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FTSE in-depth: Spreadbetter abandons aim

By Geoff Foster for MailOnline
Updated: 04:23 EDT, 11 February 2011

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CMC Markets, one of the world's leading online contract for difference (CFD) providers and financial spread betting firms, sent shockwaves through the Alternative Investment Market (AIM) recently when it said it would be no longer trade in AIM shares.

Foster:

With around 50% of AIM market positions, at any one time, possibly held via CFDs and around 20% with CMC, dealers feared that the decision could have a major impact on the physical AIM market.

CMC Markets stopped trading in AIM stocks on January 21. Clients were no longer able to open new positions and any bets that remained open would have to be closed out today.

CMC said it wanted to focus on core liquid markets and all of the major markets after last year stopping trading in stocks below a certain market capitalisation.

Ahead of D-Day today, and amid speculation that many of CMC's clients were busy closing out their positions to sign up with rival spreadbetting giant IG Group (5.9p off at 463.9p), some old speculative AIM favourites came under selling pressure.

North Sea explorer Encore Oil cheapened 4.5p to 122.5p, after 118p, and Gulf Keystone Petroleum 7.5p to 173.25p, while Regen Therapeutics eased 0.25p to 1p and Infoserve 0.125p to 0.625p.

Launched in 1995, AIM has been an overwhelming success, raising almost £24bn for more than 2,200 companies. CMC's desertion is a low blow but it will not be on the canvas for long.

Specialist cancer drug discovery company Sareum, which saw its share price touch 4.79p on Wednesday, eased 0.825p to 1.75p after announcing a placing at 1p to raise £500,000. Funds raised will accelerate its drug discovery programme and the advancement of its leukaemia programme.

Shares of software company @UK soared 6.75p or 57pc to a 52-week peak of 18.5p. Buyers piled on hearing it has been awarded a contract to provide an e-commerce market place to an unnamed local authority and National Health Services partnership.

It was the first local authority and primary care trust to form a partnership, with a single chief executive and joint management team.

Pathfinder Minerals returned to AIM following a reverse takeover of Mozambiquefocused IM Minerals. The close was 1.13p better at 8p. Pathfinder owns two titanium mining licences on the Indian Ocean Coast of Mozambique known as Naburi and Moebase.

Disappointing figures from Diageo (58p off at 1195p) and Rolls-Royce (5.5p cheaper at 650p) got the day off to a disappointing start. Matters were then made worse by publication of poor UK production data and the Footsie just drifted.

It closed 32.3 points lower at 6,020 with the FTSE 250 ending 75 down at 11,721.6. The Bank of England's decision to leave UK interest rates on hold at 0.5% and the amount of quantitative easing at £200bn came as no surprise.

Wall Street didn't help London's cause either, trading almost 80 points lower at the outset on further consideration of techno bellwether Cisco Systems' bearish overnight news on margins. Stronger-than-expected weekly jobless claims made no impression.

Software giant Autonomy jumped 35p to 1607p following a UBS upgrade to buy from neutral. Sir Martin Sorrell's advertising giant WPP added 12p at 824p in sympathy with better-than-expected annual results reported by French digital advertising specialist Publicis.

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Chief executive Maurice Levy said: 'The economic climate is more optimistic'.

A Numis downgrade to reduce left Aberdeen Asset Management 12.3p cheaper at 215.9p. The broker is concerned about a slow-down in the fixed income business.

There was no stopping shares of online fashion group Asos as they leapt a further 130p to a record 1890p. Denmark's Bestseller, a major supplier to Asos, this week increased its stake to 203%.

Speculation is rife it will continue to buy stock to take its holding to 29.9%. It last year said it had no intention of launching a full-scale offer.

Racecourse owner Arena Leisure cantered 1.75p forward to 28.5p after winning a contract to provide catering services at the Eton Dorney and Greenwich Park venues for next year's Olympic and Paralympic Games.

Eton Dorney will be home to the sprint canoeing and rowing events, while Greenwich Park will be used for the equestrian and modern pentathlon events. The board estimates that Arena's 2012 net profit contribution from the contract will be in the range of £0.5m to £1m.

Film distribution company Entertainment One, which owns the rights to the Twilight movies, and children's TV character Peppa Pig, firmed 1p to 171.5p after a large overhang of stock was cleared.

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