Plus500 (LSE: PLUS), EVRAZ (LSE: EVR), Mecom (LSE: MEC) and JKX Oil & Gas (LSE: JKX) are some of the market’s biggest fallers today, with Plus500 falling as much as 13% in early trade. Here are the reasons behind today’s declines.
FCA investigation
AIM-listed Plus 500 is falling today, after speculation that the CFD provider was facing an investigation by the FCA into how the company signs up new customers.
Unfortunately, this is not the first time the financial services provider has seemingly had a brush-in with regulators. The company was fined a total of £205,000 during 2012, for failing to report correct data for more than 1m transactions. Regulators found that the company had failed to set up appropriate reporting systems.
However, rumours of this latest investigation appear to be focused on Plus’ money-laundering reporting standards, although Plus 500 has insisted that the company is fully compliant with money-laundering rules Nevertheless, unlike peers, the group does not check on a client’s identity when they open an account, checks are only performed when a client withdraws funds.
Russian steel
Russian steel producer, EVRAZ is falling today after the company chalked up an impressive rally at the end of last week. It seems as if investors rushed to get hold of the company’s shares following speculation that the group was planning an initial public offering of its North American arm; Evraz North America.
As of yet, there’s been no definitive commitment from the company’s management that an IPO is going ahead. Management has stated that it’s committed to its business in North America and a separate IPO would allow the group to shake off Russian ties. Two separate groups would give EVRAZ more flexibility in how it operates.
Competition concerns
Meanwhile, Europe focused publisher, Mecom is sliding after the company announced the Dutch Competition Authority has decided that the recommended cash offer, announced on 30 June 2014 by De Persgroep Publishing for the entire issued and to be issued share capital of Mecom, requires further investigation.
De Persgroep has offered 155p per share for Mecom but Friday’s news and today’s declines indicate that the deal could be dead in the water. De Persgroep is required to make another request for an acquisition licence under the Dutch Competition Act. A final decision is not likely to be made for another 13 weeks.
Emergency taxation
And finally, Eastern Europe-focused oil & gas group JKX, is sliding today after the company announced that it was cutting capital spending, to save cash as emergency taxation measures within Ukraine hit profits.
Specifically, emergency legislation introduced by the government of Ukraine to fund the ongoing conflict in the East of the country, has sent JKX’s production taxes upto 55%. As a result, the company has reduced capital spending by $10m to offset additional production tax costs.
