Retail brokers have been largely underperforming the broad stock market throughout 2018
With the results from the new regulations in Europe becoming more or less clear, the value of retail brokerage companies has been declining steadily. As of December, the only companies which haven’t registered a dramatic decline are those which are buying back their own stock.
Plus500 and GAIN Capital have been maintaining an effective floor for their shares’ value over the past several months. The year has been quite a tumultuous one for shareholders of publicly listed retail brokers.
After the regulatory framework was ignored by the market until about the day when it took effect, the decline in the shares of GAIN Capital, CMC Markets, IG Group and Plus500 serves only to prove that markets are always acting in the least expected way.
Regulatory Issues and Market Trends
The regulatory issues plaguing the retail Forex and CFDs trading industry have been the main fundamental development since December 2016. Around the time of the first hint by the FCA about the severity of the measures discussed at a pan-European level, shares of all publicly-listed brokers tanked materially.
What happened on the stock market in the aftermath, was largely a result from the failure on behalf of some firms to communicate to their investor base about the impact that the changes will have on the business.
While some companies have done an incredibly good job and have even been warning markets about being too optimistic about their prospects, others have painted a picture which turned out to be rosier than many wished.
Plus500 and GAIN Capital Buybacks
Both Plus500 and GAIN Capital chose to provide a cushion to the blow and committed to buying back stock. The effort has helped to prop up shares of the companies so far. Some old-times investors in Plus500, like Crispin Odey, are once again holding a more significant interest in the stock.
After the sale of its GTX business, GAIN Capital provided $50mln worth of Liquidity for investors to exit their positions. After the announcement, the company’s stock stabilized between $7 and $8 per share.
CMC Markets and IG Group Hit New Lows
As the diversification effort for both CMC Markets and IG Group gets on its way, so might the value of the shares of the companies which have been punished lately. The reports from IG that the company lost close to 20% of revenues from the EU and the UK caused another leg lower this week.
Both firms have been impacted heavier than expected. The focus on higher net worth clients and the shifting focus to professional clients has been a universal attempt on part of the industry to mitigate the impact of the new regulations. The impact to attracting new clients, however, has been felt the hardest as new client acquisition costs increased dramatically.
Looking Beyond Standard Solutions
Publicly listed and private retail brokers have been looking for ways to mitigate the impact of the new regulations in several areas. Geographical diversification has played a role and will continue to be the dominant factor, however, increased changes to the product mix are not out of the question.
The value of mobile apps that are bringing in traffic has become increasingly more important for firms. With the competition from several smaller companies, the majors in this industry are facing yet another challenge to prove themselves.
The End of Uncertainty
The first full week of December saw one last missing element from any analysis of FX and CFDs broker shares. The FCA announced that it is proposing that the temporary measures on FX and CFDs trading be made permanent.
The news removes a key element of uncertainty from the market. Retail brokers can now focus on implementing their long-term plans to tackle the new regulatory environment.
Traditionally, the removal of uncertainties is a positive thing for markets. Whether or not EU brokers are prepared, the changes to regulations are now a fact.
Those who manage to adapt will be the best-positioned for long-term growth. The industry has become more capital-intensive in recent years and publicly-listed companies are at an advantage to the rest of the industry to a certain extent.
The long term performance of shares of listed CFDs brokers depends on how flexible they are and how well they execute their diversification plans. As to their share prices, with the worst of the news being priced in and the volatility cycle appearing to take a turn, current levels could prove to be attractive for long-term investors.
With the results from the new regulations in Europe becoming more or less clear, the value of retail brokerage companies has been declining steadily. As of December, the only companies which haven’t registered a dramatic decline are those which are buying back their own stock.
Plus500 and GAIN Capital have been maintaining an effective floor for their shares’ value over the past several months. The year has been quite a tumultuous one for shareholders of publicly listed retail brokers.
After the regulatory framework was ignored by the market until about the day when it took effect, the decline in the shares of GAIN Capital, CMC Markets, IG Group and Plus500 serves only to prove that markets are always acting in the least expected way.
Regulatory Issues and Market Trends
The regulatory issues plaguing the retail Forex and CFDs trading industry have been the main fundamental development since December 2016. Around the time of the first hint by the FCA about the severity of the measures discussed at a pan-European level, shares of all publicly-listed brokers tanked materially.
What happened on the stock market in the aftermath, was largely a result from the failure on behalf of some firms to communicate to their investor base about the impact that the changes will have on the business.
While some companies have done an incredibly good job and have even been warning markets about being too optimistic about their prospects, others have painted a picture which turned out to be rosier than many wished.
Plus500 and GAIN Capital Buybacks
Both Plus500 and GAIN Capital chose to provide a cushion to the blow and committed to buying back stock. The effort has helped to prop up shares of the companies so far. Some old-times investors in Plus500, like Crispin Odey, are once again holding a more significant interest in the stock.
After the sale of its GTX business, GAIN Capital provided $50mln worth of Liquidity for investors to exit their positions. After the announcement, the company’s stock stabilized between $7 and $8 per share.
CMC Markets and IG Group Hit New Lows
As the diversification effort for both CMC Markets and IG Group gets on its way, so might the value of the shares of the companies which have been punished lately. The reports from IG that the company lost close to 20% of revenues from the EU and the UK caused another leg lower this week.
Both firms have been impacted heavier than expected. The focus on higher net worth clients and the shifting focus to professional clients has been a universal attempt on part of the industry to mitigate the impact of the new regulations. The impact to attracting new clients, however, has been felt the hardest as new client acquisition costs increased dramatically.
Looking Beyond Standard Solutions
Publicly listed and private retail brokers have been looking for ways to mitigate the impact of the new regulations in several areas. Geographical diversification has played a role and will continue to be the dominant factor, however, increased changes to the product mix are not out of the question.
The value of mobile apps that are bringing in traffic has become increasingly more important for firms. With the competition from several smaller companies, the majors in this industry are facing yet another challenge to prove themselves.
The End of Uncertainty
The first full week of December saw one last missing element from any analysis of FX and CFDs broker shares. The FCA announced that it is proposing that the temporary measures on FX and CFDs trading be made permanent.
The news removes a key element of uncertainty from the market. Retail brokers can now focus on implementing their long-term plans to tackle the new regulatory environment.
Traditionally, the removal of uncertainties is a positive thing for markets. Whether or not EU brokers are prepared, the changes to regulations are now a fact.
Those who manage to adapt will be the best-positioned for long-term growth. The industry has become more capital-intensive in recent years and publicly-listed companies are at an advantage to the rest of the industry to a certain extent.
The long term performance of shares of listed CFDs brokers depends on how flexible they are and how well they execute their diversification plans. As to their share prices, with the worst of the news being priced in and the volatility cycle appearing to take a turn, current levels could prove to be attractive for long-term investors.
FCA Approval Expands Stratiphy's Retail Offerings with Customized Portfolios
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.
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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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
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:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_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!
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/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
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!
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!
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
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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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.
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
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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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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Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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