Voice brokers

Very interesting comment from ICE CEO (one of the industry's most dynamic and respected figures). ICE is about to roll out a clearing solution for the CDS space, which will lead to greater standardization and electronicfication of trade execution. However Sprecher believes there will be a strong role for the voice brokers:

"I also think that the voice broker business as a whole, that surrounds the CDS business, will do well. I think that is a view that may not be shared looking at the stock prices of some of the pure CDS brokerage companies. But I think that what you will see is a need for voice brokered structuring, and options, and other things, just like you have around the standardized energy business"

Now the leading voice broker (for CDS) GFIG is currently trading at 3.5X EPS (no bberg yet so this may be stale), at $3.11/share (was as low as $2.60 at one stage on friday). If Sprecher is correct, and bear in mind ICE is an exchange (though it does own Creditex), then GFIG is crazy cheap. I have favored IAP.LN because of its greater product diversity, and stronger electronic platforms. However, GFIG is also worth taking a look at. Hopefully will have a chance to do work on that name as well. I have the GFIG transcript, so will take a look.