CMC Markets (CMCX.L) has revised its full-year operating income forecast upward due to a robust third quarter driven by improved market conditions.
As a result, the online trading platform’s shares surged by up to 25% in response to the positive news.
The company, offering trading options in over 12,000 financial instruments spanning shares, indexes, foreign currencies, commodities, and treasuries, attributes this strong quarterly performance to the continued demand from business-to-business and institutional investors.
This resilience in demand has been a significant driver of their success.
For the fiscal year 2024, CMC Markets now anticipates net operating income to range between £290 million and £310 million ($368.8 million-$394.2 million), a notable increase from its previous projection of £250 million-£280 million.
Analysts had predicted an income of £265.3 million for the same period, according to a consensus compiled by the company.
CMC’s shares exhibited substantial growth, rising by 22.7% to reach 143.94 pence as of 0842 GMT, making it the top-performing stock on the London stock exchange.
Meanwhile, competitor Plus500 (PLUSP.L) announced its anticipated revenue of approximately $725 million and a core profit of around $340 million for the year ending December 31.
Their strategic efforts to expand into new regions, such as Japan and the UAE, have evidently paid off.
This news had a positive impact on Plus500’s shares, which rose by 7.5% to 1,782.2 pence, surpassing market expectations.
The trading platform industry experienced a surge in revenue during the pandemic, and the volatility in markets that followed Russia’s invasion of Ukraine in 2022 further boosted their earnings.
Although trading in 2023 was relatively subdued, the year-end increase in volatility, particularly due to the Middle East conflict, has proven advantageous for these platforms.
In summary, CMC Markets has upgraded its fiscal year 2024 operating income forecast, primarily due to the strong performance in the third quarter driven by robust market conditions and sustained demand from business and institutional clients.
This has led to a significant increase in its share price.
Additionally, rival company Plus500 has also reported impressive figures, benefiting from their expansion efforts into new regions and surpassing market expectations.
The trading platform industry continues to thrive, capitalizing on market volatility.