Times Online – Some called it chutzpah. Some were more charitable, describing it as an exercise in putting on a brave face. Whatever it was, Michael Spencer’s claim that it was business as usual at Icap, when that company handles trades between investment banks while those same banks are falling like ninepins, was never going to work.
And so it proved. Icap, his brokerage that has become a barometer for the health of banks, was the biggest blue-chip faller yesterday, losing 89¼p, or 24 per cent, to close at 289¼p.
“Current conditions make forecasting market activity during the balance of the year much more difficult than usual,” he said. He could only say that profits this year would be higher than last. But the financial world has changed for good. Not only have Icap clients such as Lehman Brothers gone bust, but others such as Goldman Sachs and Morgan Stanley are now classified as retail banks and can go direct to the Fed rather than sell securities through Icap.
The FTSE 100 index fell 269.7 points, or 5.3 per cent, to end the day at 4,818.77, dragged down by financials as several European banks were nationalised. One senior trader lamented: “We’re seeing panic selling for the first time in this crisis.”