CMC Markets Active Clients Grow 13% YoY, No Brexit Disruption Expected

CMC Markets has released an interim management statement to highlight some operational metrics in Q2.

Online multi-asset trading brokerage CMC Markets plc (LON:CMCX) has just released an interim management statement on the company’s operational progress in the second quarter of 2016. The firm has highlighted in its announcement that the performance of the firm is currently in accordance with the expectations of active clients growing by 13 per cent when compared to a year ago.

While client numbers are growing, CMC Markets states that the value of client trades has been lower during the quarter with the run-up to the U.K. referendum damaging investor sentiment. With increased uncertainty a number of traders have chosen to take a wait and see approach therefore reflecting on broad trading activity.

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The company has not incurred any losses during the Brexit turmoil and does not anticipate that the event will result in any material challenges to the business operations of CMC Markets.

The company highlights that the costs associated with a restructuring of operations in order to continue servicing European clients would not be material. The firm is not explicitly stating whether there will be need for such a restructuring as cross-border passporting is for the time being unchanged.

While the cost base for CMC Markets is likely to be negligible considering the size of the capital base of the firm, smaller companies in the industry could be affected much more. CMC Markets expects to maintain its headquarters in London regardless of the Brexit.

CMC Markets Operational Highlights

The company states that it is continuing to make progress across a broad spectrum of growth pillars that it has previously set out. The German and Australian markets have remained robust for CMC Markets with recent regional surveys underpinning the position of the brokerage in these markets.

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The Australian business of the brokerage has seen the firm holding the largest share of high value clients, where CMC Markets holds a 30 per cent market share.

Looking beyond the strongholds, the company highlights that its business in Austria and Poland is in line with expectations, while France and Italy are seeing improvements.

The company has also successfully launched its binary options offering across international markets excluding Singapore and Canada. The company plans to expand the range of instruments offered in the coming months.

Last quarter, CMC Markets also launched its institutional offering which is already seeing some demand and has been receiving positive feedback from clients.

The Chief Executive Officer of CMC Markets, Peter Cruddas, commented on the quarter: ”The Group continues to make progress on its five pillars for growth and we continue to attract high-quality clients through our focus on retention, service and technology.”

“In line with the wider market, volumes were lower leading into the EU referendum as clients traded in smaller sizes. However, clients trade volumes have subsequently increased and improvements in underlying client metrics are very positive. Our full binary launch has been a success and I am very excited about the pipeline of new products. This has been a solid quarter building on the successful listing in February 2016,” Cruddas elaborated.

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