July 03 2013

elb2 Elsewhere EU Tax Commissioner Semeta has been saying he is happy with a reduced FTT. This is, as I have said before, nothing more than a trap. The Commissioner even qualifies his own remarks by stating it would be okay for the time being. Sorry to say it again but we cannot afford to lose focus: FTT must die. No ifs, no buts, get rid of it. Incidentally last week following my own full frontal over dinner, the architect of the FTT was stunningly mediocre in his defence of the tax at the FESE Convention.

NASDAQ sells IT to Istanbul is our lead story today, have a skim through EI and enjoy our comments too:

Public Markets

NASDAQ OMX and Borsa Istanbul Sign Strategic Partnership (subscription)

Wall Street Journal

PLY: The current vogue in BS buzz phrases (following on from “merger of equals” which translates into ‘domination of the losers,’ well apart from NYSE and Euronext where it just meant ‘shambles’) is “strategic partnership.’

This deal isn’t as ghastly as it could have been as NASDAQ have clearly sold a lot of technology so there is money amidst the peace and love fluffy hype component of this ‘co-operation’ (spelt: “I-T s-a-l-e”).

At the same time, I can’t help but note this phrase:

“This strategic partnership points to a long-term commitment which would benefit member firms and customers of both exchanges.”

Besides not actually believing this WILL result in much tangible benefit for these groups, might I raise a voice for the constituency for whom “Exchange Invest” was originally conceived: shareholders? Until exchanges stop being run as banker/broker vanity projects and wake up with shareholder value* on their mind every morning, well….well, there won’t be another Jeff Sprecher in exchangeland, that’s for sure…

*To clarify, I mean adding shareholder value, not just cutting costs one quarter to the next.

Nasdaq Asks Judge to Dismiss Suit Over Facebook IPO Role

Bloomberg

Nasdaq OMX Group Inc. asked a judge to throw out lawsuits against it by investors and traders over its role in Facebook Inc.’s May 2012 IPO.

PLY: I am sympathetic to NASDAQ here as compensation culture in the USA is out of hand. No, it wasn’t NASDAQ’s finest hour but the idea of suing because the IPO didn’t quite work really misses the point of when the market did function ultimately and besides anybody who recalls the Facebook IPO hype will recall the stunning greed moment of investors as they all expected to make a killing…

Listings on Tokyo Stock Exchange soar to 3400 with merger

The Japan Times

The number of companies listed on Tokyo SE will jump to some 3,400 when the bourse is integrated with the Osaka SE July 16, making it the 3rd largest bourse by listings after Bombay and Toronto…

Private Markets

Thomson Reuters to buy Tradeweb’s foreign exchange options platform

Globe and Mail

Thomson Reuters Corp. has agreed to buy the foreign exchange options business of Tradeweb Markets for an undisclosed amount.

PLY: An interesting ‘acquisition’ (remember Reuters is already the majority shareholder of Tradeweb) as TMR seek to bulk up their forex presence post-FXAll acquisition and clearly want to have a good forex options platform, their previous efforts having been unsuccessful in this regard. Probably a sound sell by Tradeweb too as it allows them to focus on the SEF-related world post Dodd-EMIR-Frank implementation which provides massive opportunity.

New online Gold platform launched

Straits Times

Gold may be hitting multi-year lows but that’s not a problem for the new Singapore Precious Metals Exchange, an online platform which allows investors to buy, sell, and store physical gold and silver.

Products

Abu Dhabi Bourse Preparing For Derivatives

FINCAD News

The Abu Dhabi Securities Exchange is currently preparing to provide its users with derivatives trading, after repeated delays to this plan.

China Bond Futures Get Green Light

NASDAQ

China’s State Council has approved the reintroduction of government bond futures, a step forward in plans to expand the domestic fixed-income market and signaling an end to an eighteen-year ban on the financial derivatives after a trading scandal.

Changes in investors/shareholders

Pan African investment firm boosts NASD trading platform on Nigerian Bourse

African Manager

The Pan African Investment Company, Heirs Holdings, has taken a strategic stake in the new National Association of Securities Dealers (NASD) trading platform which commences operations 1 July 2013 on the floor of Nigerian Stock Exchange (NSE), the company said.

PANA reports that NASD is an alternative trading platform created by the Association to bring more liquidity to Nigeria’s capital markets.

It has been licenced by the regulatory Securities Exchange Commission (SEC) to trade a broad range of instruments over the counter, including unlisted equities and bonds, in Nigeria .

Analyst Notes

Credit Suisse Boosts Price Target, Estimates on CBOE Holdings; Maintains “Underperform” Rating
CME Group Downgraded at Raymond James
Betfair Group Price Target Increased to GBX 975 by Analysts at Citigroup – “Buy” rating currently

Career Paths

ICAP Appoints Jim Bass to Head U.S. Natural Gas-Liquids Unit

Bloomberg

ICAP’s energy-brokerage unit appointed Jim Bass to head its expansion into the U.S. natural gas-liquids market.

Technology

HFTs are no longer just about the need for speed (subscription)

Financial News

While the polarised debate surrounding high-frequency trading continues apace, the world’s HFTs are getting on with their daily business and are quietly being forced to adapt and evolve.

PLY: A useful article outlining how ultimately the speed issue is becoming less important and therefore algorithmic traders need to find new ways to add alpha to their trading…

Crowdfunding

Clues to How the SEC Is Thinking About Crowdfunding

Businessweek

PLY: An interesting analysis glimpsing at some recent SEC remarks on crowdfunding which suggest they are being positive in trying to maximise the opportunity, as opposed to listening to the naysayers who if they got their way would tether jet aircraft with 100 tonne weights to stop them getting off the ground and hence make flight much safer…

De facto too the number of crowdfunding platforms makes retrospective regulation tough of course but note how, for instance Leila Bham, special counsel in the SEC’s Division of Trading and Markets, emphasised creating a “streamlined approach for crowdfunding broker-dealers and funding portals.” “The SEC is trying to write the rules in a way that will make crowdfunding a success.” – here’s hoping they succeed with a simple, succinct and logical rule book.

The Problems and Promises of Crowdfunding

Forbes

Crowdfunding promises to democratize funding of startups. But is that necessarily a good thing? Entrepreneurial finance experts Josh Lerner, Ramana Nanda, and Michael J. Roberts discuss the promises and problems with this method of funding small businesses.

PLY: A fairly elementary overview but worth reading…

Other stories

Emerging Markets Hit by Converging Forces (subscription)

Wall Street Journal

Countries from Turkey to Brazil to China are getting hit by a brutal combination of events, as economies slow, investors pull out cash, commodity prices tumble and protesters take to the streets—all fresh reminders that these markets can be difficult places to try to make money.

An outflow of funds from so-called emerging markets has picked up pace over the past month, triggered by expectations among some investors that the days of easy money globally are coming to an end as the U.S. economy recovers.

PLY: Not strictly an exchange investment article per se but given the long tail of global infrastructure we can invest in nowadays, worth reading as an excellent primer on what has been happening as the end of the taper whiplashed emerging markets…

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