A Jeremy Corbyn victory would cause bedlam in the financial markets, with a fifth likely to be wiped off the value of sterling and shares, the boss of Britain's second largest spreadbetting firm has warned.
CMC chief exec Peter Cruddas said while the stock market upheaval would be good for business, he was still hoping for a win by Theresa May's Conservatives.
Shares in the financial derivatives dealer jumped over six per cent in morning trading despite posting a fall in annual profits.
Net operating income fell by five per cent to £160.8m with profit before tax dipping nine per cent to £48.5m.
Earnings per share were 13.7p compared with 15.1p the year before.
Dividends, however, were maintained at 8.9p.
Trading volumes fell by six per cent to 62.7m with the value of trades dropping three per cent to £2 trillion.
Active client numbers grew by five per cent to 60.1m though the revenue per active client fell by 11 per cent to £2,517.
Why it's interesting
Cruddas, the former co-treasurer of the Conservative Party, was confident May would be well on her way back to Downing Street by 11pm this evening.
However, speaking to City A.M. this lunchtime, he said markets would be plunged into turmoil if the exit polls released at 10pm indicate Corbyn has "got any sniff".
Spreadbetting firms are currently lobbying the Financial Conduct Authority (FCA) over plans to clamp down on the sector. Similarly to some of its European counterparts, the FCA wants to stop firms exploiting less sophisticated clients.
Cruddas welcomed the move saying it was good for both CMC and the wider market.
What the company said
A Jeremy Corbyn victory:
From a business point of view, we would see a lot more volatility if Mr Corbyn became Prime Minister. You would see sterling drop, probably 20 per cent overnight.
You’d see the stockmarket fall 20 per cent. So from a business point of view, I think it’s good for business because it will generate a lot of volatility.
The tightening of regulation:
We totally agree with what the regulator is trying to do. Inexperienced clients need protection.
We think it gives us a competitive advantage because we do not target the low end of the market.
We target experienced clients. We think it will be good for us in the long run and good for the industry, provided it’s implemented across the whole of Europe, including places like Cyprus.
The smaller firms will not survive. So bring it on.