Shares in the parent company of City Index, one of the best CFD brokers have risen sharply after their latest financial results.
Gain Capital, the owner of top CFD broker City Index, saw their shares rise by more than 10 per cent on the back of a landmark $30 million buy-back program.
City Index are one of the largest forex brokers and their shares have recovered sharply after hitting a year-long low just days ago. Gain Capital’s Q3 financial results included a $30 million buyback scheme, alongside a 20 per cent increase in dividends to 0.6 cents.
The changes were made to appeal to long-term investors, many of whom have seen the share price fall to a year-long low in recent times. The announcement saw shares in City Index’s parent rise by double digits, with the value rising by more than half a dollar during trading.
After the sharp rise, Gain Capital reached a market capitalisation on $246.6 million and the stock has a price/earnings ratio of 7.1.
The share price rose despite Gain Capital’s results showing that revenues were down by 33 per cent quarter on quarter to $72.2 million. The company attributed its poor financial showing to the ‘challenging market conditions of the third quarter‘ which ‘resulted in lower than expected average daily volumes and revenue capture.’
At the point where Gain took over top spread betting broker City Index, their retail volumes exceeded $350 billion, making it one of the world’s largest retail MT4 brokers. The company provides trading services and solutions in over-the-counter and exchange-traded markets. It offers financial products, including foreign exchange, or forex, and precious metals.
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