BGC Partners CEO Sees "Much Better" 2010 Revenue- The Wall Street Journal

U.S. inter-dealer broker BGC Partners Inc (BGCP) said Wednesday it expects "much better" revenue this year, helped by expected record sales in the first quarter, and said it will pursue its overseas growth strategy after being granted a license to start trading operations in China in May.

Chairman and Chief Executive Officer Howard Lutnick told Dow Jones Newswires that 2010 revenue will be "much better" than in 2009. "We're starting out the first quarter at plus 19%-26%, so that helps. It's not much of a stretch for us...The first quarter is always a good guide to our full-year results," he said.

New York-headquartered BGC late Tuesday posted a 5.2% fall in full-year non-GAAP revenue to $1.17 billion. On a GAAP basis, 2009 revenue fell 5.4% to $1.16 billion.

But with a recent pickup in global bond issuances, BGC saw fourth-quarter non-GAAP revenue rise 4% to $299.8 million.

"Our strong position in rates benefit from the substantial issuance in global government bonds. The U.S. deficit of $1.5 trillion plus the refinancing of current outstanding U.S. deficit makes for an enormous issuance by the U.S. Treasury. Therefore, our rates business is rising very nicely," Lutnick said.

"You have the same near-exact conceptual story in Europe, nearly everywhere else in the world, so the opportunity for our rates business is extraordinary," he said.

BGC provides voice and electronic broking services to traders in a variety of financial instruments, including interest rates, credit derivatives, foreign exchange and equity derivatives.

Lutnick said the company's credit business will also benefit as customers seek credit protection from any fallout resulting from, for example, the Greek and Spanish government's fiscal problems.

BGC President Shaun Lynn said the company is trying to grow its portfolio of services and its physical reach around the world.

"We're looking to cash equities, which we're growing quite aggressively. We're looking at energy. You've seen us acquire Liquidez in Brazil...We just opened an office in Moscow and we continue to grow across the globe and look for centers which are going to give the best returns without overextending ourselves geographically," Lynn said.

Lynn said BGC has been awarded a license to trade in Beijing from May. Some staff in Hong Kong are preparing to move to the Beijing office, which will have dozens of employees in future.

He said the company is looking at possibly expanding into Abu Dhabi, Dubai or other markets.

The company declined to comment on a legal dispute with rival Tullett Prebon PLC (TLPR.LN). In November, Tullett said it was taking legal action against BGC following an alleged "raid" on its staff that led to the resignation of 81 brokers in North America. The brokers generated around 7.5% of Tullett's group revenue, reports said.

Lutnick said the 81 staff have already joined BGC.

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