Spread betting group IG has drawn attention to possible restrictions in Japan relating to one of its key products, contracts for difference, and, no surprise, its shares have reacted badly.
IG is down 6.8p at the moment at 331.9p. Apparently the Financial Services Agency in Japan has announced a public consultation on proposals to limit leverage on CFDs to five times for shares, ten times for equity indices and 50 times for bonds. IG said it would lobby the FSA directly and through industry channels during the consultation, which ends on 16 November. Any restrictions would come into force a year later. Panmure Gordon said:
In itself, this news is not material for numbers, affecting only a very small part of the overall business. But it is likely to weigh on sentiment and puts in question the long-term prospects of the Japanese business. Our target price moves from 400p to 385p.
