Traders, banks turn bearish on revenue - Acuiti
21st November, 2019|Luke Jeffs
Acuiti saw a dramatic drop in the number of respondents that expect revenue to increase over next quarter
Trading firms and banks have become more bearish in their outlook for the next three months as negative economic signals have weighed on their expectations, according to new research.
The Acuiti Derivatives Sentiment Index, which tracks the outlook of trading firms, brokers and banks, found fewer than two in five respondents (39%) expected revenues to increase when asked in November compared to over half (53%) in the previous month.
Acuiti said in a statement on Thursday 39% is the lowest reading recorded since the survey was launched in April this year.
The report said the negative outlook is particularly evident in North America and the UK, where just 30% and 32% respectively predicted a revenue increase over the next three months.
In September, the Acuiti Derivatives Sentiment Index found 65% of respondents predicted growing revenues.
This month’s reading is the first in which less than 50% of respondents predicted quarterly growth.
Each month Acuiti polls hundreds of senior executives across the global derivatives market on business performance and outlook and publishes the results in the monthly Acuiti Derivatives Insight Report.
“The significant fall in sentiment reported in this month’s Acuiti Derivatives Sentiment Index is a major concern for the industry and comes during what has otherwise been a strong year for most participants in the global market,” said William Mitting, founder and managing director of Acuiti.
“With the return of Quantitative Easing in Europe, increased expectations of interest rate cuts and the ongoing slowdown in global growth, there are fears that markets are returning to a period in which movement is dominated by Central Bank policy," Mitting added.
Banks had a particularly bad month in November as they reported their second worst performance to date with only 6% reporting higher revenues due to falling client demand and trading volumes, Acuiti wrote in its paper.
Acuiti was launched in February 2019 and to date over 550 senior executives in the derivatives market have joined the platform.
