A new regulatory filing has revealed that the multinational investment management corporation, Blackrock, has acquired just a touch above 5% of the IG Group. Apparently, the recent rise in its share prices and the stagnating FX volatility haven’t affected IG in a material way if we talk stock performance. While many reasons can be attributed to this purchase, this can also be a position aiming to profit from increasing financial markets volatility going forward.
Blackrock has been conservative lately with cash assets growing, which spells that the company is not keen in investing in stock markets at this point in time and this is confirmed by the ongoing correction in share prices across the Euro Zone. The move in itself has increased the previous stake that Blackrock held from 4.3% to 5.01%. The round numbers suggest that this is a strategic investment.
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The reporting threshold was barely breached, giving out the position which Blackrock holds. As of right now it amounts to 18,313,343 shares of IG Group’s float or £113.5 million ($191 million). With FX volatility hovering near all-time lows, despite the August pickup in activity it is still unlikely that we are going to see a substantial spike during the summer. However, as the ECB’s President Mario Draghi highlighted at his press conference today, increasing geopolitical risks can easily change that.