(Adds background on rivals, volatility index)
March 16 (Reuters) - Online platform Plus500 said on Monday that annual earnings and revenue would be ahead of analysts’ current expectations, as the turmoil on financial markets due to the coronavirus and a dive in oil prices drove a surge in trading.
Plus500 had already reported a significant increase last month in customer trading in the first weeks of what is now the most dramatic sell-off on financial markets since the 2008 to 2009 sub-prime crisis.
The CBOE Volatility Index, often dubbed Wall Street’s fear gauge, touched its highest since 2008 last week as the launching of a price war between top producers Russia and Saudi Arabia drove a 20% slide in oil prices.
“The Company has continued to see a significantly increased level of customer trading activity alongside strong momentum across all financial and operational KPIs,” UK-listed Plus500 said.
Plus500’s upbeat guidance follows similar messages from rival CMC Markets and broker TP ICAP <TCAPI.L, all businesses which tend to benefit from periods of increased market volatility.
“Not only has the recent surge in volatility resulted in a significant increase in client activity, the strength of the group’s platform and brand has helped it deliver stronger user growth during Q1’20,” analysts from brokerage Liberum said in a morning note on Plus500, raising their forecast for full-year pretax profit by 52%. (Reporting by Muvija M in Bengaluru; editing by Patrick Graham)