Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

CMC Markets cuts CFD and spreadbet revenue target, shares fall 20 percent

Published 22/02/2019, 16:03
Updated 22/02/2019, 16:05
© Reuters.  CMC Markets cuts CFD and spreadbet revenue target, shares fall 20 percent

© Reuters. CMC Markets cuts CFD and spreadbet revenue target, shares fall 20 percent

(Reuters) - Online trading platform CMC Markets Plc on Friday forecast a bigger fall in fourth-quarter revenue for the unit that offers complex financial products to retail clients in the face of tighter rules by European regulators.

The statement came just hours after Britain's Financial Conduct Authority said the European Securities and Markets Authority's temporary curbs on contracts-for-difference (CFD) will become part of the UK domestic law when it leaves the EU on March 29.

CFDs give investors exposure to price movements in securities without owning the underlying asset.

CMC expects its quarterly CFD and spreadbet revenue to fall 25-35 percent compared with a prior forecast of a 20 percent drop, it said in an unscheduled trading update on Friday.

Shares of CMC touched a two-year low, falling over 20 percent to 93.2 pence by 1457 GMT after the company called the first two of 2019 "challenging". Rivals IG Group Holdings (LON:IGG) and Plus500 (LON:PLUSP) Ltd were also down more than 6 percent.

"This is a period of adjustment for CMC and the industry following the implementation of the ESMA rules," said CMC Chief Executive Officer Peter Cruddas in a statement.

CMC's revenue warning was in stark contrast to its third-quarter trading update last month when it said U.S.-China trade tensions had boosted client activity on its online trade platform.

Plus500 had said last week that a drafting error in its 2017 report resulted in the company failing to disclose some losses from customer trading, which raised concerns over the state of affairs of online trading platforms.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.