Online traders shrug off watchdog’s crackdown

INVESTORS in online trading websites brushed aside a clampdown on high-risk investments by the EU markets watchdog.

The European Securities and Markets Authority (ESMA) made a long-awaited intervention to stop amateur investors losing thousands of pounds making risky punts on financial markets.

As part of the crackdown, firms will not be able to sell inexperienced investors so-called binary options – bets on the movements of shares and other assets – for at least three months.

ESMA has also introduced tighter rules on what are known as contracts for difference, which allow investors to bet on price movements of currencies, metals and stocks. But the complicated way they are structured means savers can lose a lot more than they put down.

IG Group, Europe’s largest online trading site, lashed out at the watchdog, arguing the clampdown was ‘disproportionate’.

It shares held up well despite warning the new rules would hit its revenues for 2019, ending the day up 0.5pc, or 4p, at 820p.

Rival CMC said it was ‘well-prepared’ for the measures, which were first suggested in December, adding that ‘fair client outcomes have always been the focus of the group’. Its shares ended the day down 0.6pc, or 1p, at 158.2p.

Fellow trading site Plus 500 rose by 7.3pc, or 76p, to 1119p after claiming it had already complied with the rules.

The FTSE 100 ended higher for the first time in four days as worries over a trade war between the US and China faded. It ticked up 1.6pc, or 111.45 points, to 7000.14. Plumbing supplies firm Ferguson topped the blue- chip index after reporting rising profits and an appetite for acquisitions.

It reported a $598m (£422m) profit in the six months to January 31, up from $556m (£392.6m) the year before.

It has also reportedly earmarked a £280m war chest to snap up businesses in the US and Canada, where most of its revenues are made, over the coming year.

Shares jumped 6.7pc, or 344p, to 5478p as it announced a $1bn (£710m) dividend for investors.

AG Barr has managed to increase profits despite a public backlash over its switch to a healthier recipe for its flagship drink Irn-Bru before April’s sugar tax is introduced.

There had been concerns that sales would be hit by its move to halve the sugar content of its famously orange drink so it would avoid the tax. But sales of Irn-Bru were up 8pc in the year to January 27 while pre-tax profits were up 4.2pc at £44.9m.

The FTSE 250-listed firm also managed to increase its final dividend by 8pc to 15.55p a share. At closing, AG Barr’s shares were up 1.8pc, or 11p, at 626p. On AIM, shares in tech firm Telit

Communications dived after it revealed it was subject of an investigation by the City watchdog.

Details are light, but the firm said the Financial Conduct Authority is investigating the ‘timeliness of announcing certain matters’ in the internet-of-things company’s August profit warning.

Telit said it ‘has co-operated fully with the FCA in its enquiries to date and will continue to do so’.

It has been a difficult year for Telit, in which it was forced to sack its chief executive Oozi Cats, who was linked to a string of scams carried out in Boston in the early 1990s. Shares yesterday slumped 8.1pc, or 12.8p, to 145p.

A record half-year for AIM-listed flooring manufacturer James Halstead boosted its shares. Revenue in the six months to December 31 was up 5.4pc to £ 126m while pre- tax profits increased 2pc to £23.7m.

Its shares ticked up nearly 3pc, or 12p, to 415p.