Market conditions in the third quarter of 2008 have accelerated consolidation in the Financial Services Industry (Bear Stearns â JP Morgan, Lehman Brothers â Nomura, Lehman Brothers -Barclays Capital, Fortis - BNP Paribasâ¦) as well as hedge funds collapsing, which makes it more challenging to predict the future and brings serious concerns of activity slowdown for 2009.
GL TRADE Front Office solutions (Trading Systems and Client Connectivity), which are up 4.8% on a like-for-like basis and at constant exchange rates, have already been hit in Europe and the Capital Markets Business Line has been affected worldwide, with a revenue drop of 11.5%. This downturn is offset by an exceptional year on the Post-trade area, particularly in Derivatives, where revenues grew by 46.4%, Post Trade for Securities having risen by 15.2%. The Information Services Business line is up 14.1%. MarketMap, a product acquired in 2007, with an outsider positioning in a market dominated by large vendors, is up 14.1%. It is gaining traction as a cost effective data solution in the context of careful management of IT expenditures.
GL TRADE also benefits from its wide geographic footprint. Asia and Brazil have been recording very good second and third quarters this year in terms of sales, and will contribute positively to our 2008 operations. The company nevertheless remains cautious on activity in emerging markets for 2009.
Outlook for the remainder of 2008
For the full year the company stands by its organic growth rate target of around 9% on a like-for-like basis and at constant rates. Contract cancellations due to consolidation and defaults in the industry will mainly hit the 2009 order book.