Germany's Federal Financial Supervisory Authority (BaFin) has just slapped an $809,000 fine on the UK unit of US investment management firm BlackRock Inc. The penalty was imposed by the German financial markets watchdog on BlackRock for its failure to file voting rights notifications within the allotted timeframe.
The independent federal institution with headquarters in Bonn and Frankfurt stated on Tuesday that BlackRock Investment Management will be required to pay the fine immediately. The issue stemmed from a violation of a standing rule that required investors to inform regulators within four days if certain stake thresholds are crossed as a direct result of stock selloffs or acquisitions.
In response to the penalty, Blackrock had stated that it was the one that first identified the error and immediately reported it to BaFin. Nevertheless, the company acknowledged its mistake and stated that it accepts BaFin's decision and that it is gals that the matter is now resolved. BaFin revealed that it had originally informed the company about the fine back on April 8.
BlackRock saw its shares tumble this week, falling a further 3.12 percent on Tuesday in New York. Throughout the day the company's shares were trading at a range of $456.23 to $460.00. Over the past seven days, the stock had reached a peak of $484.63 per share and a low of $441.53 per share.
The world's largest asset manager, with over $7.4 trillion in assets under management as of last year, stated that it is expecting darker days ahead, particularly for emerging-market currencies. On Monday, the company downgraded its outlook for developing-nation local debts from overweight to neutral.
According to the BlackRock, one of the main issues is the continued weakening of foreign currencies as their respective monetary authorities use it to absorb the economic shock of the ongoing coronavirus pandemic. Analysts at the company stated that potential capital flight will likely increase in the coming months, further weakening currencies and forcing central banks to increase rates.
The company stated that currencies such as South African rand and Brazilian real could be the most affected among other major global currencies this year. However, it isn't all bad news as the company is expecting a rebound, particularly for Asian equities and credit.
BlackRock is particularly positive on China's prospects as the country gradually restarts its economy after months of stringent lockdown measures. China is expected to roll out a massive stimulus package that could hasten its recovery. This will be positive news of exporters, particularly for EM exporters of bulk commodities.
