In the rather small space of the initial public offering (IPO) stage in the foreign exchange industry, the rumors about a number of new listings have frequently been dismissed as unrealistic. However when it comes to CMC Markets, there is an almost universal consensus amongst industry peers that this is the most likely candidate for an IPO in the coming quarters.
Speaking to Finance Magnates, the Financial Director of CMC Markets, Grant Foley, has confirmed that the London-headquartered brokerage is looking at a listing on the London Stock Exchange. The company has also appointed two new non-executive directors who are subject to an approval procedure by the U.K. Financial Conduct Authority – Manjit Wolstenholme and Malcolm McCaig.
While no valuation details have been provided, according to estimates made by Finance Magnates the CMC Markets IPO listing could actually surpass the £1 billion estimates previously reported by the media. Our calculations show that the figure could be just south of £1.1 billion provided that the equity markets are stable.
CMC Markets is considering an IPO on the London market and we have engaged advisors
“CMC Markets is considering an IPO on the London market and we have engaged advisors to work with us towards achieving that aim. In addition we have been implementing some changes to our board, which are designed to help the process. Recently, we have appointed two new non-executive directors,” Mr. Foley said.
Elaborating on the timing of the IPO move, Mr Foley said, “I can’t be any more specific than saying that we are working with our advisors on a potential listing. Still, that is contingent on a number of factors and we will move in that direction when the time is right.”
This is the time to mention that CMC Markets was previously very close to a listing back in 2006, but it decided to withdraw after the FTSE 250 index slumped in the run up to the financial crisis in May of the same year. Volatility has always been a factor for IPOs and the current market environment caused by the effects from a prospective Federal Reserve rate hike is unpredictable.
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After this move the total number of non-executive directors on the board of CMC Markets is 4, including the chairman of the board. In addition, the company has 3 executive directors, making it well placed to become a publicly traded company.
Manjit Wolstenholme has been serving as non-executive chairman of Provident Financial Group, while Malcolm McCaig , a former partner and non-executive director at LCG, is currently on the board of Tradition UK, One Savings Bank and QBE Insurance.
The latest batch of official results from CMC Markets has confirmed that the company is looking strong with new clients, trading volumes, revenues and profits with all figures picking up materially throughout the past year. However, as is always the case with the stock market, timing is crucial and the company is carefully measuring its steps before going public.
Asked about the reasons for the company’s success, Mr. Foley explained, “Our growth strategy is a combination of some key components – a great product, a great platform, and good client service with targeted efforts on marketing and our brand.”
The mix of these factors resulted in the improved financial results reported by the company a couple of weeks ago.
Speaking of the development of the trading platform, the CFO of CMC Markets added, “We have over 10,000 financial instruments and have delivered some substantial functionality improvements, including the introduction of guaranteed stop loss orders.”
Depending on market conditions, we could see the IPO of CMC Markets on the London market within the next twelve months.