July 10 2013

elb2 The big news today is clearly LIBOR. ICE has won the battle through its proxy NYX and clearly that adds a lot of possibilities to the ICE empire and something is bound to flow to the bottom line through diverse routes.

Commissioner Bart Chilton raises the obvious questions, although whether the concerns will be realised is another matter – exchanges would have serious problems with survival if their impartiality on settlement were to be questions and indeed they have juggled such settlement issues for centuries…

Elsewhere NASDAQ retain a frenetic pace of announcements, the Jamaican IPO is oversubscribed and the Baltic may be at least partially in play… News from India, Japan, China and elsewhere too, enjoy!

Public Markets

NYSE Euronext To Take Over Scandal-Hit Libor

Reuters

How Libor Rounds Out Jeff Sprecher’s Iconic Portfolio (subscription)

Wall Street Journal

CME Foresees No Changes In NYSE-Libor Deal (subscription)

Wall Street Journal

PLY: This is another good deal for ICE and a move forward for LIBOR which has been badly damaged by the fixing scandal. Moreover, while it does not mean a problem for CME per se (although they may be somewhat concerned at the move) at the same time, if Jeff Sprecher cannot make money out of LIBOR to a greater extent than the uncommercial British Bankers Association then I would be utterly shocked…

NASDAQ OMX And NGX Announce US Physical Energy Alliance

MarketWatch

NASDAQ OMX Commodities and Natural Gas Exchange Inc. (NGX), a wholly-owned subsidiary of TMX Group, today announced that they have entered into a strategic alliance.

PLY: Can an alliance help the fight back against ICE and CME? Interesting to see, albeit with all my usual caveats on alliances.

Tokyo Exchange President Expects IPOs To Surge After Cash Merger

Businessweek

Newly appointed TSE Group President & CEO Akira Kiyota expects initial public offerings to surge this year after the Tokyo and Osaka bourses integrate their cash-equities markets on July 16.

The group is targeting 70 IPOs in 2013, up more than 40 percent from last year’s 48, as the combined market makes it easier for companies to go public.

PLY: A big leap but then again the game has changed somewhat in Japan since the arrival of Abenomics…

Will Bombay SE SME Platform Buckle Up To Bring In More Investors?

CIOL

It has been seven months since the Bombay Stock Exchange (BSE) launched its dedicated SME platform. Listings have more than doubled from 11 to 22, yet a reality check on the platform throws up mixed results.

PLY: It remains early days for this initiative and part of the problem is doubtless structural – the Indian market has a lot of retail capital and not so much institutional for instance and retail investors have a lot of liquid content to trade already.

Private Markets

Suitors Circle Baltic Exchange Futures Platform

Reuters

London’s centuries-old Baltic Exchange has received interest from exchanges and financial operators, including LME and CME, for its dry freight derivatives platform.

PLY: Baltex is an interesting platform but brokers prefer the OTC markets for now. Nonetheless, an interesting opening for either another exchange or internal development if the Baltic exchange can hold its nerve on this one. Certainly in the long term, selling Baltex would presage in my mind the decline of the Baltic overall which continues to operate a fascinating niche marketplace in freight. Sooner or later Baltex will work, is the calculation of LME, CME et al.

Betfair Confirms Charlton Sold 11 mln Shares

Transaction details here

Reuters

Betfair Group PLC confirms charlton sells 11 million shares, 10.6 percent stake

PLY: Softbank retains a significant stake but nonetheless has reduced its holding vastly, presumably to pay for its acquisitions elsewhere beyond the market infrastructure parish.

Jamaica SE IPO Over Subscribed

rjrnewsonline.com

The Jamaica Stock Exchange’s (JSE), IPO has been oversubscribed. The offer of 38.2 million shares, which opened on Friday, closed ahead of schedule on Monday. Shares were oversubscribed by 41 per cent. More than 150 applications were received from investors.

PLY: Welcome to the world of publicly traded exchanges!

Shanghai Stock Exchange E-interaction Platform Opened

The e-interaction platform of the Shanghai Stock Exchange (SSE) embraced its soft opening on July 5, 2013. As a communication platform available to all market participants for free, the e-interaction platform, with the participation of all sides, is also the first “Social Platform” of the securities market built up by the SSE. It will not only facilitate the “Zero-gap” contact between listed companies and investors, but also provide an innovative “Foothold” for the SSE’s market-oriented regulation.

PLY: In a jargon rich statement, the SSE have created an IR platform.

India – Govt To Take Action Against NSEL Soon

Hindu Business Line

The government will soon take action against the National Spot Exchange Ltd (NSEL) for violating certain rules while offering commodity contracts, Food and Consumer Affairs Minister K.V Thomas said today.

PLY: Given that NSEL is controlled by FT India (also behind the MCX) and with whom there appears to be considerable government enmity, it will be interesting to see how this case develops..

Technology

Data Providers Caught In Regulatory Speed Trap (subscription)

Financial News

The regulatory spotlight has once again fallen on relationships between market infrastructure providers and high-frequency trading firms – a growing and influential tranche of the former’s client base.

PLY: Good to see Adrian Fitzpatrick of Kames Capital quoted here. Certainly there needs to be clarity in the distribution of data – although at the same time, there are surely some pitfalls to consider? I mean should movies all be released simultaneously to the market on all formats instead of cinema first, then rental, then purchase? My concern is that eventually all subscription information could be rendered as having to be distributed simultaneously and free of charge…

Bahrain Bourse To Upgrade To NASDAQ OMX X – stream

MarketWatch

PLY: Another handy upgrade contract for NASDAQ OMX Group to replace Horizon with X-stream at Bahrian Bourse (BHB). Additionally, BHB has reconfirmed its commitment to NASDAQ OMX’s post-trade solution. The upgrade is estimated to be rolled out by late 2014.

TMX Atrium Continues European Growth

TMX Atrium, provider of smarter infrastructure solutions for the financial community, today announced that it is expanding its connectivity footprint by investing in mini-points of presence (POPs) in Paris and London.

Products

NYSE Liffe To Launch New EU Wheat Futures Contracts

Reuters

European commodities exchange NYSE Liffe will launch July 15 four new futures and options contracts on the Paris-based milling wheat markets as part of an overhaul of its flagship grain futures.

NYSE Liffe will open contracts for Sept. 2015, Dec. 2015, March 2016 and May 2016 delivery, bringing the total number of milling wheat contracts open to 12.

Career Paths

Lynn Martin Named NYSE Liffe US CEO (subscription)

Futures and Options Intelligence

NYSE Euronext has named Lynn Martin as CEO of its US futures exchange, replacing the outgoing head Tom Callahan who has joined Blackrock.

Adam Bradley Joins ASX

On Monday, 8 July 2013, Adam Bradley joined ASX in the newly created position of Head of Sales Technical Services.

Analyst Notes

Charles Schwab Corp. stock “Buy” rating reaffirmed by equities researchers at BMO Capital Markets
Keefe, Bruyette & Woods lifted price objective on shares of Charles Schwab Corp to $18.00 – “Underperform” rating
Charles Schwab Corp. Given “Buy” Rating at TheStreet

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.

Crowdfunding

Crowdfunding 2.0: What Will It Look Like?

Dowser

Over 5 centuries ago, in Northern Italy, the Renaissance brought in a bold new chapter of thinking, an expression of culture, scientific and intellectual discovery. In modern vernacular, we would call it ‘disruptive.’ It really meant, ‘rebirth.’ We are now in a modern movement of rebirth- driven by technology.

Crowdfunding will play a key role in this new tech-driven renaissance. Crowdfunding with purpose, to be specific.

PLY: An interesting article on one platform founder’s view of the future…

Crowdfunding: Risky Or Rewarding?

3News NZ

PLY: A simple tale of yoga and business development in New Zealand…

Other stories

James Moore: Regulators Love To Give Exchanges New Toys

The Independent

Exchanges are in vogue right now. The European Union’s competition people love them. Last week they brandished a big stick at a group of 13 City banks after exchanges complained that they had been shut out of the lucrative credit derivative market.

PLY: An interesting article. One simple fact is that exchanges provide cheap commoditised services to all users. Banks don’t.

Commodity Warehouse Ownership Rules Need Rethink – Report

Reuters

Conflicts of interest over ownership of commodity warehouses can inflate prices of raw materials such as aluminium, a report by two Brussels think-tanks said on Tuesday.

It is likely to add to market pressure to reform the London Metal Exchange’s (LME) storage system, in which companies such as Glencore and Goldman Sachs have been able to make profits from holding big inventories.

PLY: The warehousing system clearly needs reform to help the market better relate to end users and consumers.

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