FTSE 250-listed IG Group Holdings, the power behind CFD provider IG Markets has announced its acquisition of South African (CFD) company, IdealCFD Financial Services. The South African operation will be known as IG Markets South Africa and James Bishop, formerly boss of Ideal CFDs will now become the CEO of IG Markets South Africa.
Commenting on the acquisition, IG Group’s London-based Chief Executive Officer Tim Howkins said: “Our partnership with James Bishop and the IdealCFDs team stems four years back when the group started supplying IdealCFDs with a white-labelled service.
Currently IdealCFDs has about 2 000 clients in South Africa, of whom about 1200 are active traders, generating about R3m of revenue – and this has been achieved with very limited advertising spend.
‘IG Group’s acquisition of this venture is the logical next step in our relationship and will enable local clients to benefit from our robust trading systems, global reach and our commitment to the innovative technology which allows us to keep our costs low.’
CFDs are versatile financial trading products. They are essentially an an agreement between a buyer and a seller stipulating that the seller will pay the buyer the difference between the current value of a share and its value when the contract is made. If the difference turns out to be negative, the buyer pays the seller. The purpose of a CFD is to allow investors to speculate on the movement of the price of the underlying stock without having to own the shares. Presently, IdealCFDs offers contracts for difference on approximately 130 local shares.
IG Markets South Africa CEO James Bishop stated that IdealCFDs has a long and successful track record in South Africa. ‘We look to grow from strength to strength. The arrival of IG Markets in South Africa is a significant step, bringing additional credibility, security and international best practice to the South African CFD market.’