April 11 2016

elb2A busy week in prospect beginning with BM&F Bovespa clinching CETIP having sold their CME stake last week. Elsewhere, ICEX secures USD 37.5 million valuation for startup commodity exchange in the competitive Indian marketplace as NET Energy becomes full exchange in Calgary and Dar Es Salaam prepares for self-listing. DB1 finding its anschluss of equals hits some scepticism in Germany while XavRol’s previously discussed remarks continue to reverberate around the parish.

…Looking to the bright future, just over a week to go to the ICDA Blockchain conference with a cornucopia of great names, including Veronica Augustsson of Cinnober, Hirander Misra of GMEX, Fredrik Voss of NASDAQ, Mark Hemsley of BATS and Peter Randall (SETL), not forgetting old friends such as Brian Donegan from the Isle of Man government and Scott Riley amongst many great names!  To qualify for a GBP 320 discount ticket (normal price GBP 695) use the code “YOUNG320” to claim your discount here.

Also I am speaking at an I-Cham Breakfast, in Dublin, Ireland, discussing investment in CEE & SEE markets  Thursday April 21st. On my travels, I look forward to the various private events in the next week, good to be able to deliver some briefings on a range of exchange, fintech and general investment topics…

Public Markets

BM&FBovespa To Buy Cetip After Two Failed Bids

Denyse Godoy – Bloomberg

After selling its 4% stake in CME, BM&FBovespa agreed to pay 30.75 reais per share of Cetip plus 0.8991 BM&FBovespa stock. Both boards approved the offer, which will give Cetip shareholders a stake of about 12% in the exchange operator. Shareholders and regulators still need to approve the deal.

Material Fact: Combination Of BM&FBOVESPA – Bolsa De Valores, Mercadorias E Futuros And CETIP S.A. – Mercados Organizados

MondoVisione

QV Premium: Exchange Deals Brief.

PLY: Good acquisition for BM&F Bovespa will the new brand be BBC?

 

UK Competition Watchdog Opens Inquiry Into Tullett Prebon – ICAP Deal

Maria Nikolova – LeapRate

QV Premium: Exchange Deals Brief.

PLY: This ought to be a formality although of course past U competition regulators have form in the absolutely moronic qv the time LME was restricted trading electronically due to a complaint from a competitor.

 

DB1-LSE Tie-Up Hits Opposition (subscription)

Guy Chazan – Financial Times

Opposition is growing in Germany to DB1’s planned $20bn merger with LSE, amid mounting concern about the consequences for the merged entity if Britain votes to leave the EU.

“It’s a problem if the headquarters of the holding company will be outside the eurozone and, if Brexit happens, outside the EU,” said Ulrich Caspar, a member of parliament in the German state of Hesse, where Frankfurt is located. “The terms are detrimental to the development of Frankfurt as a financial centre.”

PLY: After the hype, the sense of perspective begins to pile in. Nothing I didn’t tell you weeks ago happening here. Give it another few weeks and they may have caught up with what I said in Premium at the time the hype began too…

Rolet’s Sniping Betrays Worry About Flank Attack From US On LSE Merger (subscription)

David Wighton – Financial News

PLY: See here, here & here. Nothing more to add for the time being.

LSE’s Rolet: No Post-Deal Sell-Off For French, Italian Units (subscription)

Tim Cave – Financial News

Xavier Rolet has nursed LSEG back to health in part through a series of shrewd acquisitions. He doesn’t want his crowning deal – a merger with DB1 – to unpick that legacy.

PLY: “Merger of Equal Desperation” & “crowning sell-out” I think are the phrases I would prefer here.

The Stuff That Makes For Great Bourses

Goh Eng Yeow – The Straits Times

Big players are going beyond just dealing in stocks and shares, commodity futures.

QV Premium: DB1-LSE Merger Brief.

PLY: Good thoughtful article.

 

Eurex Entices Brokers Not To Desert Derivatives Clearing (subscription)

Tim Cave – Financial News

 

LCH Wins Regulatory Approval In Japan (subscription)

FOW

 

HKEx Unveils New Guidelines For Companies Facing Allegations Of Fraud Or Other Misconduct (subscription)

Enoch Yiu – SCMP

Hong Kong-listed companies which are alleged to have fraud or false accounting problems will need to issue clarification announcements or their shares must be suspended from trading.

HKEx Guidance Letter here.

Private Markets

Net Energy – Canada’s Newest Exchange

Marketwired

Calgary-based Net Energy has gained approval from the Alberta Securities Commission for recognition as a crude oil derivatives exchange.

PLY: “This order culminates a process with our Canadian regulator that was initiated in 2012, and it provides a stepping stone towards registration as a marketplace in the US.” Doesn’t sound like the speediest process to me but maybe it is the phrasing…

 

Indian Commodity Exchange Raises Rs. 50 cr (USD 7.5m); Plans June Launch

The Hindu Business Line

The Indian Commodity Exchange (ICEX) has raised Rs. 50 crore (USD 7.5m) through a rights issue and expects to start operations by June. Reliance Capital holds 26% stake in the exchange, while other stakeholders include MMTC, Indian Potash, Kribhco, and IDFC Bank.

The bourse said it has completed a maiden rights issue of Rs. 50 crore (USD 7.5m), which was fully subscribed at 100% premium to the face value, valuing the bourse at Rs. 250 crore (USD 37.5m).

PLY: Very interesting valuation for a start up exchange in a highly competitive market: UD 37.5 million.

 

Tanzania: DSE Self-Listing Around the Corner

All Africa

Dar es Salaam SE (DSE) public offer and self-listing has reached a final stage and waiting the capital market regulator approval. In Africa, Nairobi Securities Exchange and Johannesburg SE are self listed.

 

With New Trading Platform, TruMid to Launch ‘On-Demand’ Trading Sessions (subscription)

Anthony Malakian – Waters Technology

TruMid president Mike Sobel previews the venue’s soon-to-be-launched proprietary trading platform, which will feature on-demand trading sessions, in addition to its traditional session-based “swarms.”

 

MEX, RSEBL Sign Agreement

Republica

Mercantile Exchange Nepal (MEX) has signed an agreement with Royal Securities Exchange of Bhutan (RSEBL).

Dividend News

Euronext announced the dividend payment schedule for 2016: yearly gross dividend €1.24, subject to shareholder approval at the company’s AGM on 12 May 2016. Record date 19 May, payment date 20 May 2016.

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX flat, FTIL up 1%.

NSEL Scam: Bombay HC Panel Charges Brokers With Mis-Selling Of Products

Business Standard

With the High Court Committee (HCC) appointed by the Bombay High Court recommending audit of books of leading brokers in the NSEL scam, suspicions are being raised over brokers’ role in commodity trading at the now-defunct spot commodity trading exchange. Trade sources do not deny the involvement of black money into the system.

NSEL Scam: Whiff Of Black Money

TOI

Investigators have come across fresh evidence suggesting routing of black money by sister concerns and associates of various brokers who had traded on the platform of the spot exchange.

PLY: I haven’t mentioned the classic scene with the police chief musing aloud recently on illegal activities in Rick’s bar, for some reason this appears an apposite moment…

Products

Euronext Says Working On Black Sea Wheat Futures

Sybille de La Hamaide – Reuters

PLY: Interesting future for a big export zone…

 

ESMA Publishes New Q&A On CFDs & Other Speculative Products

MondoVisione

 

China To Open Up Iron Ore Futures To Foreign Investors

Reuters

The Dalian exchange is applying for approval from CSRC to allow offshore investors to directly trade in the raw material, said Jing Mingyi, a manager with the exchange’s industrial products department.

 

Cross-Currency Trading: Taking The Next Steps Forward

Jayant Manglik – Livemint

While everyone thought it would take a year or more to operationalise, RBI and Sebi moved with speed and are set to launch cross-currency derivatives trading in three of the most liquid pairs in the world—US dollar versus euro, British pound and Japanese yen.

PLY: Good for RBI & SEBI, “moved with speed” is not always something one hears of the Indian public sector…

Indexes

FTSE Mondo Visione Exchanges Index Up A Stonking 6.7% In March As Battle For LSEG Heats Up

MondoVisione

 

ESMA Publishes Responses To The Discussion Paper Benchmarks Regulation

MondoVisione

Career Paths

Reuters reports that the total compensation of CME CEO Phupinder Gill FY 2015 was $4.9 million vs $5.4 million in FY 2014.

PLY: He deserves every penny, he is cheap compared to some of his peers.

CRI reports that CSRC has appointed Wang Jianjun as the new GM of Shenzhen SE, replacing Song Liping. Wang Jianjun has been with the CSRC for the past 7-years.

Securities Commission Malaysia (SC) announced the appointment of Kamarudin Hashim and Chin Wei Min as Executive Directors with effect from 4 April 2016.

HM Treasury has announced that Her Majesty The Queen has agreed, on the recommendation of the Chancellor & Prime Minister, to appoint Sam Woods as Deputy Governor for Prudential Regulation & CEO of the Prudential Regulation Authority (PRA).

Speakerbus has recently hired Danson Lam from Etrali (now part of IPC) to join the Asia-Pacific new business team.

Financial Calendar

11 – 17.04 – Coinsilium’s Blockchain Tech Lab at Runway East at Finsbury Square, London  

19 – 20.04 – ICDA Blockchain Conference

20.04 – SGX Q3 Results FY2016  

21.04 – I-Cham Breakfast, in Dublin, Ireland, Guest Speaker Patrick L Young discussing investment in CEE & SEE markets  

New! –  27.04 – Nasdaq Q1 2016 Resultspress release

New! – 05.05 – ITG Q1 2016 Results press release

All forthcoming exchange / investment related events are now listed in our Events page.

Analyst Notes

CBOE Stock Rating Noted As “Market Perform” By Keefe Bruyette & Woods –  $68.00 TP

A full table of current analysis can be found on our Analyst Ratings page which is updated daily.

Other stories

CFTC’s Division of Market Oversight Issues Further Actions Concerning Implementation of the Ownership and Control (OCR) Final Rule

CFTC

CFTC’s Division of Market Oversight Issues Time-Limited No-Action Relief Regarding Masking Certain Information Reportable under the OCR Final Rule

CFTC

 

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