News blog

Plus Markets Group

BY: Andrew Hore |
POSTED: 25/08/2010 |

Plus Markets Group plans to set up a debt market for small companies and a derivatives market as part of its attempt to move into profit.

Plus Markets intends to expand its market offering by creating a corporate bond product for companies. There are no real details of the product other than the companies will “issue bonds subscribed to through specialist funds”. A specialist finance firm will help create the bonds, which should “provide good levels of income for retail investors”.

A Plus Derivatives Exchange (PDX) is planned to enable customers to manage exposure to interest rates through interest rate swaps.

Costs are being reduced by two-thirds to below £5m for 2011. Plus Markets says that it has enough cash for two years and it believes it can break even in that time frame. That was announced in May and the second part of the strategic review published today is focused on improving revenues. The 2009 revenues will have to increase by at least two-thirds to cover the lower cost base.

The cost savings are coming from Plus Markets ending its technology agreement with Nasdaq OMX and replace the services provided with an in-house built quote and trade reporting facility. Plus Markets believes that this will be more cost-effective and efficient. Plus Markets also plans to offer a “Request For Quote (RFQ) model providing best execution, single fill and price improvement opportunities to retail investors”.

On top of that, Plus Markets intends to launch a new order book but this is subject to outside investment of £10m in a special purpose vehicle. Algo Technologies will provide the platform. This will be a pan-European venue.

At 1.875p, up 0.2p on the day, Plus Markets is valued at £7.25m.

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