The CEO of London broker and investment bank finnCap says trading volumes across the City have been “horrendous” in the wake of Britain’s vote to leave the European Union.
Sam Smith says she expects a “bloodbath” when listed stockbrokers deliver their next set of results.
“Where we saw a big impact was trading. We always knew it was going to be 6 months of probably quiet equity markets while people sorted everything out. The trading has been horrendous,” Smith said in an interview with Business Insider.
“Volumes have been low, no one is doing anything, which if you are a broker is pretty terrible. That’s your regular income you rely on. You’re expecting capital markets to be quiet. What you’re not expecting is trading to go through the floor, which is your daily bread and butter.”
Smith told BI she expects results from competitors over the next 6 months to be “bloodbath-y.” finnCap is privately owned by employees but listed rivals who will publish results include Panmure Gordon, Shore Capital, Numis, Charles Stanley, and Cenkos Securities, among others.
finnCap is the biggest broker for companies listed on London’s growth stock market AIM and a top five broker for the London Stock Exchange.
Despite warning that stock trading volumes have taken a serious hit, Smith says activity elsewhere has held up strongly for finnCap.
“All the deals that we were planning all went ahead,” she told BI. “We closed a £45 million fundraising a week later, which was great. No one pulled out or stumbled on that one. An IPO we were working on didn’t decide to move.
“Everything was carrying on. What happened almost daily is you’d have new inquiries whether it was a company looking to do an IPO or a company looking to do a placing or a company looking at an acquisition.”
Smith is sceptical that London will lose its place as the financial capital of Europe after Brexit. She says: “If you’re a big banking operation are you going to move to France or Germany? Are all your staff going to want to move? I don’t know, I don’t think it’s as easy as that.
“Parts of operations might move and small bits of things might move, but I don’t think it’s going to make any material difference at all.”
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