Goldman Sachs writes down stake in CMC Markets

Goldman Sachs writes down stake in CMC Markets

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Due to regulatory filings from previous week it became clear that US multinational investment banking firm Goldman Sachs has written down its stake in CMC Markets  (LON:CMCX). Currently, Goldman Sachs’s stake in the major brokerage company amounts to just 3.34%.

Goldman Sachs has been a partner in CMC Markets since 2007, when it bought a 10% share in the broker for $140 million. It also took active participation in the floating of CMC Markets on the LSE in February 2016.

Goldman had since retained an approximate 5% stake in CMC Markets, but probably got frustrated over the continuous decline of CMC Markets’ stock price. There were some major events that shook financial markets in 2016, and those with the most dramatic effect for UK companies were Brexit and FCA’s restrictive regulatory proposals. In fact, after the Financial Conduct Authority (FCA) proposed stricter rules for forex brokers, CMC Markets, IG Group, and Plus500 saw their shares open on the next day by a double-digit drop.

Overall, CMC Markets’ stock price dropped by more than 37% after the company has gone public. The broker’s stock traded for GBX 238.27 apiece on its first post-IPO date, while today its price amounts to GBX 149.75.

CMC stock

Earlier in June, CMC Markets reported a net operating income of £160.8 million, for the financial year that ended on March 31, 2017, which is 5% less than FY2016’s £169.4 million.

CMC Markets holds a license from the UK’s Financial Conduct Authority (FCA). It is also registered across several countries in the EU, including with France’s Autorite des Marches Financiers (AMF). The brokerage serves retail and institutional clients and has offices in 14 countries with a focus on the markets in the UK, Australia, Germany and Singapore. It offers trading in forex, CFDs, commodities, indices, shares, etc.

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