GMP Capital posts loss, hurt by market volatility
(Reuters) - GMP Capital Inc (GMP.TO: Quote) reported a third-quarter loss on Friday as volatile markets hurt the Canadian independent investment dealer's capital markets business for a second consecutive quarter.
GMP, which was founded in 1995 and quickly became one of Canada's most successful independent investment dealers, posted a third-quarter loss of C$4.6 million, or 9 Canadian cents a share, compared with net profit of C$23.1 million, or 32 Canadian cents, in the same year-ago period.
That followed a 79 percent drop in quarterly profit in the second quarter, when it was also hit with lower levels of underwriting activity and reduced institutional trading volumes.
"Heightened equity market volatility together with declining global equity market valuations and lower investor confidence resulted in weaker investment banking revenue, unrealized losses in principal activities and reduced trading volumes," said GMP Chief Executive Harris Fricker.
Fricker said the company remained fundamentally strong, able to weather financial turbulence and positioned to benefit when markets return to more normal levels of activity.
GMP revenue fell in the third quarter by more than half compared to the same period last year, to C$46.3 million from C$102.8 million.
At its capital markets division, which has powered profits in previous quarters, revenue dropped 59 percent to C$37.9 million on losses in investment banking revenue.
Shares of the company closed at C$7.05 on Thursday on the Toronto Stock Exchange.
($1 = 1.013 Canadian Dollars)
(Reporting by Ankur Banerjee in Bangalore and Pav Jordan in Toronto; Editing by Frank McGurty)
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