July 30 2013

elb2 A big day with multiple results, various comments by the stories, happy reading:

 

Public Markets

Derivatives Boost NYSE Profit

Bloomberg

NYSE Euronext, beat Q2 estimates with net income rising 38 percent to $173 million (2012 Q2 $125 million). Earnings excluding some items were 63 cents a share, compared with the 58-cent median Bloomberg estimate.

PLY: Decent numbers by NYX and it will be interesting to see how the enlarged group improves when ICE take control…oh and of course my standard “it’s a derivatives world” mantra is writ large across these results.

Press release here

Hellenic Exchanges H1 Results

The consolidated net after tax profits of HELEX in Η1 2013 amounted to €35.8m vs. €7.1m in Η1 2012. The net after tax profits per share including bond valuation differences amounted to €0.55 vs. €0.12 in the corresponding period last year, and are significantly increased mainly due to the recapitalization of the systemic banks.

PLY: Once again HELEX remains a remarkably robust business in the midst of the undemocratic economic void which is Greece as ruled by the insanity of troika bailouts. True there is a big currency risk if/when Greece is released by the EU to default/leave the Euro. Nevertheless, the Greek exchange remains a dynamic business and profitable despite remarkably rough sailing weather.

MCX Q1 Profit Falls 7.1%

myiris.com

MCX, the largest commodity exchange in India, saw a 7.13% decline in net profit for H1.

Net profit stood at Rs 601.19 million (USD 10.06 mln) for the quarter ended June 30, 2013 as compared to Rs 647.36 million (USD 10.83 mln) for the same period in the previous year.

PLY: Commodity bubbles being pricked probably didn’t help here although MCX has now upped their market share to an eyepopping 90% in Indian commodities despite clear competition from NCDEX and others… A remarkable statistic which doubtless upsets some Indian regulators who have made little secret of their discomfort at MCX’s success.

Japan Exchange Group Q2 Results

Japan Exchange Group, (”JPX”) the merged entity of Tokyo & Osaka SE’s generated operating revenue of ¥36,099 million (USD 368.28 mln), operating expenses of ¥18,156 million (USD 185.22 mln), operating income of ¥17,943 million (USD 183.05 mln), and ordinary income and income before income taxes and minority interest was ¥18,655 million (USD 190.31 mln), and net income was ¥11,209 million (USD 114.35 mln).

PLY: Abenomics will dictate the pace in Japan more than even the global outlook, especially after his recent emphatic election victory.

Tullett Prebon: Trading Still Challenging

Reuters

Tullett Prebon Plc reported a 3% drop in H1 revenue, as challenging market conditions and subdued trading weighed on the inter-dealer broker’s business.

The London-based brokerage said revenue reached 439.8 million pounds in H1, down from 455.1 million a year earlier. The fall came despite a late surge in trading volumes in May and June, triggered by a rise in benchmark bond yields.

PLY: The taper arrived too late for these results but demonstrate the potential in IDBs, if only we had a crystal ball to work out which of the approximately 2.5 million SEFs/OTFs being conceived et al will actually succeed. Moreover clients for multiple regulatory related reasons as well as low rates overall are mostly still sitting on their hands in these markets. There is a volume explosion still to be played out…but who will benefit?

ISE To Launch 12th US Options Exchange Next Week

The Wall Street Journal

ISE has received SEC approval to launch its second U.S. options exchange, ISE Gemini, Aug. 5.

The new exchange will adopt a pricing model that will put it in competition with a few other all-electronic exchanges, including Nasdaq Options Market & NYX Arca. That model pays a rebate to brokerage firms that direct liquidity to the exchange.

PLY: Rebates are a hot topic given Sprecherian opposition of late while the success of Gemini as it rolls out will be interesting to watch. It was intriguing to hear ISE CEO Gary Katz discuss his views on the US options market at Young Markets last month.

Nasdaq Boosts NLX To Break Rates Duopoly (subscription)

Financial News

Nasdaq OMX injected $54 million into its new London futures exchange during Q2, an amount equivalent to just over 60% of the group’s net Q2 profits.

PLY…and most of it was apparently regulatory capital, with the annual operational run rate somewhere in the region of $8-$10 million I would suppose extrapolating the gross costs during set-up…

FCA Working With On LME On Warehouse Problem

4-traders.com/

PLY: Now that it is a political hot potato on both sides of the Atlantic, the FCA “is working closely with LME on the exchange’s efforts to fix its metals warehousing system.”

Bourse Rejects Higher Public Float Proposal

BusinessWorld Online Edition

PLY: Meanwhile in the Philippines, the PSE is under regulatory duress to raise free floats from the now more strictly enforced 10% to 15% but is currently rejecting 20%…

Dividend news

NYSE Euronext will pay $0.30 per share with a record date of September 16, 2013 and a payment date of September 30, 2013. The anticipated ex-date will be September 12, 2013. However, this Q3 2013 dividend is payable on the payment date only if the ICE transaction has not been completed as of the record date.

Hellenic Exchanges will pay a special dividend (share capital return) €0.03 per share (in total €1.96m), ex-date 25.9.2013 (record date: 27.9.2013), while the payment of the €0.03 will commence on 3.10.2013.

Tullett Prebon proposed a 5.6 pence per share interim dividend payable November 14 to shareholders of record on October 25.

Private Markets

Poland’s Central Clarity: CEO Iwona Sroka, KDPW

www.waterstechnology.com

PLY: Dr. Iwona Sroka ought to have a higher profile in the future as the Polish government is supposed to privatize the KDPW soon. That said, it may be a sale/merger to Warsaw SE as has recently occurred in some Polish energy privatisations. Either way, KDPW is the largely unknown giant in the New Europe and this (slightly breathless) profile is a good primer on WSE and KDPW et al…

JPMorgan Exits Physical Commodity Trading

huffingtonpost.com

PLY: Highly pertinent news for financial market infrastructure given the ‘flack’ flying over warehouses et al. As I was clear in calls last week following the explosive Senate hearing: the banks need any capital infusions they can get and with management under duress about gouging/market manipulation accusations from the sorts of clients whose bonds/stock they issue, there is no question banks will be leaving the commodities business and making warehouses a lower return but still lucrative commoditised storage franchise in future.

Azerbaijani NBCOs Get Access To Money Market

azernews.az

Baku Interbank Currency Exchange plans to launch a new version of the stock exchange e-trading system to help spur money market development.

PLY: Before anybody out west makes the remotest quip about the new Bakibid…how do you know it’s not more legitimate than LIBOR?

Products

August 12 Launch For 25 New ICE Oil And Freight Futures Contracts

The new contracts, which will be available for trading at ICE Futures Europe and cleared at ICE Clear Europe, include 24 global crude oil, gasoline, middle distillate, fuel oil and ethanol futures and options contracts and one wet freight futures contract.

PLY: While hydrocarbon benchmarks may still be WTI/Brent-centric, the market is moving to a multi-benchmark world outside of the futures business. Exchange trading will go the same way…

Ghana Plans To List 750 Million Eurobond On Ghana SE

Myjoyonline.com

Ghana sets pace in the West African sub-region as it plans to list the country’s second Eurobond on the Ghana Stock Exchange (GSE) next month.

The move is expected to give local investors an opportunity to actively trade in the Bond. the second sovereign to trade on a local bourse in Africa, (JSE were first).

PLY: On the list of good men who have worked hard to develop their local markets, Ghana SE Chairman Dr Sam Mensah deserves a high ranking. Plaudits too for the Irish SE team under Deirdre Somers who will also list of the same bond (at least partly thanks to their faster turnaround time).

Ethiopian Commodity Exchange To Trade Mung Beans

2merkato.com

ECE will introduce mung beans to its trading floor to help hedgers exporting the commodity.

Indexes

CBOE Looks To Extend VIX Trading Hours

The Wall Street Journal

The fear trade will be available for an extra 45 minutes a day starting in late September…

Career Path

DME Appoints Head Of Customer Relations (press release)

4-traders (press release)

DME, the premier international energy futures and commodities exchange in the Middle East, today announced the appointment of James Lear as Head of Customer Relations.

OCC Announces Leadership Changes (press release)

Marketwire (press release)

With the retirement of Chairman and Chief Executive Officer Wayne P. Luthringshausen December 31, 2013, OCC are separating the top roles and current OCC President, COO and Treasurer, Michael E. Cahill will become CEO effective January 1, 2014. The Board’s process for filling the new Executive Chairman position is ongoing.

Financial Calendar

JSE Limited: Half-Year Profit Expected To Triple

iol.co.za

JSE Limited advised yesterday that its basic earnings a share were expected to be between 180 percent and 200 percent higher than the R1.17 (USD 0.11) a share it reported in June last year. Headline earnings a share were expected to be between 20 percent and 40 percent higher than the previous year’s R2.455 (USD 0.25).

JSE Ltd. results for the six months 2013 are expected to be released on August 13
Betfair schedules AGM on 5 September at 11.00 a.m.

Analyst Notes

LSE Rating Reaffirmed “Outperform” rating by Credit Suisse
NASDAQ OMX Price Target Increased to $33.00 by Credit Suisse: “Neutral” rating
BMO Capital Markets Increases Charles Schwab Price Target to $24.00, reiterates “Outperform” rating.
Numis Securities Ltd reaffirmed “Buy” rating on Betfair
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.

Changes In Investors/Shareholders

Charles Schwab President and CEO Walter W. Bettinger sold 1,048,900 Shares on 07/24/2013 at an average price of $22.16.

Other Stories

Ryerson University Strikes Partnership With Bombay SE

Globe and Mail

A project that started in one room at Ryerson University three years ago will now be a bridge for Canadian start-ups looking to expand to India, as well as Indian start-ups looking to enter the Canadian market.

The Digital Media Zone at Ryerson has partnered with the Bombay Stock Exchange (BSE) in a new initiative to expand the reach of the digital economy in the two countries.

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