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May 7 2013

elb2A slightly longer bulletin as usual due to the US being at work while the UK and the Orthodox world had the day off yesterday and it is good to see encouraging numbers from CBOE while they remain cautious short-term about their IT.

Elsewhere, various nuggets of deal news such as LSE making a foray to pick up a secondary platform – not a bad idea given that many such platforms can be found around the world and potentially offer good value.

Meanwhile, Betfair are keen to ward off the challenge of a private equity buyer but don’t forget the key founders still have substantial influence which is always going to make a takeover difficult to achieve…

Without further ado, there are plenty of stories today, so here they are:

Public Markets

CBOE Q1 profit beats Street as stock-index options zoom

Reuters

CBOE Holdings Inc, which runs the oldest U.S. stock-options trading venue, said on Friday that first-quarter earnings rose on a surge in trading in its lucrative stock-index options.
Net income at the operator of the Chicago Board Options Exchange rose to $41.8 million, or 48 cents a share, from $32.9 million, or 37 cents a share, a year earlier.
Excluding accelerated stock-based compensation expenses, the profit was 50 cents a share, better than 47 cents that analysts expected, on average, according to Thomson Reuters I/B/E/S.
See the results here

CBOE outage won’t limit listing of stock-index options: new CEO

Reuters

The Chicago Board Options Exchange outage that blocked access to contracts on two of the U.S. stock market’s most-watched indexes for a half day last week will not threaten the exclusivity of the contracts for CBOE Holdings Inc, its incoming chief executive said Friday.

CBOE defers start of extended trading day after recent outages

Reuters

CBOE Holdings Inc (CBOE.O) will defer the planned launch of a longer trading day for one of its most lucrative and popular products after software changes led to two outages in recent weeks.

Value of NYSE/ICE Proposed Deal Surpasses $10 Billion

Wall Street Journal

The value of the planned deal by IntercontinentalExchange Inc. to buy NYSE Euronext passed $10 billion Friday as both stocks hit 52-week highs.
The indicative valuation is based on the cash-and-stock offer made by ICE in December and used by the Atlanta-based company to track its progress. ICE also made a cash-only offer.

LSE on Target to Win Italian Bond Platform EuroTLX – ($ subscription required)

The Wall Street Journal

The London Stock Exchange Group (LSE.LN) is set for victory in the battle to acquire an Italian retail bond platform, underlining a wider shift by exchange operators into the lucrative–and increasingly electronic–fixed-income markets.

EuroTLX trades retail-sized government and corporate bonds and is jointly owned by UniCredit and Banca IMI, the investment bank of Intesa Sanpaolo Group. The LSE is to pay about EUR40 million for the platform, with the deal “close to closing,” according to one source.

EU rules risk driving London Metal Exchange to Hong Kong -brokers

Reuters

Companies using the London Metal Exchange say new EU rules for financial markets after the 2008 crisis may prompt it to quit Britain’s capital after nearly 150 years for Hong Kong, home of its new owner.
The bloc’s European Market Infrastructure Regulation (EMIR) aims to bring clarity to opaque derivatives markets with mandatory clearing, reporting of contracts to trade repositories and, in some cases, higher capital requirements.

SGX And China Beijing International Mining Exchange Collaborate To Develop Iron Ore Market

Singapore Exchange (SGX) and China Beijing International Mining Exchange (CBMX) have signed a Memorandum of Understanding (MOU) to cooperate in the development of both Chinese and international iron ore markets. The agreement was signed in Singapore at the Singapore Iron Ore Week 2013, between Dong Chaobin, President of CBMX and Magnus Böcker, CEO of SGX.

Mexican Stock Exchange Raises Stake in Lima Bourse to 8.4% – ($ subscription required)

Wall Street Journal

MEXICO CITY–The Mexican Stock Exchange said Friday it has accumulated via a subsidiary an8.4% stake in the Lima Stock Exchange.

Private Markets

Betfair may pay shareholders $218 mln to fend off CVC-report

Reuters

Online gambling firm Betfair is considering paying its shareholders 140 million pounds ($218 million) to fend off a hostile takeover from private equity firm CVC Capital Partners, the Sunday Times newspaper said.

Betfair boss ignores cue to hand back cash but plans cost-cutting

Telegraph.co.uk

The betting exchange, facing an 880p-a-share bid approach from the private equity firm CVC, will use its end-of-year trading statement to detail why the board last month rejected the mooted £912m offer from the buy-out house best known for its ownership of Formula One.

Betfair flatly dismissed the approach as “highly conditional” and one that “fundamentally undervalues the company and its attractive prospects”.

Nigeria to launch derivatives market in 2014 to increase tradable products

StarAfrica.com

The president of the Nigerian Stock Exchange (NSE), Aliko Dangote, said Nigeria would soon be the gateway to African capital markets with the launch of derivatives market in 2014 to increase the number of tradable products.

Second commodity exchange opens in Vietnam

The Voice of Vietnam

The Ministry of Industry and Trade on May 3 issued a licence to the INFO Commodity Exchange (INFO) owned by Ocean Group.
The INFO exchange, the second of its kind in the country, will trade in steel, rubber, coffee and agricultural goods.

Indexes

S&P 500 Buyback Index Launched By S&P DowJones

S&P Dow Jones Indices announced today the launch of the S&P 500® Buyback Index which is designed to measure the performance of the top 100 stocks with the highest buyback ratio in the S&P 500.

Technology

NASDAQ OMX Launches WorkSpace

MarketWatch

The NASDAQ OMX Group, Inc. (NASDAQ:NDAQ) today announced the launch of WorkSpace, a new cloud computing platform that will expand the company’s Corporate Solutions client base and enter the burgeoning virtual data room (VDR) market.

The Nigerian Stock Exchange’s new trading platform to start by Q3

The Nation

The Nigerian Stock Exchange’s (NGSEINDX’s) Nasdaq OMX Group Incorporated (NDAQ) trading platform will be operational by the third quarter of this year, the Chief Executive Officer, Oscar Onyema, has said. The system is being tested, the CEO said last week in an interview in Lagos.

Deutsche Börse creates new business segment for IT and market data

Automated Trader

Frankfurt – Deutsche Börse said it had formed a new segment called Market Data + Services, which will combine a data and analytics unit with external technology and connectivity services as part of a drive to expand product and service offerings.

Betfair selects VMware vCloud to speed app development

ComputerworldUK

Online betting exchange Betfair has implemented VMware’s vCloud as its attempts to redefine its IT department as a ‘service broker’, delivering virtualised environments to its development team through software defined data centre tools.

Products

BOX Exchange Gets SEC OK to Trade Jumbo S&P 500 ETF Options

Bloomberg

BOX Options Exchange, the third- smallest of 11 U.S. options venues, will be the first to begin trading larger-size contracts on the most-active U.S. equity derivatives product, according to a company executive.

NASDAQ, World Steel Exchange Marketing team up to offer US futures

Platts

A partnership that NASDAQ OMX Group and World Steel Exchange Marketing announced Monday will start offering four US steel futures products in fourth- quarter 2013, the companies said. The futures will feature both finished steel and steel scrap products.

China’s Zhengzhou Exchange to launch silicon alloy futures

Platts

China’s Zhengzhou Commodity Exchange in the central Henan province has secured government approval to launch new futures contracts for ferrosilicon and silicomanganese, an exchange official confirmed Monday.

Ferrosilicon and silicomanganese are the most commonly used bulk alloys in steelmaking, the exchange said in explaining why it started with them.

Crowdfunding

Crowdfunding set to make mark on investing landscape

Boston Globe

Gathering small sums of money from a large number of people online — known as crowdfunding — is poised to take off in the investing world, with backing from Washington policy makers who see it as a chance to involve the masses in an arena dominated by big Wall Street firms and the super-wealthy.

In Crowdfunding We Trust?

Under30CEO

Crowdsourcing, a relative new term coined by Jeff Howe, is becoming an emerging trend in the marketing world. From Facebook translations and Wikipedia collaborations to Pepsi can design contest, crowdsourcing is the act of receiving contributions such as ideas or services from a large population of people (usually online) instead of from hired employers. This allows participants to feel the power of involvement while companies get publicity for a product and free ideas from the public. Crowdfunding, a branch of crowdsourcing, is currently reaching a wide audience by providing on online platform for dreamers who wish to receive funds from an undefined population to finance a project or idea.

Crowdfunding’s Disruptive DNA: The Why, How and Who

thecrowdcafe

Investment crowdfunding is going to disrupt and re-shape early stage capital markets. But not only for the reasons you’ve likely heard. There’s more to it.
Crowdfunding is the product of not one, but two, strands of disruptive DNA. The first we’ll call technical disruption, the Christensenian strand of disruption I suspect many are quite familiar with. The second is much different. An amorphous force much harder to define and predict, but just as real, and potentially, much more powerful. This second strand of disruptive DNA is cultural disruption. The consequence of a fundamental shift in how consumers measure worth; placing increasing weight on the meaning of an item or experience, and not just its utilitarian value. A new Consumer is evolving. And she wants more meaning in the things she buys, the things she does, and soon, the things she invests in.

Expert advice: crowdfunding

The Guardian

Crowdfunding is a great alternative to high street fundraising. It offers a great opportunity for charities to re-connect with the people that support them. It can particularly work if charities offer a new level of transparency to supporters through it, showing where money is going.

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