Plus500 share price rockets on share buyback announcement

 
Oliver Gill
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Plus500 investors responded positively to this morning's announcement (Source: Getty)

Shares in spreadbetting firm Plus500 leapt nearly 10 per cent this morning after the firm announced a share buyback programme and assured investors trading had been "stronger" despite a tumultuous few months.

Some $10m (£8m) of shares will be bought back by the London-listed firm, paid for by what chief executive Asaf Elimelech called Plus500's "significant cash resources".

The spreadbetter said it had net cash balances of $191m at the end of May, including $75m it plans to pay to in final and special dividends at the start of July.

Read more: FCA gets tough on spreadbetters: But what is a contract for difference?

Plus500 added that trading since its first quarter update on 26 April "has been stronger and profit margins have been maintained".

In a stockmarket announcement Plus500 added: "This is despite considerably lower levels of volatility as measured by the VIX Index than in the same period of 2016."

Spreadbetting firms were surprised by a regulatory clampdown at the end of last year. Watchdogs across Europe revealed plans that including limiting customers' leverage ratios and banning inducements for new clients.

Read more: Spreadbetters' shares tumble on news of FCA crackdown

When the Financial Conduct Authority (FCA) revealed its plans in early December, spreadbetting shares plummeted with Plus500 losing over a quarter of its market cap in one day. Spreadbetting firms are understood to have lobbied hard against the FCA plans which are yet to be finalised.

Today, Plus500 said:

None of the regulatory changes announced in various jurisdictions in which the Company operates has had a material impact on trading performance, albeit we continue to monitor trends closely, and are awaiting the outcome of the FCA consultation which could affect the second half of 2017.

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