Forex Magnates European Bureau has been informed that IG Markets, a Leading UK-based CFD broker, has closed its Portuguese office in Lisbon. Currently all telephone calls are being diverted to their Madrid office.
IG Markets is the leading Spread Betting firm with over 39% market share in the UK, and is very popular in markets including Australia and Singapore. IG Market had pursued its strategic goal of European expansion and set up offices in Sweden, France, Portugal and Spain over the last five years.
With the ongoing demise in Portugal and other debt ridden countries, it seems Portuguese investors have not been favourable to the markets and are shying away from investments.
The Portuguese stock index, PSI 20, is trading at 4,648.33.
IG Markets Portugal, was established in 2010, it had a handful of employees, mainly dedicated to retail sales. It is estimated that there are only around 750 clients from Portugal. The Portuguese market is considerably small compared to neighbours; however it has been popular for financial traders. There are estimated 400,000 retail investors participating in the local stock market.
Leading Portuguese broker DIF Broker had a white label partnership with Saxo Bank in 2007; DIF was offering the Saxo Trader to its Portuguese and Spanish client base. Recently DIF transferred to FXCM. Banco Best a leading Portuguese bank is a white label partner of Saxo Bank.
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The Portuguese economy has been suffering since the 2008 recession, unemployment is around 15% and the countries credit rating was downgrade to BB-plus from BBB-minus (November 2011). Portugal’s millionaires also suffered during the credit crunch, the total value of the top 100 millionaires was 6% lower than in 2007, totalling to €32 billion, the equivalent of 19.68% of Portugal’s Gross Domestic Product.
Brokers are still interested in the Portuguese market: ActivTrades, XTB and FXPro have translated their websites into Portuguese and have local domains.
The move to close the office comes as a surprise as data from IG’s most recent quarterly earnings show the Portuguese office to have increased client numbers and revenue.
Data from July 17 2012 Quarterly Earnings
Year on year revenue and client growth
Italy 25% 28%
France 25% 26%
Germany 15% 25%
Spain 24% 33%
Portugal 52% 46%
Sweden 60% 72%
Total Europe 26% 32%
Singapore 49% 14%
South Africa 46% 48%
Total newer markets 31% 28%
IG Group officially confirmed this.