CMC Markets (LON: CMCX) provided a trading update today (Thursday), revealing a decline of 15 percent to 20 percent year-over-year in client trading and investing activity in the first quarter of the ongoing fiscal year.

Trading Activity Drops on CMC Markets

According to the brokerage operator, the slowdown in trading activity between April and June was accelerated by quiet market conditions and aligned with the company’s expectations. These conditions remain persistent at the start of the second quarter of the fiscal year as well.

However, CMC highlighted that a stronger interest income offsets the weaker trading activity in the quarter. The overall net operating income of the company came “at a similar run rate to the same period last year.” Further, other metrics like client money, assets under management, and active clients across CMC’s trading and investing business remained “robust.”

Brokers Benefit from Interest Rates

London-headquartered CMC is not the only broker to benefit from strong interest rates. IG, another big name in the retail brokerage industry, witnessed a declining trading revenue for the fiscal period of 2023, but its overall revenue increased due to a windfall gain from interest rates.

The CMC closed the fiscal year 2023 ending in March with a net income of £288.4 million which is 2 percent higher year-over-year. Its net trading revenue from CFDs and spread betting increased only 1 percent to £233.1 million, whereas the net revenue from investing stream fell 21 percent to £37.9 million. However, It generated £13.9 million from interest income, compared to £0.8 million in the previous year.

“Progress towards new business growth across all platforms and geographies continues as expected,” CMC noted in the latest trading update.

“Over the next six months, the Group is on track to launch cash equities for institutional clients, and OTC options and listed futures across our various platforms, which will allow our clients better opportunities to trade and hedge existing portfolio positions. Invest UK will be launching SIPPs and mutual funds, whilst Invest Singapore will initially offer equities, and ETFs.”