BREAKING NEWS
This content is not available in your region

CMC Markets warns on profit as finance chief plans exit

CMC Markets warns on profit as finance chief plans exit
FILE PHOTO: Dealers work at their desks at CMC Markets in London, Britain, January 30, 2019. REUTERS/Dylan Martinez   -   Copyright  DYLAN MARTINEZ(Reuters)
Text size Aa Aa

(Reuters) – Online trading firm CMC Markets Plc on Wednesday forecast a plunge in net operating income for fiscal 2019 as new rules curbed client trading activity, and said its chief financial officer is leaving the company.

CMC, along with its rivals IG Group and Plus500 Ltd, has been under more scrutiny as regulators tighten rules on products that allow anyone with a bank card to make highly-leveraged bets on financial markets through apps and online platforms.

CMC Markets said it expected net operating income of 131 million pounds for the year ended March 31, compared with 187.1 million pounds ($245.91 million) last year.

It also forecast a 37 percent drop in revenue to 110 million pounds for the unit that offers complex financial products to retail clients.

Separately, the company said its chief operating and financial officer Grant Foley would leave the company to pursue other opportunities. CMC said it would consider internal and external candidates to replace him.

Its larger peer IG saw its shares slump last month after reporting a 29.4 percent drop in quarterly net trading revenue that it blamed on “persistently” lower market activity.

CMC said the new rules imposed by European regulators had led to retail clients trading less, using more of their cash to fund their margin needs or needing to deposit more funds with CMC to trade at previous levels.

But CMC said the impact is showing “signs of stabilising.”

Britain’s financial watchdog last week said it will permanently ban the sale of complex derivative products to retail customers to protect them from large and unexpected trading losses.

CMC shares lagged both the Plus500 and IG last year, declining 30 percent, and were seen losing another 3-10 percent at the opening bell on Wednesday.

(Reporting by Muvija M and Noor Zainab Hussain in Bengaluru; Editing by Arun Koyyur, Bernard Orr)

euronews provides breaking news articles from reuters as a service to its readers, but does not edit the articles it publishes. Articles appear on euronews.com for a limited time.