LeapRate Exclusive… LeapRate has learned via regulatory filings made in Norway and the UK that Norway’s central bank, Norges Bank, has taken a 3% equity position in the shares of UK online Forex and CFDs broker CMC Markets Plc (LON:CMCX).
The Norges Bank stake in CMC consists of 8.77 million shares, worth about £9.6 million (USD $11.9 million).
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.
The Norges Bank investment in CMC Markets was upped to 3% in late January, soon after CMC’s share price was cut nearly in half after new stricter rules were unveiled by UK financial regulator The FCA for Forex and CFD brokers.
Since the FCA ‘bombshell’ was dropped, CMC reported fairly weak financial results for the end period of 2016. Fidelity Investments sold down some of its stake in the company, although Goldman Sachs, CMC’s second largest shareholder after founder and CEO Peter Cruddas, has remained with its 5% holding.
CMC Markets share price, IPO to present. Source: Google Finance.