MARKET REPORT: Plus 500 cashes in on the pandemic craze for day trading with half year revenues of £252m
The pandemic craze for day trading shows no sign of waning despite restrictions being eased and workers being called back into the office.
Day trading boomed when the pandemic struck as people were stuck at home with more money and time on their hands than ever before.
Consumer Intelligence believes 1.8m adults in the UK became day traders during the pandemic, with many young people telling the New York-based research firm they did it to save for a deposit on a house and to make money fast.
The pandemic craze for day trading shows no sign of waning despite restrictions being eased and workers being called back into the office
One firm that took advantage of this trend has been Plus 500, which offers customers direct access to the markets while keeping trading costs low. Yesterday the firm dispelled fears that its lockdown success could come to a juddering halt after it upped guidance for the full year.
It also posted revenues of £252m for the half year, down from a record £409m last year, but still significantly above pre-pandemic levels. The results were also sweetened by a £9.1m share buyback.
Other than the buyback, the main reason for investors sticking with Plus 500 and rivals like Hargreaves Lansdown is because the average age of their customers has tumbled over the past eighteen months.
Last week Hargreaves said that almost one quarter of clients – 55,900 people – added this year were younger than 30. One broker said: ‘Attracting a younger audience is vital as like fashion labels they grow older with the brand. Hargreaves Lansdown used to be for pensioners with some money to spend.
‘It is something traditional blue chip brokers are very jealous of as we haven’t been able to attract this audience. The tech and the marketing hasn’t been good enough.’
The financial sector was under pressure as Legal & General retreated 0.9pc, or 2.4p, to 268p
Plus 500 gained 5.1pc, or 73p, to 1502.5p, and was the top riser on the FTSE250, which lost 0.08pc, or 19.14 points, to close at 23693.53. The FTSE100 managed to eke out a gain, up 0.4pc, or 27.13 points, to 7181.11, despite news that the index is set to lose its biggest company.
BHP is valued at £128bn and will shift its main stock market listing from London to Sydney. The decision is a blow for the index which prides itself on being home to world’s largest listed miners. BHP shares were up 3.4pc, or 77.5p, to 2358p. But among the fallers were airline and travel stocks as hopes faded for a late summer flourish.
STOCK WATCH: FULHAM SHORE
Franco Manca owner Fulham Shore has identified 150 sites for potential restaurants as the toll of Covid on the industry provides expansion opportunities. Shares in the London-listed group, which also owns the Real Greek chain, ticked higher after it also confirmed its latest trading performance.
The company said all of its 74 restaurant locations – which include 55 Franco Manca and 19 Real Greek sites – are open following pandemic closures. The group has opened two new Franco Mancas since April and a Real Greek is under construction in Norwich. Shares climbed 1.6pc, or 0.25p, to 16.25p.
Their shares soared at the end of July, but a sustained recovery has not materialised as investors realise that the relaxation of travel restrictions has come too late for the industry to make up lost ground this year.
British Airways-owner IAG and Intercontinental Hotels were both fallers, the former down 3.2pc, or 5.24p, at 159.22p, and the latter by 1.9pc, or 87p, at 4500p. Low-cost airline Easyjet showed the wider trend, with shares now at 789.2p (down 2pc, or 16.2p) compared with 889p on July 28.
As well as travel stocks, the financial sector was under pressure as Legal & General retreated 0.9pc, or 2.4p, to 268p and Natwest eased 1.4pc, or 3p, to 214.5p. The falls come despite JPMorgan bringing forward its forecast for when the Bank of England may raise rates to the second quarter next year.
Economist Allan Monks said the first 15 basis-point increase to 0.25pc will come six months earlier than he previously expected. Banks generally perform better in higher interest rate environments. Oilers were also initially subdued after Brent Crude prices remained below $70 per barrel.
But BP shares recovered, up 1.5pc, or 4.45p, at 302.45p, while Shell gained 1.8pc, or 25.6p, to 1436p. Despite biotech group Scancell revealing plans to introduce a needle-free coronavirus jab, which penetrates the skin with a precise stream of fluid instead, shares fell back 1pc, or 0.2p, to 20.5p.