CMC Markets battles mixed trading in third quarter

26th Jan 2017 08:41

(ShareCast News) - Although trading activity improved at CMC Markets in the third quarter, revenue per client was lower and the spread betting and CFD provider continues to endure anxiety over a regulatory crackdown proposed late last year in the UK and several other key markets.In the period from 1 October to 31 December, the FTSE 250 company enjoyed a 13% rise in active clients numbers year-on-year to 41,234 but a fall of the same degree in revenue per client.Net operating income for the period in-line with the same period last year and, while CMC cannot tell whether the recent uplift in client activity will be sustained for the rest of the financial year, it has kept operating costs well controlled and in-line with guidance.All this almost pales into insignificance in comparison with the measures announced by the Financial Conduct Authority to clamp down on leveraged trading, as proposed in a consultation paper on 6 December."The regulatory changes that will be implemented later in the year will undoubtedly present the group with some short- to medium-term challenges as clients and the industry adjust," said chief executive Peter Cruddas, though it remains difficult for CMC, like rival IG, to accurately quantify the likely impact on client behaviour, particularly as the final terms and timings of any changes are not yet finalised.Like IG, which has already launched a limited risk account that carries an absolute guarantee that client can lose no more than their deposit, CMC said it will be "evolving our product offer to limit clients' downside risk with the launch of a limited risk account and continue to offer our guaranteed stop loss order".CMC shares fell 12% in early trade but by 0930 GMT were down just 1.6% to 112.17p, less than half the 240p at which they were floated last February.