August 03 2015

 elb2Athens open and falling, Channel Islands walks away from deal to buy GXG assets, Citadel in China short selling probe, Euronext to buy back shares, LCH partners with CLS to settle forex options, Mt Gox founder arrested after epic exchange collapse, Playtech vote on Plus 500 acquisition looming…

Public Markets

CBOE Q2 2015 Results

CBOE

vs Q2 2014: operating revenue $148.7 mln, up 3%, GAAP net income allocated to common stockholders $44.6 mln, up 5%, diluted EPS of $0.54, up 8%.

PLY: It’s funny, CBOE used to have such a global footprint when run by inveterate traveller Bill Brodsky. Nowadays they seem to have become a somewhat more insular Chicago business.

Fidessa Interim Results For Period Ended 30th June 2015

Fidessa

Revenue GBP 145.9 mln, up 6%, operating profit GBP 19.2 mln, down 2%

PLY: Fidessa continues to struggle against a difficult background for large legacy vendors in a time of increasing innovation.

Hellenic Capital Market Commission Announcement: Reopening Of Markets

MondoVisione

Reopening Of Athens SE

MondoVisione

Athens Stock Market Tumbles After Reopening (subscription)

Kerin Hope & John Aglionby – Financial Times

PLY: Short selling ban or no, Athens is off big time but still above the -23% lows seen after the open…

Playtech Shareholders To Vote On Plus500 Deal On August 19th

Maria Nikolova – LeapRate

Playtech shareholders will have their say on the recommended £459.6 million acquisition of Plus500, after the deal got the approval of broker’s shareholders last month.

PLY: Note founder Teddy Sagi owns 33.6% of Playtech which gives the deal considerable impetus!

QV Premium Plus500 Turmoil & Deal – Brief – Part 2.

Euronext To Start To Purchase Own Shares

Euronext

To hedge price risk arising from the employee share plans for 2014 & 2015, Euronext intends to purchase its own shares for up to initially 317,195 shares between August 3, 2015 and September 30, 2015.

LME Refines Ring Closing Price Procedures

LME

LME Confirms Wider Access To Electronic Platform; Rejigs Close

Reuters

LME launched a consultation in May on proposals to boost liquidity by making it easier for new members, including U.S. speculators, to have direct links to its trading platform LMEselect.

As of Aug. 10, category 3 and 4 members will be allowed to trade on LMEselect in addition to category 1 and 2 members.

ICE Benchmark Administration Publishes Second Position Paper on the Evolution ICE LIBOR

ICE

ICE Benchmark Administration (IBA) published a second position paper on the evolution of ICE LIBOR. Comments from all LIBOR stakeholders should be submitted to IBA by October 16, 2015.

NB First position paper published in October 2014, with feedback statement published in May 2015.

China’s Stock Markets: Nearly 25 Years Of Wild Swing (subscription)

Chao Deng – Wall Street Journal

In the two years after China opened its stock markets, shares soared 1200% and twice fell by half. Investors seeking IPO shares rioted, overturning cars and smashing windows, leading police to use tear gas and fire their guns in the air to quell the disturbance.

China will celebrate the 25th anniversary of the opening of its stock markets later this year, and not much has changed since their founding.

PLY: Rarely has the old London fx option broker epithet “strap in billies” been more pertinent than in the genuinely rollercoaster ride of China’s stock markets.

Citadel Account Frozen Amid China Algorithmic Trading Probe

Bloomberg

Citadel Unit In Short-Sell Probe

Mira Ding – The Standard

Citadel Shanghai Trading confirmed that its account has been restricted, but stressed it has been keeping active and positive communications with regulators and would continue to operate the business legally.

Read our Premium China Capital Markets Transformation Brief – Main File.

Private Markets

CISE Ceases Discussions With GXG’s SME Marketplaces

CISE

The Channel Islands Securities Exchange (CISE) has ceased discussions regarding the acquisition of the European marketplace for SMEs, the Danish-based GXG Markets A/S (GXG).

It was announced last month that an in-principle agreement for the transaction had been agreed.

However, the CISE has now decided not to proceed any further.

Read our Premium Exchange Deals Brief.

PLY: Clearly this leaves GXG in an even more precarious position. Precious time has passed and other platforms have been actively wooing GXG stocks to their markets for some weeks now. Hopefully there is a silver lining for GXG.

Fidelity National In Exclusive Talks To Acquire SunGard

Alex Sherman – Bloomberg

Fidelity National Information Services is in exclusive talks to buy SunGard Data Systems in a deal with an enterprise value of more than $8.3 billion. While a deal isn’t imminent, Fidelity would pay with a mix of cash and stock, 50% cash and 50% stock.

SunGard is owned by seven private-equity firms, including Silver Lake Management, Providence Equity Partners and KKR & Co. SunGard filed to go public in June. The company’s long term debt was $4.67 billion at the end of March, according to regulatory filings, while cash was $555 million.

Read our Premium SunGard IPO Brief.

PLY: Interesting that Sungard would chose a trade deal, which suggests they may not have a wildly exciting IPO path, as a legacy vendor with market power but a hotch potch of product which I am not sure ages well over the next decade as the next generation of digital products pushes forward..

Bats’ Hotspot Aims For The Sweet Spot (subscription)

Financial News

meXBT Acquires CoinRepublic Expands To Southeast Asia

Bitcoinist

Leader Of Mt. Gox Bitcoin Exchange Arrested In Tokyo

Time

Ex-boss Of MtGox Bitcoin Exchange Arrested In Japan Over Lost $390m

The Guardian

Mark Karpeles, 30, is suspected of accessing the exchange’s computer system in February 2013 and inflating his account. If found guilty, the France-born Karpeles could face up to five years in prison, or a fine of up to 500,000 yen ($4,000).

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX flat, FTIL up 2%.

One ID, Many Emails On The NSEL-FTIL Merger

N Sundaresha Subramanian – Business Standard

The Corporate Affairs Ministry MCA on July 24 told the Bombay High Court it has received about 45,000 representations on the proposed merger of NSEL with its parent FTIL. Many of these responses, purportedly sent by FTIL shareholders, are from a single email ID, shareholder@ftindia.com.

MCA has alleged these representations were being deliberately sent in a concerted. However, the FTIL management has been fighting the move, claiming many of its retail shareholders are opposed to this.

Read our Premium NSEL-FTIL Merger Brief.

PLY: Even those somewhat tinged with ‘Shahdenfreude’ in this incident ought to appreciate that FTIL has a right to organise a campaign and aggregate responses which it sends on to the Ministry which proposes destroying common sense corporate governance norms in order to seek an inelegant solution to a problem the blob has fundamentally failed to deal with. That this is reported in the fashion above is testament to the total breakdown in trust which has resulted from the hamfisted administration of Indian markets.

Technology

More Data = Less Layering = Less Crying = More Giggling

Max Bowie – Waters Technology

As any parent of multiple children—and especially twins or more—will know, despite one’s best efforts to bend the space–time continuum, you just can’t physically be in more than one place at the same time, and there’s always one (or more) giggling or crying bundle of energy demanding your attention. But this isn’t the case for traders: not that they aren’t giggling/crying bundles of energy, but rather that a trader can actually be in two places at once—just not legally.

PLY: How Max Bowie manages to make financial data so lively and engaging remains a joy to behold alongside the elucidation he delivers. A journalist genuinely adding value without any spoofing.

Deutsche Bank Shines Light On Blockchain Opportunities (subscription)

Financial News

Response to Esma consultation reveals potential commercial use of distributed ledgers in areas including enforcement and clearing of derivatives contracts.

Products

LCH.Clearnet & CLS Partner To Deliver Settlement For Cleared FX Options

LCH.Clearnet

New service enables clearing of the $275bn a day FX options market, with other physically settled FX products to follow.

PLY: Good move.

CBOE To List VIX ‘Weeklys’ Options Beginning October 8

PRNewswire

China Makes FX Rules Ready For Foreigners To Trade Its Commodity Futures

Reuters

Foreign investors will be allowed to transfer either foreign currency or yuan funds into China to trade in the country’s commodity futures markets.

Former Teenage Soldier Hatches Millions From Chinese Egg Futures

Engen Tham – Reuters

A decade ago Zhang Xiongjie was a teenage infantryman patrolling China’s bleak border with North Korea. Now he stays in swanky hotels and drives a Mercedes Benz CLS – a remarkable rags-to-riches journey achieved in part by dominating one of the most obscure corners of China’s unruly financial markets: egg futures. The story of how he earned so much money, so fast – 600 million yuan ($96.63 million), he says, in 2014 – highlights the casino-like nature of China’s nascent futures markets, and the vulnerability of such markets to a destabilizing rout.

Read our Premium China Capital Markets Transformation Brief – Main File.

SGX Introduces Evaluated Bond Prices

MondoVisione

NSE Extends Concessional Transaction Fee In Currency Futures

The Economic Times

Extended by two months till September 30.

Japan OTC Exchange: First LNG Forward Deal

Reuters

Iran Mercantile Exchange Considers Launching Polypropylene Futures Contract

Platts

Possible specifications for the proposed contract include a lot size of 10 mt and daily price limit of 3%-5% from the opening.

PLY: Fascinating stuff, the sanctions are coming down and already Iran is planning some interesting new derivative derivatives of the energy sector…

Electronic Bond Venues Stuck At Go (subscription)

Financial News

Delays to electronic trading platforms that promise to ease the global shortage of bond liquidity are showing how hard it is to get market participants to engage with such solutions, despite their growing fear of a liquidity crisis.

PLY: Precisely in keeping with what i have long maintained – and in spite of widespread (unjustified) optimism from those in the bond platform bubble, whose confidence appears even more misplaced since the low latency rise and demise of Bondcube.

Read our Premium The Bond Bubble, On Bonds & SEFs, A Bond Market Dilemma, The Bond Platforms Rush BriefPart 1, Part 2.

Thomson Reuters Adds Foreign Exchange Trading Capability Into Eikon For Corporate Treasurers – Thomson Reuters Integrates FXall QuickTrade Into Eikon To Provide Direct Access To Fxall Liquidity And Straight-Through Processing Capabilities

MondoVisione

Financial Calendar

This week

Aug 04 2015- Lending Club Q2 2015 Financial Results

Aug 05 2015

ICE Q2 2015 Financial Results

TMX Q2 Financial Results

Aug 06 2015 – FXCM Q2 2015 Results

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

Analyst Notes

CME “Buy” Rating Reissued By Deutsche Bank – $107.00 Price Target

CME “Hold” Rating Reaffirmed By Keefe, Bruyette & Woods – $102.00 Price Objective

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

 

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