CMC Markets flags profit jump amid Covid-19 stock volatility
Online trading platform CMC Markets today predicted that its full year profit would beat market forecasts amid higher customer trading due to the Covid-19 coronavirus outbreak.
Net operating income for the year to the end of March is set to beat the current estimate of £199m to £202.3m.
“I am delighted that CMC’s strategy of targeting and retaining higher valued clients and our diversifying revenue base, alongside our ongoing success in retaining a higher percentage of client income, has continued to yield positive underlying performance throughout the second half of the year,” chief executive Peter Cruddas said.
CMC has previously forecast profit before tax to land somewhere in the range of £46.9m to £56.7m.
CMC Markets’ rival Plus500 last week said it also saw a boost from the coronavirus chaos. Trading activity surged over its first quarter of 2020 in response to the coronavirus crisis as traders bet on stocks’ performance.
The rapid spread of the Covid-19 virus outside of China last week wiped £200bn off the FTSE 100, and saw US and UK stocks suffer their worst week since the 2008 financial crisis.
CMC said net operating income rose 45 per cent for the six months to the end of September, when it hit £102.3m. And the spreadbetter today said performance “has continued to maintain momentum throughout Q4 2020”.
Stocks continued to be volatile yesterday as an OECD warning that the Covid-19 outbreak would halve global growth dented the FTSE 100’s recovery.
Meanwhile, US stocks surged as traders looked ahead to an expected Federal Reserve interest rate cut.
Central banks across the world have said they are monitoring the Covid-19 outbreak and are ready to take action.