Plus500 eases regulatory fears with record first half

SHARES in Plus500 soared 19pc after the trading business posted record results and pledged to expand despite major new trading rules in Europe.

The Aim-listed, Israel-based firm saw its net profits more than double to $90.7m (£69.5m) for the six months to June 30, driven by a surge in new clients, as well as a rise in existing customers increasing their trading activity. The period marks a record first half for the group, with the profit surge and a 19pc rise in revenues to $188.4m being “significantly” ahead of expectations.

The strong run has led the company, which cashed in on renewed interest in spreadbetting following the Brexit vote last June, to explore “new avenues for growth”. These will come from expanding in existing jurisdictions such as the UK, where it is the second largest provider of contracts for difference (CFD) instruments, as well as launching in new areas, the group said.

Its pledge to expand comes as the Financial Conduct Authority and the European Securities and Markets Authority work together to form a list of tighter rules on the sector – action that sent shares in Plus500 and its rivals plunging last December.

The new proposals, which could come into play from January 2018, are aimed at making sure investors using Cfds – which allow people to trade on price movements in financial markets – understand the risks involved. Plus500 reiterated that it welcomed the move in its report.

While the group saw its number of new customers slip 5pc on a year ago, when 56,929 people signed up, the market paid more attention to its upbeat earnings forecast, with the company saying it was on track to “significantly” beat the City’s expectations for 2017. Its shares closed up 127.5p at 784p yesterday.