February 18 2016

elb2Let me just say I love the Blockchain. Adore Bitcoin too. BTC remains the Model T Ford of digital cash but that’s still a lot of progress in one ledger! (“A small ledger for a Satoshi, a giant ledger for mankind.”). Anything before didn’t manage even the popularity of the curved dash Oldsmobile, that classic, final styling of a horseless carriage. Since Tuesday when Herbie’s MondoVisione published my latest “Trading Places” IPO column the correspondence has been scintillating in direct email. Insightful, often cynical but pointedly analytical. Thank you one and all for your excellent insights.

This compares well with the truly cringe making media/PR channel.

There are vast opportunities and great progress being made around the Blockchain but frankly it is lost in a weight of misunderstood PR drivel being poorly analysed (mostly gushed verbatim) by a media which is even more clueless than the Blockchain bandwagon jumpers. I can’t envisage many/any of those folks for whom only the “C” word can be applied (“Consultants” – there I’ve said it, sorry for such unreasonable verbiage in your morning mailbox!), can add meaningful value to anybody’s Blockchain project right now. I have the feeling the real work is being done behind closed doors and am not sure too much of it is being achieved by coalitions of bank managers, along with sundry exchange industry hyper-egos who think the ledger has their name embossed on every node.

Meanwhile the C-classes are behaving like the Donkey in Shrek: jumping up and down and shrieking “Pick Me! Pick me!” in ever more shrill tones, having to date broadly missed every major financial innovation of the past 20 years until it was distributing in front of their noses. It strikes me there needs to be a bit more thought put into the Blockchain than just a low latency millionth of a second loop on the road to Damascus and back which has filled the C-class with the lure of endless revenue.

Thus Exchange Invest’s no nonsense coverage of Blockchain starts today – I reserve the right of ridicule for truly egregious C-folks and others who deliver little more than flatulence in our content management systems. Anybody adding value to the parish, will, as always, be very welcome and rightly highlighted.

Elsewhere, I have been discussing Brexit issues on CCTV America through my usual lens of pragmatic long-term investor who has seen great empires come and go… In this case, Britain finds itself locked in an unproductive loveless marriage where it can either go for the bitterness of divorce now or endure increasingly vindictive spousal abuse until the other party’s inevitable demise which may be years away.

Interesting chunks in the headlines today, happy scrolling:

Public Markets

DB1 2015 Results

DB1

vs 2014: Net revenue of €2,36 bln (USD 2.62 bln), +16%, EBIT €1,12 bln (USD 1.24 bln), +14%, net income €766 mln (USD 850 mln), +14%.

PLY: Very encouraging numbers from DB1. Not sure Carsten Kengeter can lay claim to the credit yet but this sort of upswing certainly gives him momentum to propel his new management structure forward…

 

Plus500 2015 Results

Victor Golovtchenko – Finance Magnates

vs 2015: revenues $275.6 mln, +20%, net profit $96.6 mln, down 5.7%.

FY 2015: brokerage reported new clients totaled 84,858, while active clients were reported at 136,540.

PLY: Given the upheaval of the Playtech takeover collapsing, these are interesting results, will this presage a new outbreak of short selling? (Maybe it has already happened..).

 

Euronext To Unveil New Strategic Plan In Q2 (subscription)

Anna Irrera – Financial News

Euronext will outline a new strategic plan in Q2 2016, after announcing yesterday it had achieved the objectives set out before its 2014 listing a year ahead of schedule.

 

IEX To Critics Of Its U.S. Exchange Bid: ‘We Stand By Our Words’

John McCrank – Reuters

“IEX has not set out to misrepresent anything through intent, negligence or recklessness. We stand by our words,” the company, which currently operates a private trading platform, said in its fourth such letter to SEC.

After ‘Flash Boys’: What Stands In The Way Of A New American Stock Exchange

Michael del Castillo – New York Business Journal

PLY: For some reason the majestic Simon Stimson line in Thornton Wilder’s “Our Town” springs to mind after reading this headline: “Now you know – that’s the happy existence you wanted to go back to. Ignorance and blindness.”

 

SEC Approves PSE’s Nomination, Election Rules

BWO

SEC has approved the guidelines governing the election of the 15-man BoD of Philippine SE (PSE).

 

CFTC Does The Right Thing On Trade Reporting (subscription)

Alexander Osipovich – Risk

There is a famous quotation, often ascribed to Winston Churchill, that goes: “The Americans will always do the right thing… after they’ve exhausted all the alternatives.” Much the same could be said about CFTC and its approach to swap data reporting.

PLY: Clearly much of America is hoping this Winston Churchill quote is particularly true of the current Primary election cycle.

 

ISE Mercury Completes Successful Launch

MondoVisione

PLY: It would be easy to take for granted but, as absolutely expected, ISE oversees a launch on time, on budget and to the outside observer, appears broadly effortless. Great execution by Gary Katz and his team once again.

Private Markets

Lawmakers Seek Probe Of Chinese Investors’ Buy Of CSX

Diane Bartz – Reuters

A group of 46 U.S. lawmakers urged regulators who investigate deals that could harm national security to take a hard look at a bid by a Chinese company to buy CSX.

PLY: It strikes me that aggressive HFT is a much greater danger to US investors and the firmament than Chinese investors buying the broadly empty vessel which is the Chicago Stock Exchange. Oh, & don’t get me started on campaign finance but clearly that Turkey Thanksgiving Index stands well supported…

 

Abu Dhabi SE Performs Technical Improvements On The “Circuit Breaker” System

MondoVisione

 

Big EU Fund Managers Join Luminex (subscription)

Tim Cave – Financial News

Union Investment & Baillie Gifford are among the latest batch of new members named by US buyside trading platform Luminex, a sign of EU managers’ appetite to find new ways to source block trades.

QV Premium: Luminex – Crazy Name, Crazy Development?

PLY: Luminex is the dark pool upstart which is delivering – that must acutely concern Liquidnet in particular.

Dividend News

DB1 proposes an increased dividend of €2.25 for 2015 (2014: €2.10), equivalent to a distribution ratio of 55% of adjusted net income. To be voted at AGM on 11 May 2016.

CBOE declared a quarterly cash dividend of $0.23 payable on March 18, record date March 4, 2016. CBOE also increased its share repurchase authorization by $100 million.

Plus500 declared a final dividend for year ended Dec. 31 2015 of $0.2922 (final dividend 2014: $0.3001), a special dividend of $0.3362 per share (special dividend 2014: $0.2657).

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX flat, FTIL drops 4% as jitters re-emerge on the company’s potential defenestration by the blob.

Jignesh Shah Appears Before EoW Ahead Of HC Hearing

Business Standard

Shah was seen in the capital’s Mandir Marg police station in the afternoon around the time the capital’s media was busy with the JNU case in Patiala House Courts.

The Mumbai-based Shah’s Delhi visit came a day ahead of the Delhi High Court hearing anticipatory bail petitions of Shah and Jagmohan Garg, the promoter of Mohan India, one of the largest traders on NSEL.

Technology

Digital Asset Establishes Strategic Business Relationships With Accenture, Broadridge & PwC

MondoVisione

PLY: Day One of our ruthless shredding of nebulous puff on Blockchain. Including this only as it pertains to the DAH consortium which remains the benchmark for raising money. However there is really not a huge amount of granular info here other than advertising various consultancies being as desperate for business as well, lots of other consultancies.

 

Integrated Trade & Surveillance System Launched At Baku SE

Trend

Korea Stock Exchange (KRX) won the Azerbaijani State Securities Committee’s tender for equipping and installing the information system of the capital markets January 13, 2015 within the modernization and automation of the capital market infrastructure upon a World Bank (WB) joint project entitled ‘Capital Markets Modernization’ (contract value amounted to $5.5 million).

 

Broadridge Invests In Corporate Governance Solutions Provider To Expand Analytics Capabilities Across Europe

MondoVisione

 

IIM-Ahmedabad Study Calls For Gold Spot Exchange

The Economic Times

The India Gold Policy Centre (IGPC) at the IIM-A called for setting up of a gold spot exchange for efficient price discovery and ensure quality.

PLY: Gold gold everywhere but the market structures are in a huge state of flux…

Products

Times Changing For US Treasury Market (subscription)

Joe Rennison – Financial Times

The $13tn US Treasury market has long been closed off to those outside the big banks that dominate trading, but now there is a push to open up access.

 

A Hard Look At Last Look In FX

Ivy Schmerken, FlexTrade – Markets Media

PLY: I like Ivy but I lost my will to live reading this article. The forex ‘industry’ makes itself look ludicrous with such practices and only adds to the public loathing of the rather dismal banking industry.

Last Look – Goodbye. End of.

 

Tokyo Commodity Exchange: Suspension Of Listing New Contracts Of Gold Options

MondoVisione

 

SEEPEX Successfully Launches Serbian Day-Ahead Market

MondoVisione

PLY: It is really a struggle not to remark on an electricity market with “Seep” in its title. Pure acronymic branding has its dangers… Just ask the campaign to keep Britain within the EU: BSE. Those initials spell mad cow disease in English (not that France’s establishment didn’t suffer problems passim with the French spelling either).

 

Castor Volumes Jump At RCX Post Suspension By NCDEX

Vimukt Dave – Business Standard

After NCDEX suspended castor contracts from January, volumes on Rajkot Commodity Exchange (RCX) have increased to 5,310 tonnes from 920 tonnes in two weeks.

 

SIFMA Releases Electronic Bond Trading Platform Report For U.S. Corporate And Municipal Securities

MondoVisione

Indexes

MSE Adds Sharia Equity Index

Kirsten Hastings – International Adviser

Malta SE (MSE) has launched the MSE Sharia Equity Index, which has been certified as compliant with Islamic law by Dubai-based Islamic finance consultancy Dar Al Sharia.

PLY: An interesting development for Malta SE.

Career Paths

Finance Magnates reports that Plus500 is reshuffling top management, promoting Asaf Elimelech to CEO, while Gal Haber is to be appointed MD.

SEC named Daniel S. Kahl as Chief Counsel of its Office of Compliance Inspections & Examinations (OCIE).  

Financial Calendar

25.02 – SEC Meeting of the Advisory Committee on Small and Emerging CompaniesAgenda.

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

Analyst Notes

TMX Target Price Cut By TD Securities From C$46.00 To C$43.00 – “Hold” Rating

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

Other stories

Hong Kong’s SFC Issues Q3 Report

MondoVisione

 

Japan Shelves Plan to Let Pension Fund Directly Invest in Stocks (subscription)

Eleanor Warnock – Wall Street Journal

Japan’s government has put off a plan to let its $1.1 trillion public pension fund buy & sell stocks directly, following criticism that the move could lead to excessive state influence on the market.

 

EC: Speech By Commissioner Hill At European Forum For Manufacturing & AFME Dinner Debate

MondoVisione

PLY: Bankers don black tie to show how in touch they are with everyday industry. The Hill speech is encouraging – deep down he wants to do the right thing but can he overcome Brussels’ corporate socialist blob?

 

Richard G. Ketchum, Chairman & CEO FINRA; Remarks From The Exchequer Club – Essential Elements Of Sound Capital Market Structure

MondoVisione

PLY: Good speech, Ketchum covers a lot of ground in what is needed. Blockchain consultants will doubtless be reading & salivating…well if they know what they are doing, anyway.

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