November 21, 2019 / 8:06 AM / 23 days ago

UPDATE 1-CMC Markets hikes annual target after strong first half

(Adds background on regulatory crackdown, details from statement)

Nov 21 (Reuters) - British online trading firm CMC Markets Plc on Thursday posted a jump in first-half net operating income and lifted its full-year target, as clients adapted better to changes after a regulatory crackdown on high-risk bets.

CMC, which facilitates the trade of complex financial instruments, said net operating income surged 44.9% to 102.3 million pounds ($132.20 million) for the six months ended Sept. 30, also helped by a partnership with Australia’s ANZ Bank.

The company, initially set up as a foreign exchange broker with a 10,000 pound investment in 1989, now expects to report more than 180 million pounds in net operating income for the year, compared with a prior forecast of 170 million pounds.

CMC and its rivals, IG Group Holdings Plc and Plus500 Ltd, lost clients after regulators in Europe and Britain tightened trading rules, including allowing anyone with a bank card to make highly-leveraged bets on financial markets.

Australia is now set to follow, with a proposed ban on the sale of binary options and restriction on the sale of Contracts for Differences (CFDs), CMC said in late August.

Binary options allow people to bet on whether the price of a share, currency or index will go up or down within a certain time frame. CFDs give an investor exposure to price movements in securities without owning the underlying asset.

“This time last year we had the uncertainty of regulatory change overhanging the sector with the client response to the changes in minimum margin levels unclear,” Chief Executive Officer Peter Cruddas said.

“A year on, we are seeing clients adapt, maintaining their interest in the products and the trading platforms we offer.”

While the number of active clients slid 7% to 41,603 in the first half, CMC managed a 45% leap in revenue per active client to 2,047 pounds.

$1 = 0.7738 pounds Reporting by Safia Infant and Muvija M in Bengaluru; Editing by Subhranshu Sahu

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