ICAP wins $65m Chinese contract

ICAP has won a $65m contract to provide technology for China's fixed income and foreign exchange trading system through EBS BrokerTec. The deal is set to expand ICAP into the Chinese market with a new Shanghai office, while becoming more integrated into global financial markets. Numis analysts have noted ICAP as ideally positioned to capitalise on the Chinese market, while having the potential to become an acquisition target, following the sale of its hybrid voice broking division.

ICAP bags $65 mln tech deal for China's forex trading system

June 3 (Reuters) - ICAP Plc said it won a contract to provide technology for China's main fixed income and foreign exchange trading system, giving the British broker a major break in the world's second-largest economy.

ICAP, which last year agreed to merge its global hybrid voice broking business with Tullett Prebon Plc, said its electronic foreign exchange and fixed income business - EBS BrokerTec - would provide technology to China Foreign Exchange Trade System (CFETS).

The deal, valued at $65 million over a three-year period, would see ICAP expanding into China just as the country is becoming more integrated into global financial markets.

EBS BrokerTec will set up an office in Shanghai, the company said.

ICAP Chief Executive Michael Spencer said in a statement on Friday that China was an "extremely important" financial market.

CFETS and ICAP already have a broking services joint venture which was formed in 2007.

Numis analysts said in a note that ICAP was ideally positioned to capitalise on the ongoing trends towards electronic trading and central clearing that are being driven by regulatory changes.

"This is unlikely to go unnoticed by other financial infrastructure companies in our view and we would not be surprised if it became an acquisition target once the sale of the hybrid voice broking division completes," the analysts said.