.
Revenue at the company's stock and bond trading brokerage, Liquidnet, decreased by 1% compared to 2022. As with exchanges, weak trading volumes in equities have hurt returns attributable to this asset class. Decrease in block trading volume on TP ICAP contributed to the 9% decline.
The last quarter of 2023 saw strong stock trading, with revenue increasing 13%.
TP ICAP completed a £30m share buyback in January and announced a further £30m share buyback on 12 March.
TP ICAP's share price rose more than 10% to 220p in early trading after the full-year results were announced.
The broker went live with its spot cryptocurrency trading platform, Fusion Digital Assets, last year.
On March 11, the Financial Conduct Authority announced that UK registered exchanges will be allowed to list listed bonds backed by crypto assets. The U.S. Securities and Exchange Commission's decision to allow Bitcoin ETFs has given institutional investors a strong boost in spot trading.
On the same day, the London Stock Exchange announced that it will begin accepting applications for Bitcoin and Ether ETNs in the second quarter.
After the SEC approved a Bitcoin ETF in January, cryptocurrencies regained steam. It now trades for around $70,000, a stark contrast from 15 months ago, when it was trading for less than $20,000.
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