Online broker CMC sounds profit warning as market volatility eases

[BENGALURU] Online trading platform CMC Markets cut its annual earnings outlook by up to £80 million (S$148.3 million) on Thursday as reduced market volatility resulted in lower transaction volumes across new and existing clients.

CMC, which facilitates the trade of complex financial instruments, had raised its outlook multiple times this year as a retail trading boom and market volatility fuelled volumes across the sector.

But those levels have eased as government stimulus measures and vaccinations have quelled fears about the pandemic's impact on growth, with the CBOE volatility index, or Wall Street's fear gauge, settling at about 16.11. It hit a peak of 85.5 in March last year.

The British company now expects fiscal year 2022 operating income of £250-280 million pounds. CMC had earlier said it was confident of generating in excess of £330 million.

Client numbers remain up around a third from pre-pandemic numbers, while assets under management remain near record levels, the company said.

Operating costs for the year till March 31, 2022 will continue to be moderately higher, although will be partly offset by lower marketing costs in line with lower activity, CMC added.

REUTERS