Australia 'in economic class of its own'

Australia is in a class of its own relative to all other nations in the global
economy whose capital markets are in for a "rocky road" in 2010, according to
IGMarkets' global chief executive Tim Howkins.
The head of the global contracts-for-difference (CFD) provider questions the idea
that Australia's fortune is tied to emerging markets and says Australia's economic
growth rate and interest rate hikes make it an isolated case.
"You're on a different cycle to the western world and equally I'm not sure how
correlated you are to the emerging markets," he said in an interview during a
three-day visit to Australia.
"I think you're kind of out on your own."
Volatility will be a hallmark of financial markets in 2010 and the European Union
will almost certainly have to bail out Greece, he added.
"Generally around the world maybe we're through the worst of it but I think it is
going to be a fairly rocky year," he told AAP in an interview.
"I think there will be a lot of speculative activity around different countries and
different chunks of sovereign debt".
Another market correction could be on the cards, he added.
IGMarkets' revenue benefits from volatile markets with CFD traders flocking to the
London-based company at the height of the credit crisis.
"The best week we ever had for account opening was the second week of October 2008
when the front page of every newspaper that week was plastered with financial
markets," Mr Howkins said.
A CFD is an agreement to exchange the difference in value of a particular asset
between the time at which a contract is opened and the time at which it is closed.
In Australia, the market is growing rapidly and IGMarkets' revenue grew by over 40
per cent in 2009.
"I'd like to think we could do 30 to 40 per cent again this year but clearly that
depends on what happens in the market," Mr Howkins said.
IGMarkets has around 100,000 clients and 830 employees worldwide, and operations in
10 countries.
It will open a representative office in Beijing in two weeks, mainly as a facility
from which to lobby regulators to allow business to be transacted with clients
directly.
Mr Howkins says regulatory change may take four years but the market is so big it is
worth the initial cost.
Recent moves by China to allow margin trading on shares and short selling are
encouraging, he said.