LeapRate Exclusive… LeapRate has learned via regulatory filings made in Norway and the UK that Norway’s central bank, Norges Bank, has increased its position in UK online Forex and CFDs broker CMC Markets Plc (LON:CMCX) to 4%, making Norges one of CMC’s largest shareholders.
The Norges Bank stake in CMC consists of 11.73 million shares, worth about £13.2 million (USD $16.3 million). We last reported in February that Norges had held a 3% interest in CMC, or 8.77 million shares.
So what is a central bank doing taking a position in a publicly traded company such as CMC?
While having traditional central banking responsibilities in Norway such as financial and price stability, Norges Bank also manages The Government Pension Fund of Norway, a multi-asset investment fund which at about $900 billion is among the world’s largest sovereign wealth funds.
A separate unit, Norges Bank Investment Management, handles the operation management of the fund which consists of equities, fixed income and unlisted real estate.
Originally known as The Petroleum Fund of Norway, the fund’s main role is to invest surplus wealth generated from Norwegian petroleum income.
We also recently reported on another Norges investment in an online company, a 3% position in Skrill and NETELLER parent Paysafe Group, worth about £60 million.
The Norges Bank investment in CMC Markets marks another major global investment fund taking making a bet on a turnaround in the shares of online UK brokers, which were hit hard late last year after the FCA proposed new strict rules governing Forex and CFD trading. BlackRock – the world’s largest asset manager – recently took a 10% position in IG Group Holdings plc (LON:IGG). Morgan Stanley increased its position in #2 UK CFD broker Plus500 Ltd (LON:PLUS) to 6.5%, while UK investment manager Odey Asset Management LLP, which has long had a significant stake in Plus500, increased its position to above 23%.
CMC Markets went public in February 2016 at an IPO price of £2.40 per share. Its shares now sit at about half that figure.
CMC Markets share price, IPO to present. Source: Google Finance.