February 03 2015

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Great profit rise from DFM as the bickering rages between BGC and GFI while ICE launches no fewer than 63 new contracts, happy scrolling:

A final reminder (until the next one is published!) of our trio of Cinnober videos:

The most fascinating era for capital markets which we are lucky to be witnessing:

The future of money – where is cryptocurrency heading?

What will the launch of real-time clearing at BM&FBOVESPA mean for the industry?

Meanwhile, over in Premium Posts, there are several new Premium Briefs to remind you of various issues in the industry (and don’t forget others such as the BGC-CME-GFI deal file) are updated daily when news arises. Recent briefs include:

IEX India Sale
Virtu Financial IPO
Index Companies Deals
Barclays Index Unit Sale
NY AG – Barclays Dark Pool
FX – CHF Crisis

Our Premium service is now on a real roll – can you afford not to be a subscriber? $120 per user/year and it helps keep EI Free. Subscribe here or email and I will invoice you forthwith.

Public Markets

DFM Q4 Net Profit Rises 31%
Reuters

Dubai Financial Market (DFM) reported a 31% rise in Q4 net profit to 138.2 million dirhams ($37.63 mln) on Monday as trading volumes increased. DFM’s full-year profit rose 167% to 759.3 million dirhams (USD 206.8 mln).

DFM press release here.

GFI Group Board Comments On BGC Tender Offer
GFI Group
BGC Partners Urges Shareholders To Disregard GFI’s Odd Claim That It “Will Explore Strategic Alternatives” And Promptly Tender Into The Best And Only Offer Available
PRNewswire
BGC Has The Scale To Make GFI Deal Work: Lutnick (Video)
Bloomberg

PLY: For now it boils down to a war of words: GFI espouses that old 1970’s mailshot teaser “Take no action now” in anticipation of a better offer while BGC notes that a Howard in the hand could be worth two in the bush…

Read our Premium brief BGC-CME-GFI.

ICAP To Face EU Fine Over Yen Cartels (subscription)
Alex Barker & Philip Stafford – Financial Times

ICAP faces an EU fine this week for allegedly facilitating cartels on yen-denominated inter-rate benchmarks.

The world’s largest interdealer broker has strongly denied wrongdoing, refused to settle and has informed the European Commission that it will appeal any fine as wrong in fact and law.

Nasdaq Launches Lower Access Fee Program (subscription)
Angela Chen – Wall Street Journal

Nasdaq on Monday began a four-month program that lowers the access fees for 14 stocks, in hopes of collecting data to analyze how this change affects market quality.

For these 14 stocks, the access fee is five cents, instead of 30 cents, per 100 shares.

Nasdaq press release here.

ICE Benchmark Administration To Administer The LBMA Gold Price From March 2015; LBMA Gold Price To Replace The London Gold Fix
Business Wire
Chinese Banks To Join New Gold Fix From March (subscription)
Henry Sanderson – Financial Times

ICE and London Bullion Market Association (LBMA) announced that the new LBMA Gold Price, which replaces the long established London Gold Fix, is expected to be launched in March 2015 administered by ICE Benchmark Administration (IBA) who won the process tender last November.

The replacement fix hopes to attract at least 11 members, including Chinese banks for the first time.

Hong Kong-Shenzhen Stock Through Train On Track (subscription)
Enoch Yiu – South China Morning Post

Hong Kong’s top finance official and regulator on Monday said preparations were under way to complete a direct stock exchange link-up between Hong Kong and Shenzhen.

HKEx expects a Shenzhen ‘through train’ (previously discussed here, here, here, here, here and here) to launch in H2 this year.

How The NYSE Mid-Day Auctions Would Work (subscription)
Bradley Hope – Wall Street Journal

NYSE is planning to introduce a five-minute midday auction (reported yesterday) to their markets, according to a new filing.

Other details:
* The auction would take place daily and last five minutes at some point between 11 a.m. and 2 p.m.;
* Floor-based market makers will facilitate the auction, similar to how the open and close auctions work;
* Stocks with daily trading volume of 1,000,000 or fewer shares will be eligible for the auction;
* During the auction period, NYSE will publish a “zero quote” on the public and proprietary data feeds.

BM&FBOVESPA Institute & BrazilFoundation Announce The Creation Of A Social Joint Venture
MondoVisione

PLY: A transformative philanthropic partnership…

Private Markets

NSE Extends Fee Discount For Currency Futures, Equity Options
The Economic Times

NSE has extended discount of upto 50% in transaction charges for trading on its currency derivatives platform and in equity options segment for two more months.

EI reported yesterday that BSE has lowered its fees in the currency derivatives markets.

Why The Government Should Do More Than Promote Gift
Mobis Philipose – Livemint

Gujarat International Finance Tec-City Co. Ltd (Gift), being developed as India’s first international financial services centre, is suddenly in the limelight. A number of financial services firms have announced plans to set up office there. BSE is the latest, having signed a MoU with Gift SEZ (special economic zone) to set up an exchange (reported here) for transactions by international entities. It’s not clear what products will be transacted and how exactly the exchange plans to attract international participants to the new platform.

PLY: Good article from Mobis Philipose. Given the sheer dysfunction of many aspects to the industrial-regulatory complex, it would make sense to sort those issues at least in tandem with developing GIFT with a view to attracting foreign investors who remain wary given the mess of Jalan, NSEL et al.

Italian Borders Market Coupling To Launch On 24 February 2015
MondoVisione

The Italian Borders Market Coupling Project is scheduled to launch on 24 February 2015. The Go-Live is subject to the final approval by the involved regulatory authorities. Three of the five borders of the Italian Borders Market Coupling Project will be coupled with the Multi-Regional Coupling (MRC), thus linking the majority of EU power markets – from Finland to Portugal and Slovenia.

Dividend News

DFM’s board has proposed paying a cash dividend of 7 fils per share for 2014, up from 5 fils per share in 2013. There are 100 fils in a dirham.

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX and FTIL slightly off today.

Govt Prays To Bombay High Court To Vacate Stay Of FTIL-NSEL Merger Order
Ram Sahgal – The Economic Times

The FTIL-NSEL merger case, scheduled to come up before the Bombay High Court on Wednesday, has taken a fresh turn.

The ministry of corporate affairs on Saturday filed a notice of motion in the court praying that the HC restrain FTIL from selling, or creating any third party rights on its assets. It has also prayed that the court vacate its status quo order of December 22 against the government so that the merger of the scam-hit NSEL with its holding company can proceed in public interest.

Products

ICE Announces Launch Of 63 New Contracts Across Interest Rates And Energy
BUSINESS WIRE

The six interest rate contracts and 57 new energy contracts will be available for trading at ICE Futures Europe and ICE Futures U.S, all cleared at ICE Clear Europe.

ICE Futures Europe will list new interest rate mid-curve contracts, adding to the existing interest rate complex comprising of 50 contracts. All interest rate mid-curve options will be settled into the underlying future. In addition, ICE will list 15 new crude and refined oil contracts, complementing ICE’s portfolio of global oil futures. The new energy products at ICE Futures U.S. include cash settled U.S. natural gas and financial power, as well as physical environmental contracts.

NSE Eyes 2015 Derivatives Launch (subscription)
Alice Attwood – FOW

Nairobi Securities Exchange (NSE) has ramped up preparations for the launch of its derivatives exchange, by inviting proposals for the inaugural committee which will advise the new market.

In December NSE received a provisional license for the establishment and operation of a Derivatives Exchange from the Capital Markets Authority.

Indexes

Oslo Børs Launches New Bond Indexes (subscription)
Faye Kilburn – Waters Technology

Oslo Børs has begun calculating 20 new bond indexes based on Norwegian government bonds, treasury bills and money market instruments such as interest swap rates and Nibor (the Norwegian Interbank Offered Rate).

Oslo Bors press release here.

Icap Launches Bond Index, Publishes Index Data On Bloomberg (subscription)
Max Bowie – Waters Technology

Icap Information Services, has launched a new fixed income strategy index of enhanced income received on physical bond holdings designed to outperform a stable or rising US Treasury market, to provide bond investors with a benchmark that will allow them to exploit any rise in interest rates. Dubbed the Icap Bond Correlated Call US Treasury Index, the index is based on the Icap US Treasury 5-10 Year Maturity Index.

Career Paths

Spencer Stuart To Search MD For MCX
Rajesh Bhayani – Business Standard

MCX might soon get its new MD and CEO. The exchange management has roped in head hunting firm, Spencer Stuart, for the purpose. The agency has found 10 candidates who will be interviewed on February 7.

Financial Calendar

Today

TMX Q4 Financial Results

Thursday

ICE Q4 2014 Financial Results
CME Q4 2014 Financial Results

Friday

CBOE Q4 2014 Financial Results
ICAP 6.6p interim dividend payment

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

Analyst Notes

ICE Target Price Lifted By JPMorgan Chase From $265.00 To $269.00 – “Overweight” Rating
Credit Suisse Decreased Their Price Objective On NASDAQ OMX From $57.00 To $55.00
Keefe, Bruyette & Woods Hoisted Their Price Target On ITG From $23.00 To $24.00 – “Outperform” Rating

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

All Analysts, Banks and Brokers are welcome to contribute to this section.

Crowdfunding

New Era For Equity Crowdfunding Kicks Off As Burgundy Winemaker Domaine Chanzy Uses Seedrs To Conduct Its Initial Public Offering On AIM
MondoVisione

PLY: A fascinating development…

Other stories

White House To Request $1.7 Billion For SEC (subscription)
Andrew Ackerman – Wall Street Journal

The Securities and Exchange Commission would see its funding levels rise about $200 million to $1.7 billion under the White House’s 2016 budget blueprint, according to people familiar with the matter.

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