New Model Adviser - For professional financial planners

Register free for our breaking news email alerts with analysis and cutting edge commentary from our award winning team. Registration only takes a minute.

FTSE rises but Plus500 plunge downs spread betting firms

FTSE 100 gains ground but Plus500 plunges, knocking rival online trading platforms, as revenues tumble.

FTSE rises but Plus500 plunge downs spread betting firms

The FTSE 100 has gained ground, rising 29 points, or 0.4%, to 7,447, but the London market's major action took place outside the blue-chip index, as spread betting firm Plus500 (PLUSP) reported a dive in revenues.

Shares in the FTSE 250 online trading company fell 24.2% to 544.4p on news of revenues dropping to just $53.9 million (£41.2 million) in the first three months of the year, down from $297.3 million in the same period last year.

The news knocked shares in rivals, with CMC Markets (CMCX) falling 4.6% to 77.3p and IG Group (IGG) 2.2% lower at 505.8p.

Plus500, which had warned on profits in February, said calmer markets since the turn of the year had created fewer trading opportunities, while tougher rules affecting retail clients had weighed.

Berenberg analyst Donald Tait cut his rating on the stock from 'buy' to 'hold' on the news and slashed his target price from £18 to 770p. 

'While conditions could improve and extrapolating from a single quarter is dangerous, visibility is low and market losses are large,' he said.

'Given the lack of visibility of revenues and signs that regulators will continue to target the sector, we downgrade to "hold".'

Peel Hunt analyst Anthony Da Costa placed his 'add' rating on the shares under review. 

'Plus500 is a predominately digital marketing business that relies on retail client acquisition,' he said. 'Concerns remain in the longer-term sustainability of the business.'

Pets At Home (PETSP) joined Plus500 at the bottom of the FTSE 250, down 11.8% at 144p after the Canada Pension Plan Investment Board agreed to sell its 11% stake in the company.

Games Workshop (GAW) was the biggest riser, up 10.7% as the miniature war games maker forecast strong profits.

Share this story

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
More Content
7271.97 + 41 0.57% 10:07
More Content
More Content



May bail: PM to announce departure date today

May bail: PM to announce departure date today

Prime Minister Theresa May is set to confirm she will be stepping down as Conservative leader and set a date for her departure.