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(Alliance News) - Online trading firm CMC Markets PLC on Thursday said it expects an increase in full-year profit after positive first-half trading, as Australia is poised to add new regulatory measures to contracts-for-difference and binary options trading.
CMC said net trading revenue was strong in the six months to September 30, attributed to the contribution from higher-value clients and the growth of its technology B2B business.
The company anticipates its stockbroking business will generate revenue of GBP14 million in the first half, up sharply year-on-year from GBP5.5 million.
Net trading revenue of GBP85 million is expected from its CFD business, which would be 35% higher than the GBP63 million reported in the first half of last year. CMC said it has attracted higher-value clients in the division.
CMC is confident that net operating income will exceed GBP170 million for the full-year ending March 2020, with pretax profit also expected to rise.
Chief Executive Peter Cruddas said: "I am pleased with our first-half performance. This time last year we had the uncertainty of regulatory change hanging over the sector and the uncertainty of how clients would react to the changes in minimum margin levels. A year on, we are seeing clients adapting to the new changes and still maintaining their interest in the products and the trading platforms we offer."
CMC will release its first half results on November 21.
The company said it welcomes the consultation by the Australian Securities & Investments Commission about CFDs and is supportive of regulatory change "to ensure that all providers operate to the highest standards". CMC added that it is more than just a CFD business in Australia, as it derives income from technology partnerships there as well.
Australian regulators earlier this year proposed the ban of the sale of binary options and contracts for difference to retail clients. CMC expects regulatory measures to come into effect in the second half of the financial year.
In March, the UK Financial Conduct Authority confirmed it had banned binary options trading for retail clients citing "poor conduct" from the firms offering them.
Shares in CMC were 6.6% higher at 113.00 pence each in London on Thursday morning.
By Eric Cunha; ericcunha@alliancenews.com
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