IG Group enjoys an Indian Summer

CFD broker IG Group released its Q1 2021 trading update this morning and the numbers suggest that there has been a continuation of the strong trading that the group enjoyed during the lockdown period.

Revenues from the group’s OTC trading businesses, which includes FX, CFDs, and Spreadbetting were higher by +59.0% than for the same period a year ago.

And there was also a +64.0% leap in revenues from exchange-traded derivatives compared to the first quarter of the full-year 2020. And perhaps most encouraging of all was the  +235.0% jump in income at its stock trading and investment division.

IG appears to be picking up new clients as well with 34,600 new customers placing their first trade with the group during this period. That figure was up by 129.0%  compared to the Q1 2020 numbers and 23,500 were new OTC leveraged trading accounts.

IG didn’t go into details about client retention rates except to say that the rates seen in the first quarter of the new financial year and the last quarter of  FY 2020 were in line with prior trends.

Though CFO Charlie Rozes flagged, in the conference call that accompanied the announcement, that there were more than 200,000 active clients in Q1 202. A figure that was +1% higher than the record numbers seen in Q4 2020.

IG shares have traded up by +7.16% this morning to print at 846p. The shares have appreciated by more than +30% over the last 6 months and are up +13.60% year to date. Though the stock is  still below the highs seen in early July of 871.5p

How does IG Groups’ performance compare to CMC Markets and Plus 500?

Well rivals Plus500  released a trading update of its own this week where it noted that

“The operational momentum achieved during H1 2020 has continued into the second half to date,”

And that

“The Company has also on-boarded a high level of new customers so far in the second half, driven by continued investment in its marketing technology, rapid response to market events”

However, they didn’t provide any specific numbers to back those assertions up.

Though interestingly a proposal to award a significant bonus to the head of finance was rejected by shareholders at the company AGM, held yesterday, read into that what you will.

Plus 500 will publish results for the third quarter of 2020 on the 27th of October.

Plus 500 shares are up by +1.90% today and are unchanged over the prior week and month.

Though the stock is sitting on significant longer-term gains the shares are up by more than +102% over the prior 6 months for example.

CMC Markets which will take its place in the FTSE 250 next week updated the markets on its trading at the begging of the month. The update covered the period on the 1st of July and the 31st of August 2020 and the company that

“The Group’s consistently strong trading performance across the business has continued, with net operating income run rate for the two month period only slightly below Q1 2021, and client income has continued to be in excess of the same period in the prior year. “

And that

“In addition, client income retention has remained particularly strong and well in excess of the guidance of above 80%. The stockbroking business also continues to perform strongly.”

CMC Markets will publish H1 2021 results on the  8th of October a little over three weeks away. Shares in CMC were up by 0.92% at the time of writing at 330.52p some -30 pence below the highs of 364.50p which were posted in late July.

IG Group has been only one of the three listed players to provide numerical evidence of how trading has been fairing over the summer months and into the autumn but with a recent bout of market volatility, a rash of high profile IPOs, economic uncertainty, and US election in the offing there is plenty to keep clients interested in the markets and that should benefit the margin trading sector as a whole.