Financial results from respective brokerages in the blockchain industry have been publicly released in the last two months. The latest comes from Plus500, who have revealed their preliminary results, which haven’t been audited. These financial results noted that this brokerage received their license approval in the Seychelles Region, which indicate a new level of growth for Plus500 during the 2020 fiscal year.
This brokerage maintains securities dealer licences with several other jurisdictions, ranging across all continents in the world, except for North America. Those locations include the United Kingdom, Cyprus, New Zealand, Israel, Australia, Singapore and South Africa. Their 8th securities license stands in Seychelles, which has made Plus500 one of the most significant brokerages on the worldwide stage.
Plus500 provides clients with contract-for-difference through blockchain technologies. This can be beneficial and for others, detrimental. 2019 proved this point with the 1st half of their fiscal year seeing low volatility and lower profits. When it applied to the 2nd half, performances were considerably better and returned Plus500 to previous standards with earnings.
Economic growth throughout the 2nd half of 2019 saw percentages at 40%, allowing for profits to increase by $58.5 million. Earnings maintained throughout the first half were listed at $148 million, meaning that the total profits earned throughout this year were $354.5 million. That’s considerably lower than the fiscal earnings throughout 2018, which were listed at $720.4 million. All brokerages on the global stage have suffered drastic losses with increased regulation and legislation. However, a decrease of 60% in profits on the year-to-year scale is substantial. It’ll be challenging for Plus500 to improve their previous valuations to previous peaks.
Brokerages have suffered under the European Securities & Markets Authority, who made their product intervention measures permanent following the end of 2018s fiscal year. This is what’s prompted declining profits across the board, with respective traders under these brokerages leaving to unregulated markets. It’s inspired an immediate boost in markets like Nigeria, South Africa and Ecuador.
This doesn’t mean that there weren’t operational highlights under the financial reports listed by Plus500. Reports noted that customer trades on monthly scales were valued at three million. The average deposit for this clientele-base increased by 19% in comparison to 2018, which indicates that the market space is growing in popularity. Declining profits follow with lower leverages and smaller processing fees. With Plus500 unable to offer the 100:1 valuation, leverages are now limited to 30:1 and processing fees have dropped by 44%. Increased popularity in the CFD European Market could allow Plus500 to regrow to previous heights.
The Chief Executive Officer with Plus500, Asaf Elimelech, spoke on the posted results from this week. He mentioned: “We finished 2019 in good financial and operational shape following a period of changes for the industry, which has provided a more certain regulatory outlook for Plus500 and the industry as a whole. We were particularly pleased with the big improvement in financial performance in the second half of 2019 and believe that customer trading patterns have now adjusted following the regulatory changes introduced in Europe last year. We continue to monitor and prepare for any potential product intervention measures that are expected to take place in Australia during 2020.”
Elimelech’s statements continued to reporters with: “I am also encouraged by the trading momentum we have shown through the year-end, reflecting continued optimisation of our marketing spend, enhancements to our customer service, improvements in our proprietary technology platform and additional cost optimisation. Looking forward to 2020, we are confident of the prospects for the Group as we focus on further strengthening our customer offering and market positions, thereby delivering growth and further strong shareholder returns.”
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