February 17 2016

elb2More sound results from Euronext. Great sale for GMEX technology to the, er, radical (in various senses of the word) industrial hemp commodity marketplace Seed CX. LCH EquityClear expands to UBS MTF as CME announces board slates.

Thanks for all the feedback on my “Trading Places” column about Blockchain yesterday, lots happening in the space and of course the ICDA conference coming up in London April 19-20th.

Public Markets

Euronext 2015 Results

Euronext

Third party revenue of €518.5 mln (USD 580 mln), increased by +10.1% (FY 2014 adjusted: €470.9 mln), and by +13.1% on a reported basis (FY 2014 reported: €458.5 mln).

Operating profit before exceptional items for 2015 €266.8 mln (USD 299 mln), +47.9% vs 2014, & + 27.8% on a reported basis. Net profit for 2015 was €172.7 mln (USD 193 mln), up 46.1% compared to 2014.

PLY: I realise we react in the short term to the analysts’ machinations. Thus Euronext ticked the “in line” box. However, over a longer term horizon Euronext deserve further recognition of how well this business has done after floundering in a faecal mess as part of the Niederauer era NYSE. Euronext is doing well and has firmly found its feet as an independent exchange operator across borders and asset classes. After all the IPO objective was €500 million in revenue by the end of 2016 and this has already been achieved – despite the regressive idiocies of the French ‘government’ with their national liquidity sapping FTT.

 

LCH.Clearnet Expands European Cash Equities Clearing Service

LCH.Clearnet

From 22 February 2016, users of  UBS MTF will be able to benefit from clearing via LCH.Clearnet, in addition to recent additions including Nasdaq Nordic’s cash equity markets in Denmark, Finland and Sweden, and Spanish equities on pan-European MTFs.

PLY: Pan-European MTFs, Spanish equities, how does the latter continue to defy gravity? Let’s face it we’ve all read the obituaries (I even wrote some of them) but somehow BME is still profiting… a topic for the water cooler discussion today. Readers will recall that UBS MTF took off under the excellent management of Robert Barnes who now heads Turquoise’s equity MTF, a sister entity in LSE Group to LCH itself.

 

Nasdaq To Test New Incentives To Ease Volatility, Trading Halts

John McCrank – Reuters

Nasdaq plans to lower trading prices for some U.S. stocks during times of extreme market volatility to determine whether the incentives lead to less disruptive trading.

 

Barclays Analysts Dismiss Brexit Threat To LSE (subscription)

James Rundle – Financial News

PLY: Yip, yip, thrice yip. I was on CCTV last night discussing Brexit, will post a link tomorrow when it hits YouTube..

 

Buyside Traders Gear Up For More Dark Pool Scrutiny

John D’Antona Jr. – Traders Magazine

Although dark pools’ share of total U.S. equity volume held steady at 14% from 2014 to 2015, the recent Greenwich Associates  2015 Trade Desk Optimization Study suggests institutional trading desks are approaching ATS with more caution and, at times, even skepticism.

“Traders are less likely to accept at face value the quality of execution they receive from dark pools,” wrote John Colon, MD at Greenwich Associates, author of: “What Lies Beneath: A Deep Dive Into U.S. Equity Dark Pool Perceptions.

 

EEX & EPEX SPOT Welcome The Power Market Act: Political Sector Relies On Market & Competition – Exchanges Discuss Bill With Experts

MondoVisione

SEC, CFTC Need More Funding, Liberal Group Says (subscription)

Wall Street Journal

Better Markets urges Congress to approve president’s request.

PLY: Shake that magic money tree harder – it’s not as if Obama has been spendthrift between golf games or anything.

Private Markets

Seed Commodities Exchange To Launch In Partnership With GMEX

GMEX Group

PLY: Excellent sale for GMEX, good purchase by the Seed dudes (how else to term the Seed CX management given their product segment?).

Seed Commodities Exchange Announces Plans To Launch Industrial Hemp Derivative Contracts

MondoVisione

Cannabis Shifts From Outlaw Weed To Mainstream Commodity (subscription)

Gregory Meyer & Shannon Bond – Financial Times

Seed CX of Chicago has applied to a US regulator to become a trading venue for financial contracts on industrial hemp, the marijuana cousin found in such products as fabric, shampoo, plastics, building materials and food.

PLY: Excellent move, I wish the Seed CX every success.

 

ISE Want Dublin’s Wax Museum Out Of Landmark Premises

Tim Healy – Irish Independent

Irish SE (ISE) wants the operators of the National Wax Museum to vacate its landmark premises in Dublin to facilitate a €10m ISE redevelopment project, the Commercial Court heard.

PLY: One of those classic headlines to accompany industry gems like the curse of the pharaohs claiming the WSE boss. Lovely building, brilliant location in the heart of Dublin & with great proximity to the existing architectural splendour of the Irish SE building. Given the speed of movement on Deirdre Somers’ ISE team there won’t be any confusing them for waxworks when they have vacant possession.

 

SET Lobbies For Dollar-Denominated Trades

Bangkok Post

Stock Exchange of Thailand (SET) is pursuing Bank of Thailand permission for USD-denominated trade settlements of foreign companies to be listed on the local bourse alongside commodities.

 

Dalian Commodity Exchange: Accelerating Transformation To A Diversified, Open Comprehensive Derivatives Exchange

MondoVisione

Dividend News

Euronext €1.24 dividend proposed for approval at the AGM on 12 May 2016, which represents an increase of 48% compared with €0.84 per share paid last year.

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX slightly up, FTIL off nearly 1%, hold on government demolition of corporate code although I am not sure common sense will prevail…

Bombay High Court Puts On Hold FTIL-NSEL Merger

K R Srivats – The Hindu Business Line

Court Extends Stay To Merger Of NSEL, FTIL

NDTV

Bombay High Court on Tuesday extended till March 31 stay to implementation of merger between NSEL & FTIL.

Technology

Blockchain Can Revolutionize Wall Street but Needs New Regulatory Framework

Avi Mizrahi – Finance Magnates

PLY: Not sure it really explains the issues as much as puffing the GFT entity but such is generally the way of the world in Blockchain right now. I think this ought to be sufficient notice – we’ll go more granular from now on with what we choose to discuss, as opposed to just being Blockchain breathless. Oh and lest you missed it, my IPO column from yesterday: Block-Y2K?

Products

SGX: Evolving Dynamics In Seaborne Iron Ore Pricing

MondoVisione

PLY: Punchy message.

 

MOEX: Midday Clearing Session On Derivatives Market Extended

MondoVisione

 

Canadian Securities Regulators Seek Comment On Proposed Amendments To Derivatives Trade Reporting Rules

MondoVisione

 

Obligation To Issue A Prospectus For Bond Offerings – No Obstacles For Retail Investors: By Dr Christoph Boschan von dem Bussche, Member Of The Management Board Of Boerse Stuttgart.

MondoVisione

PLY: I admire the diplomacy of Christoph as he patiently describes why the regulators are bereft of perspective and appear anti-capitalist to their core. This may be related to their being incapable of understanding investment beyond their final salary pension schemes the taxpayers are gilding. The 50K limit ought to be much lower…not higher as the usual idiotic bureaucratic creep has inflicted on ensuring investors have less choice and corporates find it tougher to get competitive financing. Good to see Boerse Stuttgart leading the debate here, particularly as debt crowdfunding is anyway eating the market away from beneath…

Career Paths

CME announced its slate of candidates (PLY: exemplifying a multitude of market experience) for its BoD for election at the AGM Wednesday, May 18, 2016.

The BoD recommends the Class A and Class B shareholders voting together elect the following eighteen individuals to the board:

Terrence A. Duffy, 57, Executive Chairman & President, CME

Phupinder S. Gill, 55, CEO, CME

Timothy S. Bitsberger, 56, Former MD, Official Institutions FIG Coverage Group of BNP PNA

Charles P. Carey, 62, Former Vice Chairman, CME; Principal of Henning & Carey Trading Company and Henning-Carey Proprietary Trading

Dennis H. Chookaszian, 72, Former Chairman, Financial Accounting Standards Advisory Council; Former Chairman & CEO, CNA Insurance Companies

Ana Dutra, 51, President & CEO, The Executives’ Club of Chicago

Martin J. Gepsman, 63, Independent Broker & Trader

Larry G. Gerdes, 67, CEO, Pursuant Health (fka SoloHealth); General Partner of Sand Hill Financial Company and Gerdes Huff Investments

Daniel R. Glickman, 71, Executive Director, Aspen Institute’s Congressional Program; Senior Fellow, Bipartisan Policy Center, U.S. Secretary of Agriculture (1995-2001); Member of Congress, Kansas (1977-1995)

Leo Melamed, 83, Chairman Emeritus, CME; Chairman & CEO, Melamed and Associates

William P. Miller II, 60, CFA, Head of Asset Allocation, Sanabil, Riyadh, Saudi Arabia

James E. Oliff, 67, President, FILO Corp.

Edemir Pinto, 62, CEO, BM&FBOVESPA

Alex J. Pollock, 73, Distinguished Senior Fellow & Director of Financial Systems Studies, R Street Institute; former President & CEO of Federal Home Loan Bank of Chicago

John F. Sandner, 74, Retired Chairman of the Board, CME; former Chairman, E*Trade Futures

Terry L. Savage, 71, Nationally-Syndicated Financial Columnist and Author, President, Terry Savage Productions

William R. Shepard, 69, President & Founder, Shepard International

Dennis A. Suskind, 73, Retired Partner, Goldman Sachs

Three directors will be elected by the holders of the Class B-1 shares.  The Class B-1 Nominating Committee has selected the following nominees for these positions:

Jeffrey M. Bernacchi, 57, Independent Trader; President, JMB Trading; Managing Member, Celeritas Capital

Michael J. Downs, 59, Independent Trader

William W. Hobert, 52, MD, WH Trading

Douglas M. Monieson, 50, Independent Trader

Jeremy J. Perlow, 48, Independent Trader

Howard J. Siegel, 59, Independent Trader

Two directors will be elected by the holders of the Class B-2 shares.  The Class B-2 Nominating Committee has selected the following nominees for these positions:

Patrick W. Maloney, 54, Independent Floor Broker

Ronald A. Pankau, 59, Independent Trader; Owner, J.H. Best and Sons Steel Fabricating Co.

David J. Wescott, 58, President, Dowd Wescott Group

James J. Zellinger, 70, SVP, Wedbush Securities

One director will be elected by the holders of the Class B-3 shares.  The Class B-3 Nominating Committee has selected the following nominees for this position:

Bradley P. Cohen, 53, Independent Trader

Elizabeth A. Cook, 55, Independent Floor Broker

FT reports that Itbit, a start-up US blockchain technology platform, has hired Jason Nabi from Société Générale to spearhead its new London operation as it turns its focus to trading and settlement on the UK gold market.

Axioma hired Sunil Rajan as MD for EMEA. Rajan joins from Standard & Poor’s where he was Senior Director & Head of Sales for EMEA Risk Solutions.

NetOTC appointed David Maloy as COO. Prior to joining NetOTC in 2014, David served as Global Head of Collateral Management at Credit Suisse Investment Bank.

Financial Calendar

17.02 – DB1 Q4 2015 Results

New! – 29.02 – ESMA Open Hearing On MAR Guidelines, from 10:00 to 12:30, in the Auditorium, ESMA, 103 rue de Grenelle, 75007 Paris.

ICDA Blockchain Conference…In the City of London in April 19-20, 2016.

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

Analyst Notes

ICE Price Objective Upped By Barclays From $286.00 To $287.00 – “Overweight” Rating

NASDAQ Price Target Increased By Barclays From $66.00 To $67.00 – “Overweight” Rating

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

Crowdfunding

Crowdfunding Due Diligence Should Not Be Limited To Investors, Warn Lawyers – Rebus Collapse Could Leave Clients With A £1bn Headache

MondoVisione

PLY: I have to say this reads more like a self-serving plea for the legal classes not to be disintermediated. People invested, people lost, get over it. Sorry. End of. Been there, seen it, worn the tee shirt, what doesn’t kill me makes me stronger. The danger as to the business of Rebus collapsing is a business risk, tagging it to crowdfunding is a sign of a desperate need for the limelight by some law firms: which suggests the digital age, smart contracts & general commoditization are finally making a welcome impact to enable business and not cause it to be trussed up by lawyers. (The legal fraternity has a golden age ahead btw: it just won’t be like the old era of purely chargeable hours and paralegals at entrepreneurially paralysing levels of cost etc).

Other stories

China’s Securities Regulator Approves Nine IPOs (subscription)

Wall Street Journal

China’s securities regulator approved nine IPOs, the second batch under new listing rules that are expected to pave the way for a registration-based IPO system.

 

ESMA Issues Follow-Up Review On Money Market Fund Guidelines

MondoVisione

 

ESMA Updates EMIR Q&A

MondoVisione

 

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