ICAP profit growth beats forecasts

By Daisy Ku

LONDON (Reuters) - ICAP IAP.L, the world's biggest interdealer broker, beat forecasts with a 31 percent rise in annual pretax profit driven by market volatility, but its shares fell over 6 percent as the firm said it was eyeing acquisitions.

ICAP, which offers voice and electronic broking services on rates, currencies and equities takes a cut on every trade made through its systems amid booming trading volumes.

It has been seen as a takeover target this year as the world's exchanges jostle for position in an increasingly competitive market, but Chief Executive Officer Michael Spencer flagged the group's own takeover ambitions.

"Those comments (on acquisitions), are deliberately placed to quell any speculative interest that ICAP might be about to sell itself. This may lead to some disappointment and profit taking today," said Citi analyst Daniel Garrod.

Last week, the Daily Telegraph reported renewed rumours that U.S. derivatives bourse Intercontinental Exchange (ICE) was interested in ICAP.

"The current environment offers many attractive opportunities to acquire businesses," CEO Spencer said, although he added that his acquisition plans did not extend to any of the other top four interdealer brokers.

SHARES OFF HIGHS

Shares in ICAP dropped 6.7 percent to 625p at 2:08 p.m..