New high for FTSE 100 but Nex's Michael Spencer smells trouble

The FTSE 100 hit fresh highs on Monday, but City trading legend Michael Spencer warned that markets are complacent.

As his Nex Group reported an 18% jump in revenues to £543 million Spencer said quantitative easing has “rendered the market soporific”, with traders believing that central bankers will always be there to put out any fires.

“A lot of things suggest a presumption that everything is okay would be misplaced,” he said. “We have had eight years of a bull market. That’s not unprecedented, but it is very long.”

As he was talking the FTSE rose 16.98 points to 7452.37, with mining shares enjoying most of the gains.

While Nex, the business that came out of Icap when it sold its voice-broking arm to Tullett Prebon, is on the up, there is a clear slowdown in the City since the start of the year.

Nex made profit for the year of £114 million, up £4 million. The dividend is held at 38.5p.

But in its outlook statement to investors Nex warned that “trading activity since the start of the year remains low despite sporadic activity around political events”.

An expectation of rising US interest rates has boosted trading in Treasury bonds, offsetting weakness in foreign exchange deals.

NEX shares slipped 2p to 597p.

There is some City gossip that the firm could be a takeover target for either the London Stock Exchange or the Deutsche Börse.