IG Markets’ Response During Fx Market Boom

NEWS RELEASE 23 APRIL 2012

IG Markets’ Response During Fx Market Boom

• Amount of retail FX traders nearly doubles in two years

• Investment Trends names IG Markets Australia’s No. 1 FX Provider

Since the GFC, traders have moved out of share trading and into index and forex markets. This fundamental shift shows traders no longer want single-stock exposure, and that short-term trading has become increasingly popular.

According to the Bank for International Settlements, daily turnover in the forex market is pushing up to nearly $5 trillion a day, while data from consultancy firm Greenwich Associates (as highlighted in the Wall Street Journal article ‘Retail Forex Trading surges’) suggests retail traders account for 18% of the daily volume, up from 10% in 2010. The retail participation in global equity markets has pulled back sharply due to heightened volatility and persistent debt concerns. It seems these traders have found the deep liquidity, tight spreads and 24-hour nature (reducing gapping risk) of the forex market more appealing than having exposure to a single stock, where companies may face specific financial issues, on top of the macro issues.

IG Markets has also experienced a significant rise in forex trading; from around 2007, its clients have migrated away from stocks to the diversification of indices and forex markets. Client activity in forex trading now equates to around 48% of all IG Markets’ daily trades in Australia.

During this currency trading explosion over the last four years, IG Markets has also seen its clients’ understanding advance, thus adapting their trading styles and strategies. With this increased knowledge and the diversity in its client base, IG Markets has seen strong demand for more exotic pairs. In response, it is now offering 30 emerging and exotic pairs ranging from USD/CNY (Chinese yuan, priced off the non-deliverable forwards), USD/BRL (Brazilian real), USD/INR (Indian rupee), USD/KRW (Korean won), as well as many others.

The client response thus far has been very positive and IG Markets has seen a strong take-up rate. It is currently one of the only global retail FX/CFD providers to offer these as a spot product, while clients can trade from any one of 83 pairs in total.

Head of IG Markets, Asia Pacific, Tamas Szabo, said, “We are in a very strong position to appeal to client demands thanks to our broad suite of products, which we consider one of our unique selling points. Before the financial crisis, clients were predominantly trading individual stocks, they now focus more on a macro picture of the world with an aim to profit from changes in the broader global economic environment. However, as stock markets recover we may have seen a peak in the interest in FX, and we could see a return to individual stocks trading if confidence returns.”

IG Markets Named No. 1 FX Provider

In the release of Investment Trends’ December 2011 Australia FX Report, IG Markets has been recognised as Australia’s No. 1 FX Provider*. The FX Report was based on ratings given by 12,000 investors, and IG Markets also received an award for its mobile trading platform**.

“We are very pleased to be named as Australia’s No.1 FX provider in such a fiercely competitive market. We attach our success to setting the benchmark in being fair and transparent, along with highly cost effective pricing - both these aspects together provide our clients with a much needed edge,” Mr Szabo said.

IG Markets also received Investment Trends’ title for No. 1 CFD Provider* in 2011. These awards consolidate the company’s leading position within the Australian CFD industry.

About IG Markets

IG Markets specialises in financial derivatives, principally CFD trading on over 7,000 global share CFDs, indices, forex, commodities, options, binaries and more. IG Markets is a part of IG Group, a FTSE 250 company established in 1974 which now employs over 1000 staff in 15 countries.

A CFD (or Contract for Difference) is an agreement to exchange the difference in value of a particular asset between the time at which a contract is opened and the time at which it is closed.

IG Markets advises that trading CFDs may not be suitable for everyone, since CFDs are a geared product and can result in losses that exceed an initial deposit, and that product disclosure statements are available from www.igmarkets.com.au

* 40% of active CFD traders have an account with IG Markets – Investment Trends May 2011 Australia CFD Report and 23% of active FX traders have an account with IG Markets – Investment Trends December 2011 Australia FX Report

** Results from Investment Trends December 2011 Australia FX Report, based on ratings given by 12,000 investors.

ENDS

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