XTB and CMC Markets – the worst performers among forex broker IPOs of 2016

XTB and CMC Markets – the worst performers among forex broker IPOs of 2016

IPO

For a second consecutive month the shares of EU forex brokerages CMC Markets (LON:CMCX) and X Trade Brokers Dom Maklerski SA (WSE:XTB), a.k.a. XTB, register a decline compared to their first post-IPO day. On October 31 (at market close) XTB’s stock price amounted to PLN 7.91, which represents a substantial decline of 34.4 %. Meanwhile, CMC Markets also saw its shares drop by double digits (20.4%), compared to their price on Feb 05 when it debuted on the LSE.

In fact, XTB turned from best to worst performer in a matter of months. In July, WSE-listed brokerage showed best results among the four companies, staging a rise of more than 20% in its stock price and coming out of Brexit turmoil with a positive price change. XTB’s arrow started to fall in August, when its stock dropped slightly by 7% and continues to plunge ever since. On October 18, after announcing unsatisfactory financial and trading results for Q3 2016, XTB saw its shares reaching their all-time lowest price of PLN 6.57. Consequently, it was outshined by Gain Capital (NYSE:GCAP) in terms of market capitalization.

Meanwhile, CMC Markets also dropped to 4th place in the forex brokers market cap chart in October. The UK brokerage was outperformed by Japanese giant GMO Click (TYO:7177). Actually, CMC Markets’ stock price dropped by almost 13% for a single day after the company announced its net income is expected to fall on September the 6, and it has been on the downside ever since.

Here is how each of the four companies that floated this year ended up yesterday, compared to their first post-IPO day (and September performance):

Company name IPO Date 1-Day 19 Sep Change % 31 Oct Change %
XTB May 6 PLN 12.05 PLN 10.20 -15.4 PLN 7.91 -34.4
BATS Global Markets April 15 USD 23.00 USD 25.81 12.2 USD 29.41 27.9
CMC Markets Feb 05 GBX 238.27 GBX 230.10 -3.4 GBX 189.74 -20.4
Hirose Mar 18 JPY 845.00 GBX 1056.00 24.9 JPY 1380.00 63.3

SMN Weekly keeps tabs on stock price performance of CMC Markets, XTB, Hirose and Bats Global Markets (owner of institutional forex trading platform HotSpot FX), in order to figure out the most successful forex broker IPO of the year. So far Japanese forex and binary options broker Hirose Tusyo Inc. (TYO:7185) has taken the lead, as its stock price has increased by 63.3% since its listing on the Tokyo Stock Exchange.

Furthermore, the company’s stock reached a new all-time high of JPY 1478.00 on October 26, a week after the FCA regulated arm of Hirose announced it has doubled its revenues in fiscal 2016.

US-based Bats Global Markets Inc. (BATS:BATS) continues with its good performance, staging a rise of 27.9% in its stock price since listing on its own BZX exchange in mid-April this year.

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