June 06 2016

elb2PLY: A funny thing happened at the weekend. It seemed there was one extra paper amidst my student presentations to mark for the “entrepreneurships & startups course” I teach at Nicolaus Copernicus University. Having given this paper the appropriate mark, I realised somebody had left last week’s DB1 – LSE “Merger of Equal Desperation deck in the wrong pile!. Anyway, I have saved my assessment of “How DB1:LSE Assess Their Own Deal” in Premium for your edification. It’s a must read and at $300 for Premium for a year, compares well for insight on just this paper alone with the over 300 million Euros DB1:LSE are spending on advisors…

It’s approaching last call for next week’s FESE Convention – Malta, 15/16th June, where I am chairing a terrific panel on the EU funding outlook. Also, ICDA have their upcoming CyberRisk conference in London, July 20th: Secure a place at GBP 295 with the Exchange Invest code YOUNG295.

Today, after the usual vacuous fluff about the merger of equal desperation, an interesting point to ponder is the Asian race to list bonds. Another interesting opportunity amongst many in the parish…

It’s the anniversary of D Day today, raise a toast to the heroes whose incredible bravery delivering heavily armoured towels on the beaches of Normandy early this morning in 1944 helped end the Second World War.

Today’s theoretical point to ponder: Are exchanges better run by spineless careerists or capricious carpetbaggers?

Public Markets

Austrian Finance Minister: Plans For European FTT May Be Cancelled

Automated Trader

Austria’s finance minister Hans Joerg Schelling has said that an FTT may not be implemented at all, and negotiations cancelled, if the rump of 10 countries cannot come to a common agreement.

PLY: The rump of anti-free market and / or bankrupt EU client states now numbers just 10 from 28 – a veritably stubborn reactionary tail seeking to wag the ailing dog. Austria, Belgium, France, Germany, Greece, Italy, Portugal, Slovakia and Spain are still in the discussions with Slovenia having wavered over recent drafts. The danger zone is imminent as Slovakia have the H2 2016 rotating Presidency while next year sees contras in ‘power,’ beginning with 2 of the most free trading nations in Europe (no that is not an oxymoron) Malta and then the UK. Having missed multiple self-imposed deadlines, the worry is that until this idiocy is dead with a stake through its heart, the EU’s prevailing anti-free market corporate socialist blob will stubbornly seek to propagate this moronic tax on economic liberty.

QV Premium: EU FTT Brief Part 2.


London Is Crucial To The LSE-DB1 Merger

William Turvill – CITY A.M.

LSE and DB1 are walking a tightrope.

PLY: A pertinent headline accompanied by vapid, emotive, rhetoric. The absolute lack of management engagement beyond breathless fluff are ultra tedious and it’s a pity more journalists don’t have the temerity to stand up to such empty rhetoric. DB1:LSE managers would be better served with an empty page than reporting such tosh. Perhaps Mr Tessler sent his butler out for this interview, certainly I would expect a seasoned executive to do a lot better in selling the deal. Very disappointing given he has been charged with running EUREX.

See also Today’s Premium special: “How DB1:LSE Assess Their Own Deal.

LSE Pays A High Price To Retain Its City Cachet (subscription)

Harry Wilson – The Times

LSE is to pay nearly €50 million more in fees to cover the cost of its merger with DB1 as investors are forced to bear the cost of the complicated legal work required to ensure that the stock market operator remains a British company.

PLY: Cynics could say LSE is paying a premium to get the OTC Derivnet banks to roll over and support the Merger of Equal Desperation. Overall this remains a gold standard deal for business schools in how not to do a deal. The standard bearers of markets have fallen foul of their takeover rules, have done tawdry street sweeps of advisors and are busily discrediting any vestige of trust in their SRO status thanks to deal desperation as opposed to managing their businesses.

As Aim Comes Of Age It Must Edge Out Delinquents To Improve Image (subscription)

Kate Burgess – Financial Times

The Alternative Investment Market is 21 this month. What better time for its parent, the LSE, which is finalising its union with DB1, to talk about preparations for Aim’s future?

PLY: Typical corporate socialism from the FT which remains the voice of the blob and an impediment to entrepreneurship and economic growth. The tricky bit is that as LSE has grown, so its ‘placemen’ managers of AIM have lost sight of the, er, aim, of AIM. Quite contrary to the FT angle, it is the swaddling of endless extra regulations which threaten the market, as is the inability of LSE to focus on the micro when they are determined to be a megacorp. Besides we still haven’t forgotten that bizarre XavRol remark from over the tea trolley that AIM doesn’t make money from LSE. That really diluted any claim to suggest LSE senior management know what they are doing managing their existing assets. At least this article notes the corporate spinelessness of DB1 which was Neuer Markt – qv the hogwash recent claims of Damascene conversion by DB1 to small cap development in order to enable their CCP and data monopoly bulk up “merger of equal desperation.”

QV Today’s Premium special: “How DB1:LSE Assess Their Own Deal” & the catch-all review: DB1-LSE Merger Brief.


HKEX: Guidance Letter On IPO Vetting & Suitability For Listing


HKEX To Tighten IPO Reviews To Stamp Out ‘Speculative’ Listings (subscription)

Xie Yu – SCMP

HK SFC is to step up quality control of listed companies to avoid “speculative” IPOs, with the release Friday of a guidance letter on IPO vetting and suitability for listing.


SEC Filing Relating To Nasdaq Senior Notes Offering


On June 3, 2016, Nasdaq filed a final prospectus supplement with the SEC relating to a public offering of $500 million aggregate principal amount of 3.850% senior notes due 2026 pursuant to an effective shelf registration statement.


CFTC Financial Data For FCMs Update


Private Markets

Bangladesh Stock Exchanges Want Full Tax Exemption To Continue In 2016-17


Dhaka SE (DSE) Chairman Siddiqur Rahman Miah made the demands at a media conference on Sunday. The Chittagong SE (CSE), at a separate media call, demanded similar help from the government to restore investors’ confidence in the market.

PLY: Removal of regressive FTT a key demand to allow a free market which does not double tax investors.


EPEX SPOT: Day-Ahead & Intraday Trading Systems To Be Harmonised Across Central Western Europe


Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX up 1%, FTIL down 4% after some recent leaps in price.


Hackers Attack LSE: Cyber Criminals Take Down Website For More Than Two Hours

Daily Mail

Cyber criminals are believed to have taken down LSE website for more than two hours as part of a campaign against the world’s banks and financial institutions, carried out by a group based in the Philippines, part of the ‘hacktivist’ network Anonymous.

PLY: BIST and NYSE also attacked. The anger of anonymous is palpable but their demands somewhat conflicting.


Korea To Support Venture Capital For Fintech Start-Ups

Korea Herald

The government will fully support venture capital to finance start-ups in financial technology business.

PLY: Good.


Monetary Authority Of Singapore Proposes A “Regulatory Sandbox” For FinTech Experiments


The Monetary Authority of Singapore (MAS) released a consultation paper on proposed guidelines for a “regulatory sandbox” that will enable financial institutions (FIs) as well as non-financial players to experiment with financial technology solutions.

PLY: Good.


Nairobi SE To Raise Capital To Enable Start Of Derivatives Market

Martin Mwita – The Star

The planned trade in financial derivatives on Nairobi Securities Exchange got a major boost after the self-listing firm’s shareholders voted to raise capital to Sh1.5 billion (USD 14.8m). NSE will therefore increase its authorised capital from Sh850m (USD 8.4m) to meet the regulatory requirement of above Sh1 billion (USD 9.9m), needed to enable trade on derivatives.


Asian Exchanges Target Bigger Share Of Bond Trading

Daniel Stanton – Reuters

Bourses from India to New Zealand are rolling out initiatives, ranging from online bookbuilding to retail trading, to fill the gap left by the exit of traditional market makers.


China’s Opening Bond Market a Threat to Hong Kong Connect Plans

Eduard Gismatullin & Justina Lee – Bloomberg

HKEX is facing a challenge to its plans (reported last month) to allow customers to trade in the Chinese bond market as the country’s central bank offers access to international investors.

QV Premium: HKEx – SSE – Stock Connect Brief Part 4.


SGX Sets Its Sights On First ETF For Singapore Reits

Renald Yeo – Business Times

Career Paths

Bloomberg reports that IEX Group has hired a chief strategy officer from KCG Holdings, Eric Stockland. Most recently Stockland advised investors on how to carry out trades electronically.

In his new role at IEX, Stockland will be “responsible for representing IEX in industry and regulatory policy discussions, guiding product strategy, and serving on several internal management committees”. He will report to Ronan Ryan, the previous chief strategy officer who’s becoming President of the company.

PLY: Delighted to see Ronan Ryan being elevated at IEX and a warm welcome to Eric Stockland.

Eric Zhang, former Global Partner & MD of The Carlyle Group, has joined General Atlantic as MD & Head of China.

AAM reports that Mirae Asset Global Investments (HK) has appointed David Quah, former VP of product development & marketing, cash trading & global markets division at HKEX, as its ETF team product specialist.

SEC announced that Stephen L. Cohen, Associate Director of the SEC’s Enforcement Division, is planning to leave the agency later this month.

Financial Calendar

07-08.06 – FIA IDX

10.06 – CFTC Division of Market Oversight – public roundtable meeting, to discuss certain elements of the Commission’s notice of proposed rulemaking (NPRM) regarding Regulation Automated Trading

10.06 – Record date CME $0.60 Q2 2016 dividend  

10.06 – Record date Nasdaq $0.32 quarterly dividend

10.06 – TMX $0.40 dividend payment

22.06 – WSE AGM – amended agenda

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

Analyst Notes

ASX’s Blockchain Game Plan Could Lift Stock 44%

Isabella Zhong – Barron’s

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

PLY: Pigs might also fly. One interesting thing is how dear old Peter Hiom who seemed to be reluctant about Blockchain as soon as Elmer disappeared to spend more time with his lawyers, was in full on DL cheerleader mode at last week’s Australian stock brokers conference.


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