Plus500 Trades at New All-Time Record High as Board Boosts Guidance

The brokerage is valued circa £2 billion pounds, despite ESMA headwinds

Shares of Plus500 traded higher over 6 percent after the company posted an upbeat trading update. The firm’s board of directors has expressed confidence in the outlook and has effectively dismissed any concerns related to the coming implementation of new leverage rules starting from the beginning of July. 

The company, which is providing forex and CFDs trading services to clients worldwide, has expressed confidence that the financial performance of Plus500 for calendar 2018 will be materially stronger than previously expected.

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Plus500’s stock is trading at all-time highs above 1700 pence, valuing the brokerage at £1.94 billion ($2.6 billion). The current valuation of the Israeli brokerage company is materially different to its London-listed peers IG Group and CMC Markets. Despite the regulatory headwinds, Plus500 remains confident that it will be able to continue growing its business under the new ESMA rules.

High Volatility

The rise of market volatility over the past couple of quarters gave the firm a strong start to the financial year. Plus500 also noted increased activity in cryptocurrency trading CFDs. The decline of cryptocurrencies does not appear to be materially affecting the firm. Retail clients have been heavily exposed on the long side of cryptos in January and February, so the decline must have contributed to solid gains on the market making side of crypto CFDs.

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Plus500’s board of directors expressed its views that market volatility and cryptocurrency popularity have both attracted more new client signups which contributed to the record trading activity seen in the first quarter of 2018. The management also highlighted that while the second quarter is closer to the mean, it is still way ahead of the expectations of the brokerage.

Plus500 maintains some caution over the new ESMA measures which are set to become enforceable on the 1st of August 2018.

“The performance of Plus500 could be impacted by the rate at which customers request to be reclassified, and are accepted, as elective professional clients. The Board will assess the impact of the ESMA measures on current and future years’ performance once the ESMA measures are fully operational and will make further announcements as appropriate,” the company shared in a statement.

The CEO of Plus500, Asaf Elimelech, said: “We are pleased with the continued strong financial performance made despite market conditions returning to more normal levels during this period. We remain confident about the future prospects for the Company.”

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