July 30 2015

 elb2A bumper dose of results, ITG may be copping a massive fine, NLX lives (or as Monty Python might have responded “it was coughing up blood at lunchtime).” Wilmington bourse gets unanimous council support, SGX adds its name to merger potential roster…can the investment bankers sectoral good times roll once more?

Public Markets

Euronext Q2 2015 Results

Euronext

vs Q2 2014: Third party revenue and other income Eur 130.1 mln, up 11.9%, profit for the period 28.6 mln up 0.2%

PLY: Euronext impresses again…

SGX Full-Year Results FY2015

SGX

vs 2014: net profit of S$348.6 million ($254 mln), up 9%, on revenue of S$778.9 mln ($568.5 mln), up 13%

PLY: Old dog, ongoing life, rearrange to make a famous phrase or saying.

WSE Q2 2015 Results

WSE

vs Q2 2014: revenue of PLN 77.2 mln ($20.4 mln), up 11.4%, net profit of PLN 27.0 mln ($7.14 mln), up 32%

PLY: Rather good numbers from GPW. The politics of Poland may be an issue ahead while the nation mourns the shock death of its richest man Jan Kulczyk.

BGC Partners Q2 2015 Results

BGC Partners

vs Q2 2014: Revenues for distributable earnings $684 mln, up 59.1%, adjusted EBITDA $109.1 mln, up 70.6%, GAAP net income for fully diluted shares $13.3 mln, up 19.4%

Thomson Reuters Q2 2015 Results

Thomson Reuters

vs Q2 2014: revenues $3,038 mln, down 4%, operating profit $405 mln, up 6%, diluted EPS $0.33

SGX Open To Making Acquisitions, New CEO Loh Says

Jonathan Burgos & Chanyaporn Chanjaroen – Bloomberg

New SGX Chief Aiming For Bigger, Better Listings

Tan Weizhen – Channel NewsAsia

“If opportunities fit our strategy, we will always evaluate such opportunities,” Loh said.

The bourse is working on attracting bigger IPOs, but results “will take time”, says CEO Loh Boon Chye.

Read our Premium Magnus Bocker – SGX Reflections.

PLY: Just what can all these predators buy? That may be the issue – well of course they can all have a SEF or Bond platform acquisition but there is a vague paucity of immediately apparent digestible morsels on the block right now which make commercial sense.

FXCM Stock Trading Set To Be Sold To AS Expobank

LeapRate

Apparently FXCM is in advanced negotiations to sell it UK regulated CFD arm FXCM Stock Trading to AS Expobank. Controlled by Russian multimillionaire Igor Kim, Expobank is one of the oldest banks in Latvia, with a branch in Cyprus and Hong Kong rep office.

PLY: This entity was a separately regulated arm of the ODL business FXCM acquired in 2010 for a total cost of $52 million. Jefferies are recovering their cash bit by bit:

FAO: FXCM also sold Faros Trading LLC to Jefferies Group in April and its Hong Kong business to Rakuten Inc. for $36 million in May.

Read our Premium FXCM Stakes Sales Brief.

Athens SE Will Not Reopen On Thursday – Unlikely To Open On Friday

MondoVisione

Glitch Prevents Athens SE From Reopening This Week

Kathimerini

A technical problem is preventing the Athens SE from reopening after more than a month of being closed, as the country’s banks are not in a position to support its relaunch this week.

The computer systems of the Greek banks are not yet able to create new accounts for Greek investors who would participate with new money in stock trading once the bourse reopens, probably next week.

PLY: I am impressed that anybody thinks there might be new Greek investors (hmmm, unless can they buy stock with a hope they can sell it overseas in due course…

DB1 Issuing €500m+ Hybrid Bond

Joel Lewin – fastFT

This is only the second euro-denominated hybrid bond sold by a European issuer since April. Danish group Dong Energy pulled off a €680m deal in June. In April alone there were nine deals.

PLY: Interesting structure providing DB1 with some flexibility lest it might wish to repay the bond early…that won’t silence the claims an ISE disposal is a matter of when, not if, which admittedly is shouted loudest by the investment bankers who favour a spot of fee income to brighten their Christmas.

ITG May Pay Record $20.3m Penalty To SEC (subscription)

Nicole Bullock – Financial Times

ITG said it may pay a record penalty of $20.3m to SEC for violations at a prop trading pilot ITG ran in 2010 and 2011.

PLY: For those who believe hyperinflation has been vanquished, look not (yet) at the post QE world but just pay attention to the way US government ratchets up its fines. Those (at the time) apparently swingeing settlements with Liquidnet (2014) and Pipeline (2011) now look like small change by comparison…

No CFTC Funding Without Reauthorization

Peter Schroeder – The Hill

No Increase For CFTC Without Dodd-Frank Reforms

Philip Brasher – Agri Pulse

House Agriculture Chairman Mike Conaway pledges to fight any increase in funding for CFTC until Congress agrees on a new authorization law.

The House in June passed a reauthorization bill that among other things would require CFTC to analyze the costs and benefits of all new rules, but that and other provisions face stiff resistance from Senate Democrats and the White House.

One of the issues the House bill seeks to address is a long-running dispute with the EU over its failure to recognize the U.S. derivatives regulations as equivalent to the EU’s. Terrence Duffy, Executive Chairman & President of CME, said the EU position puts U.S. exchanges as a disadvantage and is already reducing liquidity in the U.S. market.

ESMA Updates List Of Authorised CCP & Public Register – BME Clearing Extends Services

MondoVisione

BME To Offer Swaps Clearing Service For Small Spanish Banks (subscription)

Joe Rennison – Financial Times

Spanish exchange set to launch a new service aimed at helping small Spanish banks comply with new derivatives rules…

China ‘Still Learning How Stock Markets Work’, Says IMF Chief

Daily Telegraph

“It’s a relatively young market, and there is an element of a learning curve” among investors, companies and the authorities, Christine Lagarde, MD of IMF, said.

Read our Premium China Capital Markets Transformation Brief – Main File

PLY: The emollient diplomacy of Christine Lagarde is once again evident.

Uganda: NSE Links Up With Uganda Share System

John Gachiri – allAfrica

The East African Securities Exchange Association (EASEA) inter-depository transfer mechanism is now in place.

Read our Premium Rise of Africa Brief – Part 5.

Private Markets

$15M Bond For Wilmington SE OK’d

Xerxes WIlson- The News Journal

Nick Niehoff, President & CEO of Delaware Board of Trade said the project will be the first of its kind in the US and will capitalize on an emerging corner of the financial market. The New Castle County Council on Tuesday approved backing a $15 million revenue bond for the venture.

PLY: An interesting deal and fascinating to see the council lending it money…

Adel S Al-Ghamdi: Saudi SE Opts For Quality

cfi

Read our Premium Saudi Arabia Opening Capital Markets – Brief.

Nigeria May Compel Multinationals To List On NSE

Adebayo Hassan – Premium Times

The Speaker of the House of Representatives, Yakubu Dogara, lamented the refusal of multinational companies to list on the Nigerian SE, expressing the need for a law to reverse the trend.

PLY: Hmmm, and they will just be delighted to do IR then? Not sure the forcible listing concept works – privatisation sure but pushing private firms to list…hmmm…

Vladivostok May Get A Diamond Exchange

RBTH

FAO: QV planned launch of Singapore Diamond Investment Exchange (SDiX), targeted to go live in September 2015, as reported earlier this month.

Dominican Securities Exchange Needs A 5-Year Govt ´Push´

Dominican Today

Dividend News

CBOE BoD approved a 10% increase in quarterly cash dividend, to $0.23 from $0.21 per share of common stock from Q3 dividend, payable September 18, 2015 (to stockholders as of September 4).

SGX BoD proposed a final dividend of 16.0 cents FY2015, bringing the total to 28.0 cents, unchanged from 2014.

BGC Partners’ BoD declared a quarterly cash dividend of $0.14 per share payable September 4, 2015 to Class A & Class B stockholders as of August 21, 2015.

Thomson Reuters – quarterly dividend of $0.335 payable September 15, 2015 to shareholders as of August 20, 2015.

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX and FTIL flat.

NSEL-FTIL Merger Issue: Govt To Seek More Time From Bombay High Court

Rajat Arora – The Economic Times

The court had in April given the government time until July 31 to come up with the final order. However, the government is yet to complete the review of 19,000 suggestions and objections.

PLY: The best idea would be to abandon the whole daft process and instead make a donation equivalent to the time saved by civil servants reviewing what amounts to the willful abandonment of India’s corporate code.

Maharashtra To Set Up Special Court To Hear NSEL Matters

Ashish Rukhaiyar & Makarand Gadgil – Livemint

Nearly two years after the settlement crisis at NSEL became public, the Maharashtra government is creating a special court to hear matters and speed up the process of recovering investors’ money.

Read our Premium NSEL Scandal Brief – Main File

PLY: Cautious optimism? Perhaps misplaced…but I sincerely hope not.

Technology

Technical Disturbances – NASDAQ OMX Credit SEK Indexes

NASDAQ OMX

Reported issue now resolved.

David Cameron Backs Manifesto To Make UK A World Leader In FinTech

Lynsey Barber – City A.M.

The Prime Minister has lent his support to the five-year plan which aims to grow investment in the sector to six times its current level and create thousands of jobs.

The manifesto, created by FinTech’s trade body Innovate Finance, outlines ambitious goals to attract $8bn of investment, for the UK to become the global home of 25 world leading FinTech companies based on IPO, global market share or valuation, and to create 100,000 jobs by 2020.

PLY: I am unconvinced Innovate Finance is a broad trade body although it has splendidly lavish offices just like most fintech startups don’t. The pure irony of ‘Tory’ Dave launching a Stalinist 5 year plan created by bureaucrats is amusing. Presumably it has regular outbreaks of innovation at neatly spaced increments? Wonder where the tractors fit in?

Blockchain & Wealth Management Should Be The Next Trends In FinTech: First Startupbootcamp Fintech Demo Day In Singapore

MondoVisione

Products

Nasdaq NLX In Talks Over New Product Launch (subscription)

Luke Jeffs – FOW

Nasdaq NLX has opened talks with clients about launching a single bond future to complement its established rates products as part of a broader effort of the exchange to reinvent itself.

Read our Premium NLX Brief.

PLY: It is not clear whether the discredited NLX farago means “single bond” in terms of type of contract or anticipated buy side volume.

Meanwhile, avid readers of transcripts may have noted that after the obligatory Rich Repetto / Chris Allen questions on the NASDAQ Q2 results, Brian Bedell of Deutsche Bank’s erudite intervention provoked the following remarks from Bob Greifeld:

“So let me start by saying that NLX I think had a strong quarter. Not visible obviously in the financials of the market share. But with respect to engagement with our customers we had one of the large banks come live for the first time on NLX just last week and on discussions with the proposed members of NLX 2.0 continues and we’re also happy to have come to a successful conclusion with our partners on NLX 1.0. So that’s there. We’re still excited by their prospects.”

…lest you haven’t been able to quite follow this, let me assist with a spontaneous translation from confcall-speak:

‘NLX’s costly vapourware is now so difficult to measure it cannot be quantified by any actual business metric.’

– I think that pretty much sums up this, er, intriguing, statement….If NASDAQ want to save face they can at least roll NLX into the much lower cost base of NFX and have done with it. Let’s face it, the chance of a return on capital given the historic cash burning hubris of NLX, remains about as plausible as Greece repaying its creditors.

NSE Delays Derivatives Market Launch To Q3

Reuters

Nairobi SE plans to offer derivative instruments, becoming the second bourse in Sub Sahara Africa to do so after JSE.

Read our Premium Rise of Africa Brief – Part 5.

Indexes

CBOE Introduces 10 Options-Based Strategy Performance Benchmark Indexes

PRNewswire

They are designed to highlight the long-term utility of options as risk management and yield enhancing investment tools. CBOE will disseminate intra-day values for the new benchmarks beginning Monday, August 3, 2015.

Career Paths

SEC announced that Daniel M. Hawke, chief of the Division of Enforcement’s Market Abuse Unit and former Director of the Philadelphia Regional Office, is leaving the agency after 16 years of service.  He will step down in August to return to the private sector.

Bloomberg reports that RBC promoted Haider Ali to a new position overseeing algorithmic strategies for fixed income and currencies. Ali, who was previously in the equities group, will lead a team responsible for improving RBC Capital Markets’ fixed-income electronic trading, initially focusing on futures and U.S. interest rates. He’ll be based in New York and report to Jeff Fields, head of North American FIC sales, and Vimal Patel, who runs global algorithmic trading.

PLY: Will this spawn the next IEX…I wonder…

Finextra reports that Ripple Labs named Michael S. Barr, former official at the U.S. Department of the Treasury, a Senior Fellow at the Center for American Progress and the Brookings Institution, as an advisor to the company.

What The City Wants From The FCA, After Wheatley (subscription)

Financial News

The UK government is conducting a global search for a new Financial Conduct Authority CEO.

PLY: Am I alone in wondering how in an age of such extensive disintermediation, the blob still has this bizarre belief that recruitment consultants still add value to the process?

In terms of a new head of the FCA, an efficient manager would be a great start.

Financial Calendar

30.07.2015

CME Q2 2015 Financial Results

SunGard Data Systems Q2 Financial Results

CBOE Q2 2015 Financial Results – 31.07.2015

New announcement

FXCM Q2 2015 Results – Thursday August 6, 2015

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

Analyst Notes

Credit Suisse Reiterated Their “Outperform” Rating On LSE

A full table of current analysis can be found on our Analyst Ratings page which is updated daily.

Crowdfunding

Seedrs Raises $15.6M To Launch In US

Mike Butcher – TechCrunch

 

Seedrs has raised a $15.6 million (£10 million) Series A round led by Woodford Patient Capital Trust plc (WPCT) & Augmentum Capital (owns a stake in Zopa too), the money from which will be used to launch in the U.S. market. Seedrs had previously raised $7.2 million from Faber Ventures and it’s own crowdfunding campaign.

Funding Circle To Float Fund To Invest In Small Business Loans (subscription)

Judith Evans – Financial Times

Funding Circle is seeking to raise £150m for the launch of an investment trust later this year, becoming the first P2P platform to float its own fund.

Other stories

DTCC Testifies In Support Of Legislation, Urges Action To Ensure Financial Services Industry Continues To Deliver Upon G20 Goals

MondoVisione

ASIC Moves To Recover Costs Of Its Investigations

MondoVisione

ASIC will now use its power to recover expenses and costs of its investigations.

UK’s FCA Find Firms Still Failing To Fully Manage Benchmark Risks

MondoVisione

IOSCO Publishes Thematic Review Of Implementation Progress In Regulation Of DMI

MondoVisione

Opening Statement Of CFTC Commissioner Mark Wetjen Before Second Meeting Of The CFTC’s Energy & Environmental Markets Advisory Committee

MondoVisione

Opening Statement Of CFTC Commissioner Sharon Y. Bowen Before The Same meeting…

MondoVisione

Testimony Of ISDA CEO Scott O’Malia Before US House Of Representatives Committee On Agriculture

MondoVisione

 

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