June 28 2013

elb2 Greetings from Berlin where the FESE Convention yesterday was simply the best I can recall in more than a decade of attendance. Congratulations to Chairman Hans-Ole Jochumsen and Judith Hardt and her brilliant team in the FESE Secretariat. It was a magnificent venue in Berlin and the input of Andreas Preuss and Deutsche Borse was much appreciated in helping to bring a real “A” list of names to the convention.

For those delegates pondering the answer by Messrs Preuss and Christian Katz to my question yesterday to the CEO panel, incidentally, I believe both responses were highly pertinent. I will endeavour to write more when I have time.

Meanwhile today, Jon Corzine apparently wasn’t given a chance to settle but has simply been charged…

Public Markets

Corzine, O’Brien Charged In MF Global Collapse (subscription)

The Wall Street Journal

Federal regulators on Thursday filed civil charges against former MF Global Holdings Ltd. CEO Jon S. Corzine and a top lieutenant for overseeing the misuse of almost $1 billion in customer funds

PLY: Governor Corzine had an illustrious career which was damaged in several ways by a safety-belt free car crash and ultimately seems to have suffered major damage over MF Global. It will be interesting to see how the case evolves, as it has always been tricky to follow how the CEO would not know about significant financial issues within the company…I shall say no more and await the trial.

CME Finalising Plans For Swaptions Clearing (subscription)

Risk.net

CME is close to finalising its launch plans for swaptions clearing, with the service set to be
launched at the firm’s US and European clearing houses within a matter of months.

PLY: A sound product, it will be interesting to see how many banks bite…

Swiss Exchange Operator To Run Nation’s Repo Market

Bloomberg

SIX Group, operator of the Swiss stock exchange, will run the nation’s market for repurchase agreements, or repos, from May 2014 instead Eurex.

PLY: An interesting move, good for SIX and sensible for Switzerland to have control of such a vital banking facility within its own borders for the CHF.

HKEx,LME,CBMX Accord (subscription)

Wall Street Journal

HKEx, LME and the China Beijing International Mining Exchange, or CBMX, Thursday signed an MOU to cooperate and exchange information, marking an expansion of the LME’s business in Asia and planned development of new products and services in mainland China, Hong Kong and internationally, including in the iron ore business.

Henry Bath Asks LME To Delist 21 Warehouses Worldwide

Reuters

Henry Bath has asked the London Metal Exchange (LME) to delist about of fifth of its warehouses worldwide as it slims down its network, according to sources in the sector.

Henry Bath, owned by U.S. bank JP Morgan and headquartered in the UK port city of Liverpool, declined to comment.

Private Markets

Betfair Nets €453m Despite Loss

Irish Independent

Betfair, the UK gambling firm headed by former Paddy Power executive Breon Corcoran, said its revenue for the year to the end April was flat at £387m (€453m), but recorded a £49.4m (€57.9m) loss as it continues the restructuring of the business.

Earnings before interest, tax, depreciation and amortisation (EBITDA) at the group declined 39pc to £51.2m (€60m) and on an underlying basis was 15pc lower at £73.3m (€85.9m).

Final dividend of 9.0 pence proposed; full year dividend up 27% to 13.0 pence.
Press Release here

Betfair Attracts More Gamblers With Simpler Product

Reuters

Betfair (BETF.L) is attracting more gamblers to its website with simpler products, the online betting company said on Thursday, defending its strategy after rejection of a 1 billion pound ($1.5 billion) takeover bid.

PLY: Essentially only a niche of people like selling premium but this remains a magnificent feature of the core Betfair product.

Integrated Swiss Intraday Market Successfully Launched

The Swiss Intraday power market was successfully launched on 26 June 2013. It joins France, Germany and Austria as the fourth national market to be integrated using ComXerv, the commodity trading system provided by Deutsche Börse AG. ComXerv allows implicit cross-border transactions which lead to an efficient use of capacity on interconnectors.

‘Non-Toxic’ Aequitas Exchange’s Secret Data Offering Awaits Patent (subscription)

www.waterstechnology.com

Aequitas Innovations, a new proposed Canadian exchange set up by six major Canadian dealers and investment firms with former executives of the Alpha ATS-turned-exchange that was acquired by TMX Group almost a year ago, has filed for a patent.

Tanzania: Commodity Exchange Market On the Offing

AllAfrica.com

THE government has reached an advanced stage towards the establishment of the commodity exchange market, which is scheduled to take off soon, hopefully in the next year.

MSE To Migrate To Target 2 by Mid-2015 (subscription)

Times of Malta

The Malta SE central securities depositories will be migrating to Target 2 Securities, with the first of the four planned waves, scheduled for June 22, 2015.

Sri Lanka Stock Market Opening Delayed Over IT Issue

Lanka Business Online

Sri Lanka’s stock market trading is halted until a problem with client accounts in its automated trading system is resolved, the Colombo Stock Exchange said Friday.

Products

Precious Metals Exchange To Open In Moscow

MINING.com

Russia will soon begin trading precious metals on its Moscow stock exchange with metals will be priced in rubles and will be stored and delivered by the exchange.

Gold in Russia has only been selling over-the-counter and prices were based on quotes from the Central Bank.

PEGAS: Successful Migration Of EEX NCG Futures

Trading in natural gas futures for the market area NetConnect Germany (NCG) listed at the European Energy Exchange (EEX) is activated on PEGAS, the joint platform of EEX and Powernext.

Indexes

CBOE Expands Its Global Volatility Franchise

Daily Markets

CBOE will begin disseminating values for a new volatility index benchmark – the CBOE EFA ETF Volatility Index (VXEFA) – on Monday, July 1. The VXEFA Index, expands investors’ ability to track market volatility of major geographic regions outside of the United States, measuring the volatility of the iShares MSCI EAFE Index Fund (EFA), an exchange traded product (ETP) that offers exposure to developed-market stocks in Europe, Australia, Asia and the Far East. Most recently, EFA options were the tenth-most-active ETP options class in 2013, averaging 82,000 contracts traded per day industry-wide.

NYSE Euronext And Vigeo Expand Range Of ESG Indexes

NYX and Vigeo, the leading European expert in responsible performance, are expanding their range of ESG indices with the launch of the Euronext Vigeo Benelux 20, the Euronext Vigeo Eurozone 120 and the Euronext Vigeo US 50.

ISE ETF Ventures Partners With BlueStar Indexes

ETF Daily News

ISE announced today the launch of their partnership with BlueStar Indexes to develop a family of indexes and use them as the basis for exchange traded products (ETPs) and other index-linked vehicles. The BlueStar Israel Global Index (ticker: BLS), the first index developed through the partnership, provides a comprehensive benchmark for investors to track Israeli and Israeli-linked public companies and serves as the basis for the Market Vectors® Israel ETF (NYSEArca: ISRA®).

A Gauge of Investor Fear In India Goes Largely Unnoticed (subscription)

Wall Street Journal (blog)

India’s VIX, modeled after CBOE’s Volatility Index, recently hit its highest level in nearly a year, but hardly anyone noticed. That may change if the National Stock Exchange of India receives approval to launch trading products linked to the index.

Financial Calendar

NZX First Half 2013 Financial Results To Be Published August 19th 2013.

Analyst Notes

IntercontinentalExchange “Buy” rating reaffirmed by stock analysts at TheStreet
CME Group Upgraded to “Market Perform” by JP Morgan Cazenove
Charles Schwab Corp. Given “Buy” Rating at TheStreet

Career Paths

Warsaw Stock Exchange Strengthens London Presence

As of June 2013, the Warsaw Stock Exchange has hired Mr Peter Niklewicz, former Director of Equities at Citigroup and experienced capital markets advisor, as Senior Advisor to the Management Board of the Warsaw Stock Exchange based primarily in London.

PLY: A good move by Warsaw.

Nepal SE Gets New GM

Himalayan Times

Sitaram Thapaliya was appointed as the new general manager of Nepal Stock Exchange (Nepse) by the Cabinet meeting held today.

Crowdfunding

Crowdfunding Site Kickstarter To Allow Canadian Projects

CBC.ca

The popular NYC based crowdfunding site Kickstarter will open up to Canadian projects starting this summer.

Other stories

Senators Warn Of Swap Rules’ Cross-Border Impact

Reuters

A group of Senate Democrats on Wednesday expressed concern to Treasury Secretary Jack Lew about a lack of coordination on new derivatives rules by two key regulatory agencies and urged more cooperation with their foreign counterparts.

PLY: Sensible insights from this group, extra-territorial ambitions sit uneasily with free market politicians.

IDBs Diversify And Adapt To The Changing Market

FOW magazine

PLY: The great IDB diversification is well under way and I expect it be a fascinating journey with at least one to soon be under exchange ownership. Watch this space, investors.

New Stock Exchanges Could Boost EM

emergingmarkets.org

The issue of offering small companies in emerging markets access to finance is a thorny one. But well-executed SME exchanges could be the answer

Small and medium size enterprises (SMEs) are a major driver of economic activity, in developed and emerging markets alike.

PLY: A significant chunk of the FESE Convention was devoted to SME markets and for those of you interested in watching a rising political star, Belgian MEP Philippe de Backer is simply electrifying on the topic. SME markets are fascinating whether as bourses or crowdfunding platforms – both need investment, we are seeing some very good models seeking investment currently. Usually small amounts but with remarkable opportunity…

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