One to Watch: Icap still expanding

ICAP is the world's largest inter-dealer broker. The company covers a range of over-the-counter financial products and services in commodities, foreign exchange, interest rate, credit and equity markets, as well as data commentary and indices.

The company's business is organised across three divisions – voice broking, electronic broking and information, with voice brokers playing an important role in markets which are less liquid and where the brokers work with their customers to match buyers and sellers. Icap's average daily transaction volume exceeds $2.3 trillion (1.5tn).

The company is continuing to expand through acquisition, buying Link Asset and Securities in 2008 to develop its presence in equity derivatives trading, while more recently confirming the purchase of the outstanding share capital of TriOptima, a post-trade service concern.

The recent trading statement triggered a near 20 per cent sell-off in Icap's share price on concerns about volatility and the disappointing contributions from some of the group's newer initiatives. Subsequently, a "broad-ranging strategic review of some of its cash equities businesses" has been announced. The founder, Michael Spencer, has also confirmed that he will stand down as treasurer of the Tory party to concentrate on his business creation. Icap's shares, peaking in 2007 at around 750p, were then savaged by the subsequent bear market but had recovered strongly until this latest correction. They are always going to be a fairly volatile counter, their prospects conditioned – to some extent at least – by levels of international market activity. The recent sell-off has meant the shares now yield more than 5 per cent.

The value of your investment could fall and you may get back less than you invested. You should take professional advice if you have any doubt about the suitability of this company for your portfolio.

Serco

520.5p -3.5p

Broker says BUY

THERE are "significant opportunities" for outsourcers as governments move to cut costs from the public sector, according to Canaccord Adams.

Serco could be the "main beneficiary of international public-sector challenges", the broker said, noting the significance of this year's UK general election.

ITV

53.95p +0.25p

Broker says ADD

AHEAD of ITV's preliminary results, Numis carries an "add" rating on the broadcaster.

Numis said: "ITV was our pick of the 'death or glory' recovery plays last year, but the combination of strong share price performance and uncertainty over strategic direction lead us to rate the shares an 'add'."