Good morning, it's Paul here.

Please see the article header above, which shows the companies I intend reporting on today - quite a lot to cover, so it would be helpful if we could keep reader requests to a minimum.


FCA review of CFDs

This is an interesting RNS. It's the FCA's findings from its review of CFD/Spread Bet companies. The prices of spread bet company shares have dipped this morning in response to this report, which is critical of the sector, although it doesn't name the worst offenders.

What puzzled me is that, at the start of this RNS from the FCA it says;

We recently carried out a review of the CFD market. It looked at where firms offer these complex, high-risk instruments to retail customers on either an advisory or discretionary (including limited power of attorney) portfolio management basis.


As far as I'm aware, the vast majority of CFD/Spread Bet accounts are execution-only, hence would not fall within the scope of this review. Therefore, maybe it's a storm in a teacup, and could be a buying opportunity? There are some nice dividend yields available, e.g. with IG Group (LON:IGG) it yields just over 4.5%, and CMC Markets (LON:CMCX) (in which I have a very small long position) yields about 5.0% currently. These companies have very strong balance sheets too.

The FCA is very critical of the processes, but short of any draconian penalties, it's difficult to see how this will actually harm earnings at these companies.


Crypto-currencies (again!)

Spread bet companies must be coining it in (geddit?!!) with crypto-currencies. I know personally that I've handed wads of money to IG on a plate, punting unsuccessfully on Bitcoin (no current position). I've now given that up as a bad job.

The trouble with these ridiculous crypto-currencies, is that they're so volatile that you just constantly get stopped out, if you punt on them via spread bets. So they're ideal (i.e. highly profitable) instruments for the spread bet companies to offer to clients, as the provider is usually the big winner, scooping profits from people who are long or short, as prices violently spike up & down. Both long & short punters tend to have very strong opinions on the value (or not) of crypto-currencies,…

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