July 17 2013

elb2
The LSE group takes another great stride towards wiping out the failed nightmare that was Taurus all those years ago with an expansion of post trade services through a new Luxembourg CSD. A fascinating move and a good expansion of the existing Monte Titoli infrastructure from Italy which ought to help make the CSD implementation smoother.

Meanwhile it looks as if Bourse Africa is alive and kicking while the cyberattack paper from IOSCO/WFE is worth consulting. Elsewhere IBKR and Scwab results and much more – happy reading:

Public Markets

LSE To Expand CSD Services

LSE will establish a new Central Securities Depository (CSD) in Luxembourg. The CSD will provide a full range of custody and settlement services and will build on the existing infrastructure of the Group’s Italian CSD, Monte Titoli.

PLY: With customer demand for Luxembourg and JP Morgan confirming an intention to use LSE as provider of settlement, custody and asset servicing services for its international collateral management business, LSE make another leap forward. Xavier Rolet deserves plaudits for developments that would have been deemed inconceivable only a few years ago.

ICE Announces New $600 Million Credit Facility

Benzinga

A new $600 million 364 day revolving senior unsecured credit facility administered by Wells Fargo increased from $400 million in the previous facility.

PLY: ICE can fund prepayment of senior notes and adds to its firepower with a useful facility.

Interactive Brokers Q2 Net Up 29% On Brokerage Gains (subscription)

Wall Street Journal

Interactive Brokers’s (IBKR) Q2 earnings jumped 29% as the electronic brokerage reported gains from new customers and more trading activity per customer.

Interactive Broker’s electronic brokerage unit, used mainly by professional traders and small hedge funds, contributed the lion’s share of revenue growth. The segment reported that net revenue climbed 24%, while segment earnings were up 37% to $123.3 million.

Overall, IBKR reported a profit of $10.3 million, or 14 cents a share, up from $8 million, or 9 cents a share, a year earlier.

Schwab profit misses estimates

Reuters

A 7% slide in Q2 profit pushed shares down 4% as rising expenses outstripped forecast-beating revenue.

Client trading in stocks and bonds remains muted while expenses have stayed high due to technology projects and pay raises aimed at keeping salaries competitive after cuts made during the recession.

Q2 net profit fell to $256 million, or 18 cents per share, from $275 million, or 20 cents per share, a year earlier. Revenue jumped 4 percent to $1.34 billion, topping forecasts, but expenses rose 9 percent to $925 million.

Private Markets

Myanmar aims to set up first stock exchange by 2013

Channel News Asia

Myanmar government is pushing hard to set up its first stock exchange, modelled after the Japanese and Singapore Stock Exchanges.

India’s NSEL says govt asks not to launch new spot contracts

Reuters

India’s National Spot Exchange (NSEL), owned by Financial Technologies (India) Ltd, said on Tuesday it has been asked by the federal government not to launch contracts of new commodities until the government finalises a new regulatory framework.

Products

Exar to transfer stock listing to NYSE

Miami Herald

Chip maker Exar Corp. said Monday that it will transfer its stock listing to NYSE from Nasdaq as it works to “maximize shareholder value” with ticker symbol “EXAR” from July 29th.

Indexes

Ghana SE index to trade on Bourse Africa

Myjoyonline.com

The Mauritius based FT India backed futures platform of Bourse Africa will list the Ghana SE Index.

PLY: Exciting news as Bourse Africa comes to fruition. Having been in the works since 2008, I wasn’t aware it was trading yet…and the website appears to confirm it is still in pre-launch mode.

HKEX Plans To Relaunch CES 120 futures next month

aastocks.com

HKEX plans to introduce the first CES China 120 Index (CES 120) futures that cover A shares and H shares on 12 August.

PLY: H shares may not be as popular as they have been and A shares have an inherent domestic advantage. These indices must be useful tools for local and foreign investors alike.

Technology

Exchange Data Highlights Systemic Threat From Cyber Attacks

Finextra

Just over half of the world’s securities markets have fought off intrusions by cyber-attackers over the past year, according to figures released by IOSCO and the WFE.

While cyber-crime in securities markets has not had systemic impacts so far, it is rapidly evolving in terms of actors, motives, complexity and frequency.

PLY: Cyber attacks first came to prominence about a decade ago when I discussed attacks on Intrade the sports exchange / prediction market which came under attack from some form of Russian mafia operation. Clearly the risk will only increase and indeed the likes of Mt Gox in Bitcoin have encountered severe attacks in recent times.

NYX: NYSE Technologies & Citadel Securities First to Distribute Grey Sheet OTC Quote Feed Globally

4-traders (press release)

NYSE Technologies has reached an agreement with market-maker, Citadel Securities LLC, to offer the Citadel Securities Grey Sheet OTC Quote feed via SuperFeed™.

The Grey Sheet feed provides actionable real-time quotes for approximately 6,500 international OTC equity securities not found on any exchange but actively traded by investors around the world.

Career Paths

Christopher Ehrman New director of CFTC Whistleblower Office

Automated Trader

The Whistleblower Office, created by the Dodd-Frank Wall Street Reform and Consumer Protection Act, operates a program through which the Commission may reward individuals who voluntarily provide original information about violations of the Commodity Exchange Act.

Analyst Notes

Macquarie reaffirmed their neutral rating on shares of NYSE Euronext
NASDAQ OMX Group Given neutral rating by Compass Point
CME given a “market perform” rating on the stock by Keefe, Bruyette & Woods
NYSE Euronext was upgraded by Keefe, Bruyette & Woods from “market perform” to “outperform”

ICE Given $225.00 Price Target at Keefe, Bruyette & Woods

Mideast Time

Keefe, Bruyette & Woods set a $225.00 price target on ICE.

A number of other firms have also recently commented on ICE. Macquarie reiterated an “outperform” rating on ICE July 11th with a $207.00 price target. TheStreet reiterated a “buy” rating July 10th and June 27th.

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

Equity Crowdfunding: SEC Rule Review

CrowdCheck

PLY: This is long, dull, pedantic, and absolutely the best review I have yet seen of the new SEC rules concerning marketing to accredited investors passed last week. A useful reference guide.

Crowdfunding Market Will Be Learning Process

Financial Post

PLY: Rotman/NBER study shows great potential of crowdfunding. Media feel obliged to write up the shock, horror, probe end of the discussion while not accentuating sufficiently the desperate need for SME funding and the huge benefits to society to be had from breaking through a broken funding system for start-ups and small enterprises…

Other stories

SGX launches ‘Born to Trade’ initiative

Automated Trader

SGX has launched its “Born to Trade” initiative to attract new derivatives traders to the market. The initiative includes several features such a new microsite for trading professionals and potential traders to interact and exchange trading stories.

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