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Shares in Virtu Financial soared by more than 30 per cent to a record high on Thursday as the US high-frequency trader’s earnings beat expectations and it welcomed volatility back into markets.
Doug Cifu, chief executive, described the movements on global equity, futures and foreign exchange markets since the start of the year as “the ideal conditions for a market maker” like Virtu. Shares in Virtu were up 27 per cent to more than $25.50 late afternoon in New York.
The New York group, whose share price has struggled since its listing in 2015, said fourth quarter revenues rose 169.8 per cent to $460.4m in the three months to December 31. Net trading income rose 83.7 per cent to $286.4m in the period, up from $155.9m in the same period a year ago. Virtu estimated it made $3.8m a day in adjusted net trading income. The numbers included a first full quarterly contribution from KCG Holdings, a rival that it bought for $1.4bn last summer.
“The strong earnings power the company demonstrated in the less than friendly volatility environment of 4Q17 and…the upside potential in [first quarter] to date with the elevated, heightened volatility levels we’re currently experiencing,” said Richard Repetto, an analyst at Sandler O’Neill.
Mr Cifu also said Virtu had seen “some benefits” from the new Mifid II markets regulations that came into effect in Europe on January 3rd but acknowledged delays to key share dealing rules meant it was still very early to assess its full impact.