January 16 2015

elb2

Overnight I added a Premium post NASDAQ – Not Slick Competition while yesterday’s article Rome Wasn’t Burnt in A Day – The US Stock Market Debate has attracted considerable interest so far (more will follow on this topic in due course). To add to your reputation as the fount of all knowledge, our briefs are growing too. The latest include reviews of issues such as: ICE – NYSE Technology Sales Brief, Euronext IPO Brief, and Nairobi SE IPO Brief which have overnight been joined by: BIST IPO Brief, to help you rapidly review these developing situations from one source.

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Of course we have a brief on The bidding war for GFI, Yesterday was like a frantic day at a provincial auction house where pensioners battle for porcelain in 15-25 cent increments…

Enjoy Friday’s dose of pith and judicious headlines below:

Public Markets

CME Matches BGC Partners Boosted Bid For GFI (subscription)
Tess Stynes – Wall Street Journal

CME and a private group of GFI management are offering $5.60 a share to GFI shareholders, excluding the management consortium, whose members will receive previous offer of $5.25 a share.

PLY: Kapow! CME ups their ante to match BGC…

CME press release here.

BGC Announces Contingent Increase of All-Cash Tender Offer To Acquire GFI Group to $5.85 Per Share & Immediate Non-Contingent Increase To $5.75 Per Share
BGC Partners
GFI Bidding War Heats Up (subscription)
Neil Munshi – Financial Times

PLY: Splat! …before BGC immediately pushed their insurgent advantage (once again):

‘BGC Partners announced that it has delivered an executed agreement to GFI Group that, if countersigned by GFI Group, provides that BGC would increase its fully financed, all-cash tender offer to acquire all of the outstanding shares of GFI to $5.85 per share.

In addition, the company announced that it has made an immediate and non-contingent increase to its all-cash tender offer price to $5.75 and extended the expiration date for the tender offer.

BGC’s proposed revision to its cash offer of $5.85 per share represents a premium of $0.25, or approximately 4.5%, to the $5.60 per share stock and cash consideration offered by the CME/GFI Management transaction and a premium of more than 88% to the price of GFI shares on July 29, 2014, the last day prior to the announcement of the original CME/GFI Management transaction. Prior to its proposed revision, BGC’s contingent tender offer price was $5.60 per share.’

PLY: For a review of the story so far, our Premium Brief: The bidding war for GFI

Will CBOE Expand Overseas?
Lynne Marek – Crain’s Chicago Business

CBOE has been ringing up sales abroad without actually placing employees anywhere outside the U.S., but its Chicago-centric approach could change sometime soon.

“We’re going to need to broaden,” the company’s CEO, Ed Tilly, told reporters when asked about the topic at the company’s annual media lunch yesterday. “There are so many huge advantages to being in any home market. They will certainly outweigh the things we have to overcome—part of a great growing pain.”

PLY: With 8 staff from circa 500, it’s fair to say CBOE has some reach but not a lot of human capacity based far beyond the shores of Michigan. It would be interesting to see CBOE expand and hopefully adopt to thinking beyond the delightful but often relatively parochial confines of Chicago.

LME’s Transaction Fee Hikes Change The Commodities Trading Landscape
Jeff Yoders – Metal Miner

PLY: We have been discussing the fee hikes previously, e.g. here, here and here.

PSE Assures No Hike In Fees Under New Trading System
Phil Star

Philippine SE (PSE) has assured trading participants there would be no hike in access fees for the new trading system to be launched in May.

The operator of the country’s only stock exchange said it would maintain the current fees it charges trading participants to access its trading system even as it shifts to a new trading system called PSEtrade XTS.

UBS To Pay $14.5 Million In S.E.C. Settlement Over Dark Pool
William Alden – New York Times

UBS has agreed to pay $14.5 million to settle accusations by SEC that a subsidiary violated federal securities laws in its operation of a private stock trading system known as a dark pool.

PLY: Largest fine yet for a dark pool and that makes a handy $28.5 million for the week after the Direct Edge fine.

Private Markets

Malta SE Working To Facilitate SME Financing
Times of Malta

Malta SE (MSE) is working on a product which will encourage SMEs to access capital markets which, subject to all the relevant regulatory approvals, should be implemented during this year.

DHS Believed Mt. Gox CEO Might Have Been Silk Road’s Secret Mastermind
Andy Greenberg – Wired

Long before the Department of Homeland Security set its sights on Ross Ulbricht, the agency had another surprising suspect in mind as the possible creator and administrator of the Silk Road’s massive online drug market: Mark Karpeles, the chief executive of what was then the world’s biggest bitcoin exchange, Mt. Gox.

PLY: If you like a good juicy stealth operation, a pile of intrigued & a good court case – the Silk Road / Mark Karpeles case is already proving to be gold dust for the media. Short of a NASCAR driver claiming his girlfriend was a hired assassin, this case has pretty much every ingredient to be compelling reading.

Elsewhere in the Bitcoin parish, I commented on mining the other day in Premium. Meanwhile, I saw the first “Bitcoin has failed” headline the other day – a few more of those and we ought to be ready for a new bull market – particularly if the increasingly anti-capitalist Economist, or some similar publication pick it up.

Dividend News

BME informs that its dividend payment dates for the year 2015 are as follows:

– 2014 Final dividend: 8 May

– First interim dividend against 2015 earnings: 11 September

– Second interim dividend against 2015 earnings: 29 December

Special Section: FTI, NSEL, India at the Crossroads

PLY: Small down day but ostensibly both MCX and FTIL are flat.

Technology

GMEX Readies Data Test Days Ahead Of Exchange Launch (subscription)
Faye Kilburn – Waters Technology

KRX To Create A Stock Market Supervision System For Azerbaijan
abc

The State Committee for Securities has completed one of the main tenders within the implementation of the Capital Market Modernization Project financed by the World Bank and SECO.

“The contractor selected by competition is ready to perform the work within 12-month term for $5.536 million (including VAT)”, – SCS says.

Financial Calendar

Next week

SGX Q2 Results For Financial Year 2015 (FY2015)
Interactive Brokers Q4 Results

New announcement

Markit Q4 & Full Year 2014 Financial Results – Wednesday February 11th 2015
Financial Stability Oversight Council – January 21st 2015

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

Crowdfunding

Who Needs A Bank?
Jeff Carter – Points and Figures

Banks are under assault from the federal government in the form of Dodd-Frank and other regulatory regimes. Dodd-Frank killed community banking. At the same time, banks are under assault from innovation. Companies like Lending Club are unbundling banking.

In his book, The Capital Markets Revolution published in 1999, Patrick Young talked about how investment banking came about. He said in an online world, P2P can totally replace a lot of the functions of investment banks. Back in the days before investment banks, investment banking was done privately around kitchen or bar room tables.

PLY: Good to see Jeff in excellent form as usual with his longstanding blog which remains a great read – even when he isn’t kind enough to praise me!

Google In P2P Lending Venture (subscription)
Tracy Alloway – Financial Times

Lending Club, the world’s biggest P2P lender, has launched a landmark tie-up with Google to provide small business loans to the technology group’s partners.

PLY: Supply chain management is a big issue for business funding going forward and Google endorsing this form of process is very encouraging.

Other stories

US – EU Financial Markets Regulatory Dialogue Joint Statement
MondoVisione

PLY: “We’re still talking” is the synopsis.

Also, I am delighted to see that for clarity the next meeting of this EU-US dialogue will take place in “Brussels, Belgium” – just in case anybody was rushing to book tickets to go to Brussels, Wisconsin, presumably. On which note, I wish you a wonderful weekend. Thanks to our sponsors and subscribers in particular.

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