Publicly traded retail brokers have turned the page as industry executives strike an upbeat tone
It’s been six months since the brokerage industry faced the doldrums of the new ESMA regulations in the EU. As largely expected, the industry got hit hard, primarily due to rising acquisition costs and a sharp decline in trading volumes.
After a brief period of shock and downgrades in the outlook for major brokerages, the market appears to have fully discounted the impact from the new ESMA regulations as of the beginning of December.
Around that time, the industry got the news from the FCA that European regulators intend to make the temporary product intervention measures permanent. The uncertainty which dominated the market was finally gone, and brokers accepted the new status quo in the EU market.
Publicly Traded Brokers
Today’s market open in London brought a rally to the sector. As June Felix bought a second batch of 17,000 shares worth around £100,000, investors interpreted the move as a signal of returning confidence.
The notion that the worst is now behind us was reinforced in conversations with multiple executives from the industry sharing their views on the impact of ESMA’s measures. Most companies appear to have adapted to the new environment in one way or another.
Publicly-traded brokers who do not have the flexibility that smaller market players do have adopted their own approach to the market. Turning retail clients into professional is one of the themes which mitigated the impact from ESMA’s new regulatory move last year.
Examining the year-on-year performance of publicly-traded brokers, we identify one outlier: Plus500. The company’s extraordinary run into the crypto space last year managed to keep it well bid even throughout the low Volatility of 2018.
Bottoming Out… for Now
The final months of the year and a tumultuous equities market in the final quarter caused the firm to upgrade its guidance for the second half. As a result, shares of the company traded about 35 percent higher year-on-year.
CMC Markets is at the bottom when it comes to raw share price performance. The company’s stock is trading lower by 25 percent when compared to last February. IG Group’s performance is a touch better as it trades lower by 18 percent over the same period of time. GAIN Capital’s buyback program stabilized the firm’s shares as it traded only 8.5 percent lower when compared to a year ago.
The common denominator for all companies, however, is that they are all trading higher than in the final months of 2018. Looking at the companies’ year-to-date performance, all publicly-traded brokers are performing steadily.
CMC is up 13.7 percent in 2019, followed by Plus500 at 12.8% and IG Group at 12.1%. GAIN Capital’s performance YTD is slightly weaker as the company’s shares rallied only 7.8% so far.
In tandem with rising acquisition costs in Europe, firms have also doubled down on their efforts to attract clients from outside of the EU. While publicly-traded companies have focused on regulated markets, other market players have adopted a more flexible approach.
Offshore Branches and Brands
A number of companies from the industry have chosen different diversification tactics to mitigate the impact. While publicly-traded brokers have strictly focused on regulated markets, other companies took advantage of regulatory arbitrage opportunities.
Some companies opened offshore branches, while others started new brands for their subsidiaries located in remote island areas. Companies holding Australian licenses capitalized in a big way, while smaller firms turned to island jurisdictions like The Bahamas, Vanuatu, and Seychelles.
Despite card deposit difficulties, the new subsidiaries found different ways to process deposits and withdrawals. This part of the industry appears to have moved away from jurisdictions like Cyprus and even the FCA to open subsidiaries that can remain competitive in the current market.
It’s been six months since the brokerage industry faced the doldrums of the new ESMA regulations in the EU. As largely expected, the industry got hit hard, primarily due to rising acquisition costs and a sharp decline in trading volumes.
After a brief period of shock and downgrades in the outlook for major brokerages, the market appears to have fully discounted the impact from the new ESMA regulations as of the beginning of December.
Around that time, the industry got the news from the FCA that European regulators intend to make the temporary product intervention measures permanent. The uncertainty which dominated the market was finally gone, and brokers accepted the new status quo in the EU market.
Publicly Traded Brokers
Today’s market open in London brought a rally to the sector. As June Felix bought a second batch of 17,000 shares worth around £100,000, investors interpreted the move as a signal of returning confidence.
The notion that the worst is now behind us was reinforced in conversations with multiple executives from the industry sharing their views on the impact of ESMA’s measures. Most companies appear to have adapted to the new environment in one way or another.
Publicly-traded brokers who do not have the flexibility that smaller market players do have adopted their own approach to the market. Turning retail clients into professional is one of the themes which mitigated the impact from ESMA’s new regulatory move last year.
Examining the year-on-year performance of publicly-traded brokers, we identify one outlier: Plus500. The company’s extraordinary run into the crypto space last year managed to keep it well bid even throughout the low Volatility of 2018.
Bottoming Out… for Now
The final months of the year and a tumultuous equities market in the final quarter caused the firm to upgrade its guidance for the second half. As a result, shares of the company traded about 35 percent higher year-on-year.
CMC Markets is at the bottom when it comes to raw share price performance. The company’s stock is trading lower by 25 percent when compared to last February. IG Group’s performance is a touch better as it trades lower by 18 percent over the same period of time. GAIN Capital’s buyback program stabilized the firm’s shares as it traded only 8.5 percent lower when compared to a year ago.
The common denominator for all companies, however, is that they are all trading higher than in the final months of 2018. Looking at the companies’ year-to-date performance, all publicly-traded brokers are performing steadily.
CMC is up 13.7 percent in 2019, followed by Plus500 at 12.8% and IG Group at 12.1%. GAIN Capital’s performance YTD is slightly weaker as the company’s shares rallied only 7.8% so far.
In tandem with rising acquisition costs in Europe, firms have also doubled down on their efforts to attract clients from outside of the EU. While publicly-traded companies have focused on regulated markets, other market players have adopted a more flexible approach.
Offshore Branches and Brands
A number of companies from the industry have chosen different diversification tactics to mitigate the impact. While publicly-traded brokers have strictly focused on regulated markets, other companies took advantage of regulatory arbitrage opportunities.
Some companies opened offshore branches, while others started new brands for their subsidiaries located in remote island areas. Companies holding Australian licenses capitalized in a big way, while smaller firms turned to island jurisdictions like The Bahamas, Vanuatu, and Seychelles.
Despite card deposit difficulties, the new subsidiaries found different ways to process deposits and withdrawals. This part of the industry appears to have moved away from jurisdictions like Cyprus and even the FCA to open subsidiaries that can remain competitive in the current market.
Cheetah Fund Investors Lose $9 Million in Alleged Fraudulent Scheme
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
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Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
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Sandton Convention Center, Sandton, South Africa
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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