CMC Markets increases client base as revenue per client drops in Q2 2016

CMC Markets increases client base as revenue per client drops in Q2 2016

Do not invest more money than you can afford to lose.


CMC Markets  (LON:CMCX), a UK forex and spreadbetting broker, that went public earlier this year reported a strong growth in client applications and approved accounts in Q2 2016 that ended on June 30, but at the same time the value of client trades in the quarter was lower.

According to the interim management statement of the broker, in Q2 2016 the number of active clients rose 13% compared to the same period of 2015 and the moderate decrease in revenue per active client was mostly due to the EU referendum in the UK, particularly in the days leading up to it.

The momentous decision of the Brits that provoked high market volatility, however, did not affect CMC Markets, thanks to its prudent risk management and proactively managed margins. “As a result no losses were incurred through the high levels of volatility around the EU Referendum,” the company noted in its statement.

CMC Markets was also quick to dispel any doubts on whether the Brexit will affect its business activities and stated it would restructure its offices to continue to service its European clients in case trade barriers are imposed on the UK. At the same time, its head office will remain in London.

“The Group continues to make progress on its five pillars for growth and we continue to attract high-quality clients through our focus on retention, service and technology. In line with the wider market, volumes were lower leading into the EU referendum as clients traded in smaller sizes. However, clients trade volumes have subsequently increased and improvements in underlying client metrics are very positive,” said the majority stakeholder and CEO of CMC Markets, Peter Cruddas.

As SMN reported earlier, Cruddas was one of the main donors of the “Leave” campaign with GBP 1 million. In the days following the EU referendum Cruddas lost GBP 30 million of his personal fortune, while CMC Markets lost GBP 100 million of its market capitalization as the FTSE 250 index took a dive. The losses, obviously, have not dampened Cruddas’ optimism.

CMC Markets also reported progress in its five strategic growth initiatives. It continued strong client acquisition in its three established markets and has retained its leading market position in Germany. In Australia the company increased its primary market share and remained the largest provider for high value clients with over 30% market share. At the same time, CMC Markets’ performance in Austria and Poland continued as expected, while in France and Italy continues to improve.

The brokerage boasted strong levels of mobile app downloads and promised a new device responsive application form improving conversion rates will be rolled out across all markets in the coming months.

According to the company statement, the binaries offering that was launched in April will get an expansion of the instrument range over the next 12 months. CMC Markets is also planning to enhance its Next Generation trading platform.

The brokerage also boasted with important progress of its institutional business and now offers White Label, Grey Label and API connectivity through the Next Generation platform.

CMC Markets was set up back in 1989 and now it runs offices in 14 countries across the globe, focusing on the markets in the UK, Australia, Germany, and Singapore. The broker offers trading in more than 10,000 financial instruments, including forex, shares, indices, commodities and treasuries via its proprietary trading platform Next Generation.

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