CMC Markets Gains Following Trading Update – Here’s Why

CMC Markets (LON: CMCX) issued its trading update on Thursday doe the six months ended September 30, stating it expects first-half profits to be up 21%, aided by a pickup in market volatility and client trading volumes. The news is a welcome boost for shareholders after brokerage firms were previously impacted by the overall market decline.

CMC Markets shares gained 5.39% following the update.

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The financial service firm expects net operating income to be approximately £153 million, up from £127 million in the prior year. The company stated that underlying market activity improvement through August and September underpinned the progress in this period.

Client leveraged AUM finished at £530 million, remaining at elevated levels but slightly below the historical period-end record of £560 million.

Furthermore, the first-half leveraged net trading revenue is expected to be approximately £128 million, a 27% increase year-on-year. However, non-leveraged net trading revenue is forecasted to drop 14% to roughly £21 million.

The group also launched its new UK investment platform, CMC Invest, to support customers through their investment journey.

Chief Executive Officer Lord Cruddas stated CMC Invest “marks a significant milestone for us, representing a major opportunity for growth and diversification into the non-leveraged market.”

Cruddas continued: “While it is still in its initial stages of development, as we plan to add further functionality over the coming months, our goal is to provide unrivalled market access to investors through the best technology and lower transactional costs and fees.”

The firm believes its planned new business expansion will grow its net operating income by 30% over the next three years.

The group's results for the six months ended September 30, 2022, will be announced on November 16, 2022.