Plus 500 windfall from bets on choppy markets
IT IS little surprise that retail investors have wanted a piece of the action as stock markets have gone topsy-turvy over the last few weeks.
Figures from trading platform
Plus 500 yesterday showed the scale of this enthusiasm.
Revenue in the first three months of the year soared to £252.5m, a whopping 487pc higher than the same time last year.
Almost 83,000 new customers registered during that period as hordes of amateur traders sought to cash in on the choppy markets. It now has 194,024 active customers, compared with 97,921 at the same time in 2019.
And the revenue it makes from each user rose sharply, from £438 to £1,304. Some of this is due to people putting more in to start with but it could also mean some people are racking up hefty losses.
Plus 500 and its peers have been subject to a crackdown from regulators, who have taken aim at their riskier products which bet on whether the price of a share or commodity will go up or down. The majority of investors tend to lose out from these trades.
Plus 500’s revenue surge did little to boost its share price last night, which dipped 2.8pc, or 30.5p, to 1077.5p.
Professional traders sent the broader market higher as they cheered more signs that the coronavirus outbreak is slowing in western Europe and that containment measures are beginning to pay off.
The FTSE 100 rose 2pc, or 122.06 points, to 5704.45, mirroring jumps of 1.5pc and 2.3pc on France and Germany’s main indexes respectively, and an early rise on the Dow Jones. The rally was driven by turbo- charged increases in some of the stocks worst affected by the pandemic, as countries getting on top of the disease increased hopes that business will start to return to normal.
Cruise ship operator Carnival rose 22.2pc, or 158.8p, to 874.8p after Saudi Arabia’s state fund took an 8.2pc stake in the group.
British Airways- owner IAG surged 7.2pc, or 16.3p, to 242.7p, and aeroplane engine servicer
Rolls-Royce closed 12.8pc higher, up 38p, to 335.7p. And the domestically-focused
FTSE 250, which rose 5.1pc, adding 756.60 points, to finish at 15568.96, was boosted by even bigger leaps from the likes of Cineworld – up 49pc, or 19.4p, to 59p – and shopping centre owner
Hammerson, which climbed 34.7pc, or 19.8p, to 77p.
Brokers are also starting to look for green shoots in the market, with brokers at Liberum upgrading Stagecoach (down 0.6pc, or 0.45p, to 75.95p) and Go
Ahead (up 2.2pc, or 22p, to 1027p) to ‘ buy’, saying there are ‘potential opportunities’ in public transport and that both stocks stand to recover well once the crisis is over.
Elsewhere, mid- cap security group G4S added 14.6pc, or 11.82p, to 92.86p as it completed the sale of its cash-handling business to US group The Brink Company for £670m. It has received about half of this cash so far.
Building materials supplier SIG fell 0.8pc, or 0.15p, to 19.85p after the Competition and Markets Authority referred the sale of its Building Solutions unit to Kingspan for a more in-depth investigation. Premier Oil made strong gains – rising 13.4pc, or 3.36p, to 28.45p – despite abandoning an oil exploration well in Alaska which turned out to be a dud.
But its partner in the project, AIM-listed 88 Energy, nosedived 71.8pc, or 0.79p, to 0.31p. Ecuador-focused mining group
Solgold, which is a favourite of retail investors, fell 3.8pc, or 0.7p, to 17.7p, despite finding its Cascabel copper-gold asset was bigger than expected.