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CMC Markets shares jump as ShoreCap upgrades stock after positive trading update

Published: 11:48 03 Apr 2018 BST

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ShoreCap lifted its forecast for CMC Markets earnings in 2018

CMC Markets Plc (LON:CMCX) shares jumped as Shore Capital upgraded the stock after the spread betting firm said a larger proportion of high-value clients was expected to lift full year revenue.

ShoreCap raised its rating on the stock to ‘buy’ from ‘hold’ and left its target price unchanged at 169p.

Shares rose 4.8% to 177.4p in late morning trading.

In a trading update on Thursday, CMC said net operating income for the second half was "significantly" higher than last year.

READ: CMC Markets buoyed by high value customers

While overall active client numbers were slightly lower on last year, they were generally spending more. The final quarter also saw a pick up in active client numbers.

ShoreCap increased its forecast for 2018 adjusted earnings per share by 11% due to the company’s strong finish to the year.

The brokerage also touched on a recent European ban on binary options and limitations on contracts for differences (CFDs).

“The final rules from ESMA (European Securities and Markets Authority), released on 27 March, will introduce more stringent regulation to the retail leverage trading market, specifically around leverage caps.

“This will impact on year-end March 2019 and beyond, but by a lesser extent than we were previously modelling given the ability of CMC’s client base to elect for professional designation.”

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