Broker TP Icap set for rush on US rate rise and oil price shocks

US rate hikes should spur a trading frenzy in TP Icap’s old-school brand of bond, cash and derivatives broking as it prospers from whipsaw markets, it said on Tuesday.

Chief executive John Phizackerley said he was “more optimistic than I’ve been for some time” about its line of so-called heritage products.

These include fixed-income, FX, cash and derivatives broking, which helped establish the business’s name in 1971.

“Those businesses have been under pressure since the financial crisis but looking at the potential for interest rate rises in the US it’s not unreasonable to suggest those conditions are more conducive. There’s reasons for optimism,” he said.

Traders are braced for an expected rate rise from Fed chair Janet Yellen tomorrow, which should spur further volatility.

Other big market swings, including to the oil price, will also aid the broker this year.

“The oil market is firmly a voice market. It’s all to all, so you’re talking to consumers, producers , the sell side and the buy side. If you want to trade a tanker of crude oil it’s not a five-minute conversation,” he said.

Energy and commodities revenues were 11% higher last year at £245.3 million, underscoring the point.

TP Icap, formed last year in the merger of Tullett Prebon and Icap’s voice-broking business, said pre-tax profit was £121.6 million up from £93.7 million and revenues were 12% higher at £891.5 million.

The results do not include the merger, completed after the trading year.