Rise at trading firm CMC Markets gives Tory peer Lord Cruddas a £40m windfall

Shares in two city trading firms rose yesterday after a revival in activity late last year.

In a boost for Tory donor Peter Cruddas, his company CMC Markets said it had seen 'an improvement in market conditions' in recent months.

The spread-betting group expects to report operating profit of between £290m and £310m for the year to the end of March, up from previously expected £250m to £280m.

That pushed the shares up 21.6 percent, or 23.8p, to 133.8p, adding £41 million to the 62 percent stake held by Cruddas and his wife Fiona.

Rival Plus 500, meanwhile, said it generated revenues of £570m and underlying profits of £270m in 2023, which it said were 'significantly higher than current market expectations'.

Shares rose 8 percent, or 133p, to 1793p.

Brokers at Jefferies said: 'The trading update implies a strong end to the year (for Plus500.'

Markets were supported late last year by hopes of interest rate cuts on both sides of the Atlantic.

Research from Hargreaves Lansdown published yesterday shows that investor confidence rose by 50 percent in Britain and Europe in December.

CMC fell to a pre-tax loss of £2m for the six months to the end of September.

The shares fell 53 percent last year and are only worth about a quarter of their 2021 peak value even after the latest rally.

David Fineberg, deputy chief executive, told the FT that retail investor confidence had improved after markets soared late last year on the possibility of interest rate cuts.

Brokers at Peel Hunt upgraded the shares to a 'buy', noting that 'benefits were starting to be realized from the investments made'.