CMC Connect Newsletter - May

04 May 2021, 21:00

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In London, the weather is getting warmer, the evenings have become lighter and some of us are venturing back into our offices. However, many aspects of life still seem a long way from returning to normal and I know that day-to-day restrictions are being eased at different paces in many parts of the world. But as an industry, one constant as we start to look beyond the COVID pandemic, is the need to keep reacting to and anticipating change. Whether that’s driven by ongoing infrastructure evolution like the structural overhaul for Hong Kong’s Hang Seng index or caused by global trade being scuttled after a containership wedges itself across the Suez Canal, there’s certainly no shortage of themes we need to keep across as 2021 unfolds.

Corporate update

In March, the company published a pre-close trading update, highlighting a continued strong performance for the fourth quarter. As a result, expectations are now that income for the year to 31st March will be slightly ahead of the upper range of consensus forecasts. CEO Peter Cruddas noted that a relentless focus on supporting clients with market leading technology and service had helped fuel record growth. Full year results are scheduled for publication on June 10th.

Market insights & trends

Despite emerging inflationary pressures, the Central Bank narrative has remained that there is still no rush to start tightening monetary policy. This, combined with the speed of COVID vaccine roll out programmes in both the UK and US, has broadly helped equity markets in moving higher, whilst subduing volatility across the majority of asset classes. Even the temporary blockage of the Suez Canal - and the corresponding threat of disruption to global supply chains – failed to make a lasting impression on market confidence.

Events

Physical events remain largely absent from the agenda, although it’s great to see that Finance Magnates is pushing ahead with an Expo, this time in Dubai. The industry can be expected to watch the attendance figures closely, but Ahmed Soliman from our UAE office will be there. If you’re planning to be at the show, do drop him a note to arrange a meeting.

In March, the CMC Connect team arranged a virtual panel discussion as part of its International Women’s Day celebrations. The subject under discussion was the Blockchain and its role in the future of digital settlement. You can read a review of key findings here and download an e-book which was created to accompany the event here.

Award wins

The absence of physical events hasn’t prevented the company from collecting more plaudits. These included Best Trading Technology provider at the HedgeWeek European Awards 2021, whilst our retail division was heralded as Best Spread Betting Provider at the City of London Wealth Management Awards, 2021.

Publications

The March edition of FX Markets Magazine saw Richard Elston, head of CMC Markets Connect, discussing why as an industry we need to ensure there’s proper demarcation between liquidity providers and prime-of-prime (PoP) brokers. Whilst both have a role to play, failure to use the correct terminology here risks a rerun of the PoP misappropriation we saw just a few years ago. Read the full article here.

Again in March, The Industry Spread covered CMC’s institutional cryptocurrency offerings, noting that given the asset has now truly shown its longevity, those trading digital coins are increasingly looking for counterparties with strong balance sheets - and even stronger brand recognition. The full article can be found here.

April’s edition of e-Forex saw the publication interview Craig Inglis, CMC Markets MD of Europe, on the build versus buy conundrum which faces many smaller brokers. Read the full interview here.

Regulation Watch

There was a key regulatory development in the APAC region this quarter, with ASIC moving to implement a range of restrictions on CFD products for retail customers. Lower leverage limits, standardised close out procedures and negative balance protections may have fundamentally changed the local market, although these largely mirror the moves already implemented by ESMA across Europe, which came into effect back in 2019. ASIC has also taken action to ban the sale of binary options to retail clients.

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