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Numis warns equity markets look set to remain ‘challenging’

Numis warns equity markets will remain ‘challenging’ amid economic turmoil as stock sell-off eats into investment bank’s revenues

  • Numis saw revenue from equities fall in three months to 30 June, update shows
  • Global equities facing volatility amid economic upheaval and war in Ukraine 

Numis has said equity markets look set to remain ‘challenging’ as it posted a trading update today.

Global equity markets are facing heavy selling pressure amid worsening economic sentiment, inflationary pressures and the war in Ukraine, which has eaten into the investment bank’s quarterly revenues. 

Numis raked in £40million worth of revenue for the three month period ending 30 June, down from around £50million a year ago.

Looking ahead: Numis has said equity markets look set to remain ‘challenging’

Numis said its latest revenue figure was ‘ahead of the first half run-rate and reflects a strong improvement on the Q2 revenue performance’.

A ‘favourable’ mergers and acquisitions environment helped boost the group’s bottom line during the period, it said. 

But, it added: ‘Equities revenues were marginally below the first half run-rate reflecting the cautious investor sentiment and market declines in the period, particularly across UK small and mid-caps. 

‘Despite these more difficult market conditions, our trading performance in Q3 was marginally better than the run rate of H1, helping to offset a quieter period for commissions.’

On capital markets, the investment bank said: ‘Capital markets volumes remain subdued and whilst we have seen some recovery in activity during the third quarter, we expect macro-economic concerns to restrict deal volumes in the short term.’ 

The group also said its Dublin office had received regulatory approval from the Central Bank of Ireland, adding that it expects to start trading in the final quarter. 

Numis said: ‘This will see us expand our capital markets reach to non-UK issuers; expand our leading equities platform to European institutional investors looking to gain exposure to UK equities; and further capitalise on working with high-growth private companies looking for growth capital.’ 

The company said its performance continued to be in line with market forecasts for the full year. 

Numis shares were up 4.15 per cent or 10.38p to 260.38p this afternoon. The group’s share price has fallen by nearly 30 per cent in the last year. 

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