(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 capitalize on the ongoing trends toward 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.
Shares in ICAP, to be renamed NEX Group Plc after the deal with Tullett is completed, were up 2.38 percent at 425.6 pence at 0758 GMT on the London Stock Exchange.
Reporting by Noor Zainab Hussain in Bengaluru; Editing by Sunil Nair and Anupama Dwivedi