IG hit by EU clampdown on spread-betting rules
Online trading platform IG
Group warned of falling customer numbers and sliding sales as it grapples with european regulations on spread-betting.
The company allows customers to trade financial products including contracts- for- difference, which are linked to the price of shares or commodities.
But in an effort to protect inexperienced traders, who can suffer big potential losses, eU authorities introduced rules regarding how these services can be marketed and sold.
iG Group said that in the four months since the changes came into force on August 1, revenue in the UK and eU region was 20pc lower than the same period last year. This pulled the whole group’s revenue down by 10pc.
The firm did still grab 14,600 first-time customers in the first half of its financial year, but this was down from 18,027 in the same period of 2017.
investors were not impressed, and shares sank 9.7pc, or 59p, to 549.5p. The worries also rippled out to iG’s competitors. CMC
Markets dipped 1.8pc, or 2p, to 110p, while Plus 500 shed 3pc, or 45p, to close at 1469p.
Construction firm Kier Group suffered another torrid day, after announcing last week that it was raising more money from shareholders to pay down its debt pile.
Analysts at Canaccord Genuity and JP Morgan slashed their ratings on the company, with Canaccord moving from a ‘ buy’ to a ‘hold’ recommendation and JP Morgan more than halving its target price from 994p to 482p.
The shares reacted, sliding 4.1pc, or 18.4p, to 427.6p. Kier has now seen £317m wiped off its market value since announcing the fundraising last Friday. And in another bruising for the FTSe 250, Ted
Baker’s shares fell further as fears grow over the future of chief executive and founder Ray Kelvin.
The clothing retailer slipped 8.4pc, or 130p, to 1420p, meaning shares have plummeted by almost a quarter since allegations emerged over the weekend of harassment by Kelvin, 63, to staff.
Anonymous testimonies include several claims that Kelvin massaged, kissed or inappropriately touched members of staff. But for some investors, the dramatic selloff is an overreaction.
One top-five shareholder said: ‘Ted Baker is a well- established global brand. The share price does not reflect the value of that, or the investment that management has put in to it. We remain supportive of the management team.’
As the FTSe reshuffle approaches, when the value of all companies on the UK stock market is reassessed to determine which should be included in its indexes, clear winners and losers are emerging. From December 24,
Royal Mail will be relegated from the list of the UK’s most valuable public companies, the FTSe 100. its shares dipped 3pc, or 9.5p, to 305.9p as fund managers who can only invest in FTSe 100 companies sold the stock off.
The firm has had a dire year, suffering a major investor revolt over fat- cat pay, seeing its chairman Peter long step down over criticism that he had too many commitments, and posting a 57pc fall in half-year profits.
insurer Hiscox will take its place. its shares were up 0.3pc, or 5p, to 1684p. The FTSE 100 itself, meanwhile, was down 0.6pc, or 39.65 points, at 7,022.76.
Rail operator Go-Ahead was finally slapped with penalties by the Department for Transport, following a May debacle in which it tried to upgrade timetables on the Govia Thameslink Railway but ended up cancelling hundreds of services. it clung on to the GTR contract, but will have to invest £15m in passenger improvements and have its profit capped. Shares dipped 1.8pc, or 30p, to 1612p.