Veteran broker for wholesale over-the-counter (OTC) financial markets, Tullet Prebon, has issued a trading update for the first 4 months of the year. The company registered a 15 percent increase in its revenues when compared to a year ago, totaling £284 million. The gains are predominantly from the newly acquired PVM Oil Associates in November last year.
Stripping the contribution of the recently acquired broker of oil instruments, the performance of Tullet Prebon has remained more or less flat with a 2 percent decline at constant exchange rates.
The PVM Oil Associates acquisition came at the right time for the company as the energy markets have been booming with activity in recent months. Spare capacity has driven oil and natural gas prices to multiyear lows in January. A subsequent rebound in the aftermath of news about a number of shale explorations and drills shutting down in the U.S. has only brought more volatility to the market.
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Tullet Prebon highlighted in its trading update the lack of volatility across the board as the primary reason for the underperformance of the rest of its business. Excluding foreign exchange, the activity in the wholesale OTC financial markets has been rather subdued.
The Asia-Pacific as well as some product areas in the Americas business of the OTC brokerage has picked up compared to a year ago. At the same time, activity in Europe and the Middle East has reflected the continuing yield curve flattening and lowering, dampening trading activity in the region.
In January, Tullet Prebon entered into an agreement with BGC Partners for the latter to pay $100 million to settle litigation costs. About five years ago, BGC attempted poaching more than 80 brokers from Tullett Prebon’s US-based subsidiaries.