January 26 2015

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GFI delays meeting, BIST stake sale discussions, Saxo says it is safe while announcing 100 million plus losses…and lots more, welcome welcome to Exchange Invest Daily.

Meanwhile, over in Premium Posts, busy as always with Chinese lev stories and a series of new briefs charting the history of the non-merger (phew!) Between Warsaw and Vienna.

A Margin For Concern – aka China’s Leveraged Worries
Luminex – Crazy Name, Crazy Development?

The Latest Premium Briefs:

China’s Everbright Securities Trading Error – Brief

WSE – Wiener Borse Failed Merger Part 1, Part 2, Part 3.

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

GFI Group Reschedules Special Meeting Of GFI Stockholders To Allow Stockholders Additional Time To Review Additional Disclosures
PRNewswire

GFI Group announced that it has rescheduled the Special Meeting at which GFI stockholders will vote on the merger with CME to Friday, January 30, 2015. Stockholders of record as of the close of business on December 1, 2014, will continue to be entitled to vote at the Special Meeting.

PLY: Hmmm, having pondered this for some time, I am struggling to find any way in which this move looks good for GFI after last week’s proxy group suggestions encouraging votes against the GFI-CME deal.

What’s Driving BGC Partners & The CME’s Interest Of GFI Group
Ron Finberg – Forex Magnates

PLY: For a more extensive background, read our Premium brief on the topic.

How CME Is Looking To Buy Its Way Into Foreign Markets
Lynne Marek – Crain’s Chicago Business

While CME gets about 30% of its $3 billion in annual revenue from abroad, archrival ICE has a stronger foothold in Europe, the key international market, and generating business in Asia and South America has been slow going. So if CME’s $947 million bid for New York broker GFI Group is successful, it will be a significant step toward busting out of its U.S. boundaries.

“They want that platform to get into other things in Europe,” says Richard Repetto, an analyst at Sandler O’Neill & Partners.

PLY: Clients will recall my oft repeated line “The great advantage to CME is being the US dollar silo whereas the biggest problem facing CME is being a huge US dollar silo.” With the greenback high, they have optionality…

Read our Premium brief: BGC – CME – GFI Brief

Saxo Bank Remains Well Capitalized, Albeit Facing Up To $107 Million Losses
Victor Golovtchenko – Forex Magnates

PLY: That “no worries, nothing to see here” is actually up to $107 million in losses following the Swiss National Bank’s move last week. Not well handled – compare the way IBKR knew immediately and made a statement within hours, whereas Saxo has knocked confidence in its abilities by being slower to say it actually had a material loss.

FXCM Options Activity Surges After Swiss Shock
Saqib Iqbal Ahmed – Reuters

Losses from the surprise move by the Swiss National Bank nearly crippled brokerage FXCM, but all the attention has resulted in a surge of activity among options traders on the online forex broker.

Former GFT Manager Of Global Risk Says Charles Schwab-FXCM Buyout Rumor ‘Absolutely Makes Sense’
Benzinga

Speaking to Benzinga, Former GFT Manager of Global Risk Jeff Wilkins said that a rumored $5.25 per share buyout of FXCM by Charles Schwab “absolutely makes sense.”

High-Frequency Probe’s 1st Target Isn’t Traders, But Barclays
Keri Geiger & Sam Mamudi – Bloomberg

NY AG Eric Schneiderman’s 10-month investigation into high-speed trading has so far led to one big target: Barclays.

Barclays Bites Back Against NY Watchdog (subscription)
Brooke Masters – Financial Times

For more than a decade, banks that do business in the US have lived in fear of the NY AG’s office. Since 2002, a string of elected enforcers, from Eliot Spitzer to Eric Schneiderman, have used the office to levy billions of dollars in penalties for a wide range of misbehaviour.

Right now, Barclays is the institution in the crosshairs. Mr Schneiderman alleges that the bank misled users of its private trading venue, known as a dark pool. Specifically, the complainant says Barclays understated how many other dark pool users were HFT seeking to exploit small information advantages. The bank denies wrongdoing and this week stepped up its efforts to have a judge dismiss Mr Schneiderman’s complaint.

CBOE Hikes BBO, Depth Fees, Cuts COB Charges (subscription)
Max Bowie – Waters Technology

CBOE has increased some fees for its market data to support the addition of new content, while decreasing other fees to encourage spread trading on its complex order book. CBOE is increasing the price of its BBO Data Feed of quote and order data from $5,000 per month to $6,000, and is establishing a similar fee of $6,000 for its Book Depth Data Feed.

SGX Partners Clearbridge Accelerator To Facilitate Fund Raising For Entrepreneurs & SMEs
MondoVisione

SGX is partnering Clearbridge Accelerator Pte Ltd (CBA) to develop a capital-raising platform for entrepreneurs and SMEs in Asia.

PLY: Very interesting indeed.

Private Markets

BIST In Talks Over Stake Sale (subscription)
Philip Stafford – Financial Times

PLY: Borsa Istanbul (BIST) now expects to finish (Read our Premium brief: BIST IPO Brief) the process by late February to sell up to 36% of the exchange.

Bourse Gearing Up For Gold Exchange
Nuntawun Polkuamdee – Bangkok Post

Stock Exchange of Thailand (SET) is gearing up for the establishment of the country’s first physical gold exchange after major gold dealers agreed to become members of the new spot gold exchange.

Previous discussions here.

New Saudi King Seen Allowing Foreigners Into Stocks As Promised
Zahra Hankir – Bloomberg

NCDEX Moots Electronic Registry For Warehouse Receipts
The Hindu Business Line

NCDEX has mooted a proposal for the launch of an electronic warehousing registry that can manage warehouse receipts issued across the country just as dematerialised equities traded in the stock market.

PLY: Good idea.

NBHC Sees New Biz Opportunity From NCDEX
Suresh P Iyengar – The Hindu Business Line

National Bulk Handling Corporation (NBHC), which was once owned by FTIL and servicing MCX, has become an accredited warehouse service provider of NCDEX. NBHC was sold by FTIL to IVF Trustee Company for Rs 241.74 crore (USD 39.8 mln) in April.

Coinbase Is Opening The First Regulated Bitcoin Exchange In The U.S.
Jon Russell – Tech Crunch

Fresh from scoring a massive $75 million funding round, bitcoin payment firm Coinbase has revealed that it will open the first regulated bitcoin exchange in the U.S. on Monday.

The company, which added NYSE and USAA to its list of investors last week, said it has “regulatory approval” in half of all states, including significant areas like New York and California.

FinFX Partners With FinCCX To Launch Finland Based Bitcoin Exchange
Mike Fox – Leap Rate

FinFX, the largest Forex broker to be based in Finland announced it has a new digital currency trading partner. Debuting live this past week was new Bitcoin exchange, Finland Crypto Currency Exchange (FinCCX). FinCCX is the first real-time online Bitcoin trading marketplace registered in Finland that provides for clients all over the world.

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX flat, FTIL down 2% as we have some moves in the High Court this week…

Technology

Speed Trading Heavyweight Allston Pulls Out Of Stock Market
Sam Mamudi & Matthew Leising – Bloomberg

HFT firm Allston Trading LLC has stopped operating in the U.S. stock market.

Allston, founded more than a decade ago by futures traders Bob Jordan, Elrick Williams and John Harada, exited the business after deciding to focus on more profitable trading in derivatives markets.

Products

Eurex Eyes New Incentives For Swap Future (subscription)
Cian Burke – FOW

Eurex said it will launch a new incentive scheme for its Euro swaps future contracts to coincide with the introduction of mandatory clearing later this year. The exchange launched the contracts in September but to date it has received no volume.

PLY: A sort of CDS deja vu for EUREX.

US Considers Delay To OTC Swap Rules (subscription)
Jeremy Grant – Financial Times

The US is studying whether to give banks more time to adhere to rules that would require them to set aside margin for swaps that cannot be processed through clearing houses, the country’s top derivatives regulator said on Friday.

MCX-SX Gets SEBI Approval To Launch Fresh Contracts
Moneycontrol

SEBI has accorded its approval to MCX-SX to launch fresh contracts.

Indexes

Hong Kong Stock Index To Launch In Feb. For Stock Link
Xinhua

An index of tradable Hong Kong stocks under the Shanghai-Hong Kong Stock Connect scheme will be launched on Feb. 16, Shanghai SE and China Securities Index Co., Ltd announced Friday.

The new index will comprise of 273 stocks listed in Hong Kong and tradable through the stock connect scheme. A similar index featuring 569 Shanghai-listed tradable stocks was launched on Nov. 17 when the stock connect formally kicked off.

PLY: More progress towards the development of a great project.

Career Paths

Qatar’s economy minister Sheikh Ahmed bin Jassim al-Thani has been appointed Chairman of Qatar Exchange, in a move apparently intended to raise the exchange’s international profile.

The structure of the new Board is as follows:

H.E Sheik Ahmad Bin Jassim Bin Mohammad Al Thani, Minister of Economy and Commerce, Chairman
Mr. Ali Bin Ahmed Al Kuwari, Representative of Listed Companies, Vice Chairman
Mr. Mohammad Hassan Al Saadi, Representative of the Ministry of Economy & Commerce, Board Member
Mr. Hamad Khalaf Al Maadadi, Representative of Brokers, Board Member
Mr. Fayez Al Boainin, Representative of QIA, Board Member
Mr. Rashid Bin Ali Al Mansoori, CEO of Qatar Stock Exchange, Board Member
Mr. Yousuf Mohammed Al jaida, Representative of QFCA, Board Member
Mr. Andre Went, Board Member
Mr. Waleed Jassim Al Musallam, Board Member

Natasha Shamis has been named Global Head Of Product at Liquidnet.

Swiss Finance Council (SFC) announced that Antony Manchester has joined its EU Representation Office in Brussels. Before joining the SFC, Antony was Head of the Economic, Financial and Tax Section of the UK Permanent Representation in Brussels for four years, and was the UK’s Financial Counsellor to the EU.

Financial Calendar

This week

GFI Group special meeting of stockholders to vote on the transaction with CME
Nasdaq Q4 Financial Results
ITG Q4 2014 Financial Results

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

Analyst Notes

CME Target Price Boosted By Deutsche Bank From $101.00 To $102.00 – “Buy” Rating
National Bank Financial Dropped Their Price Objective On TMX from C$57.00 To C$56.00 – “Sector Perform” 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.

Other stories

Canadian Securities Regulators Propose Derivatives Reporting Rules
MondoVisione

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