May 12 2016

elb2Some may be disappointed in the parish that Euronext has had a slight volume slump (doesn’t help that the marxists masquerading as a government in Paris apply an FTT of course) but I see a positive light. Leicester City just won the English premiership (that’s in soccer, apparently) at odds of 5000/1. A few years back bookies would have been shunned even when offering such generous odds on a Euronext results announcement which involved earnings improving due to cost control. This demonstrates what happens when any member of the parish has an outbreak of management – good to see.

DB1 had their AGM. Usual million dollar marching band fest I suppose. If only they could have employed Leni Riefenstahl to film them. The effect could have been mesmerising. The quotations to trickle out do nothing to disabuse the pragmatic notion that DB1 management continues to confuse hubris with management – a lexicographical error which, like their misguided bid for LSE seemingly leaves no room for margin offset.

Booking now with PLY speaking: Finance Malta May 25/26, FESE Convention, Malta, 15/16th June. Also on the CMU theme, save the date for September 15th, InterContinental Hotel, Warsaw. First CEE CMU Capital Markets Summit, chaired by me, Patrick L Young, with the 2nd CEE Capital Markets Awards that evening. More details on ICDA CyberRisk to follow tomorrow…

Public Markets

Euronext Q1 2016 Results


vs Q1 2015: total revenue & other income EUR 126.4m (USD 144m), down 2.7%, operating profit EUR 68.7m (USD 78m), down 1%, Profit for the period EUR 48m (USD 55m), flat.

PLY: Slight confusion and a mix up between theory, projections &, well, “projections.” “Ceci n’est pas un forecast” as Rene Magritte might have noted in clarification.

Euronext Free To Pursue M&A After Dutch Capital Pact (subscription)

Anna Irrera – Financial News

Euronext has reached an agreement with Dutch regulators to ease proposed capital requirements, a move the exchange operator said will now make it easier for it to pursue acquisitions.

PLY: Good article by Anna Irrera outlining some dynamics for Euronext at a very exciting time where both strategy and execution will be vital. Also quotes me, and indeed channels some of my insight through the piece.


BVB Q1 2016 Results


vs Q1 2015: operating revenue Lei 6.49m (USD 1.65m), down 11%, profit for the period Lei 0.04m (USD 10k), down 98%.

PLY: Collapse in profits goes hand in hand with the highly volatile nature of the very immature Romanian capital market – BvB is de facto a prisoner of government engagement (or lack thereof) like so many CEE Markets and needs privatisation to recommence…as this story about the flotation of energy firm Hidroelectrica suggests is imminent. Thus disappointing results but hardly shocking. Further sound reasons for BvB to avoid wasting time, money and effort acquiring the SIBEX carcass which adds zero value to Bucharest.


DB1 CEO Touts LSE Merger, Saying ‘Size Is Everything’


CarKen: “In our business, size is everything.”

PLY: Hmmm, so a much bigger more flaccid, even less competent DB1 is a good thing? I would rate that a woof woof – or they could just rebrand as “NYSE Euronext” to emphasise the sheer cluelessness of management and messaging at DB1 as it now appears. Comments could be taken out of context of course (perhaps that too was God’s will) but right now there is a complete vacuum of evidence to suggest CarCrash is up to the job of being more than an alpha male investment banker – we just don’t need self-interested non-detail oriented, inadequately comprehending short-termism in the parish. However CK1 is on the pig’s back at DB1 as the DB1 board is such a slow moving entity it will probably never sack him. So he has pure upside, heads he wins, tails the shareholders lose. Not a binary I happen to favour.

DB1 CEO Sees No Sign Watchdogs To Block LSE Merger


CarCrash: “We are convinced that the merger will gain all necessary regulatory approvals.”


  1. Dreams are free.
  2. Road accidents are bothersome.

UK’s Osborne Not Worried By German Bid For LSE


“Some very large German companies and French companies base their operations in the UK rather than in Frankfurt…. I think the company itself has said that the ‘topco’ would be located in the UK. Britain’s strength has always been as a centre of European as well as global finance.”

PLY: Usual piffle from the vacuous British Finance Minister whose grasp of detail is so dismal he could be in the running to manage some exchanges who shall remain nameless.

LSE Takeover Risks London Losing Its AIM

Anthony Hilton – Evening Standard

According to one of the Rothschild clan, the sole reason for having a financial centre is to move money from where it is to where it is needed. That is the basic service the finance industry offers; that is how it helps an economy to grow.

PLY: On the cusp of CMU, clearly there is a rich irony in an acquisition of LSE by a DB1 which has proven incapable of dedicating itself to managing an SME market over the economic cycle as the politics of management have left nobody willing to champion such a venture at the risk of their career (draw your own conclusions on management backbone). Then again, is AIM the future of SME funding? I rather fear it is, after years of broadly pointless tinkering by apparatchiks, much more like the past of SME funding than the future anyway. Incidentally, it remains hard to fathom the curious Xavierian assertion a while back that AIM doesn’t make a profit.

How Can DB1 Boss Be Confident LSE ‘Merger Of Equals’ Will Be Approved Unless There Has Been A Political Stitch-Up?

Alex Brummer – Daily Mail

The confidence of DB1 CEO Carsten Kengeter that the proposed £21billion ‘merger of equals’ with the LSE will gain all the necessary regulatory approvals is breath-taking.

How could Kengeter be confident that regulators and shareholders will approve the DB1-LSE deal at the company’s AGM, unless there has been a political stitch-up?

QV Premium: DB1-LSE Merger Brief.

PLY: An interesting angle from Alex Brummer although I would somewhat discount the stitch up angle (the Mail arguably prefers conspiracy as a rule of editorial thumb). Rather I would suggest it may be a “deja vu one more time” outbreak of hubris where remote, ill-informed and impetuous CEOs with ego and self-interest aforethought were unable to really comprehend the feedback to their deal (or just ignored it).


LCH Spider To Breathe New Life Into NLX

Joe Parsons – The Trade

Nasdaq NLX hopes activity will increase to the exchange following the launch of a new portfolio margining service from LCH.

In anticipation of the service, called LCH Spider, NLX will renew a market making scheme for its interest rate futures market, providing banks acting as a direct market maker a full rebate on their execution fees.  

BoE To Permit LCH Spider (subscription)


PLY: Will Spider see an offset “in” the market via NLX…an interesting question perhaps to come up during June. I’m in the cynical camp for all manner of reasons – with legs in or out and shaken all about…


Experts Agree ‘Perfect’ Reporting Under MiFID II Very Unlikely By 2018

Hayley McDowell – The Trade

Industry experts agreed the reporting requirements under MiFID II have brought about ‘unintended consequences’, and firms will not perfect reporting by the 2018 deadline.


BoE Wants Global Stress-Testing Of Derivatives Clearers

Huw Jones – Reuters
David Bailey, director of financial market infrastructure at the Bank of England, said the proportion of derivatives being centrally cleared will increase significantly in June when mandatory clearing begins for some interest rate swaps in the EU.

Bailey: “We need to plan for the extreme or even the implausible event. Simply put, we need to ensure that CCPs are not ‘too big to fail’.”

PLY: Of course nebulously hypothecating an offset fiction riddled with cross border legal issues, notwithstanding a fundamental inability to contain the risk isn’t a too big to fail problem at the GCM level but I suspect it may be somewhere on David Bailey’s agenda.


ASX To Restrict Small Start-Ups From Listing Too Early

Yolanda Redrup – AFR

Early stage companies with a market value of under $20 million and less than $5 million in net tangible assets will be restricted from listing on the ASX if proposed changes to listing rules are implemented.

PLY: A rather restrictive approach from the entrenched monopolist which like, say, the government of Venezuela, struggles to deliver at all levels a coherent service thanks to the inherent inefficiency of monopolists. Bad idea, wrong-headed regressive thinking, demonstrating an organisation unable to assess its proper purpose (lucky they don’t have Tony Hilton writing for the Sydney Evening Standard as it were…).


ESMA Sees Continued High Level Of Market Risks In Q1


PLY: Yip.


IOSCO Continues To Address Global Challenges To Securities Markets Regulation


Private Markets

Baltic Exchange: Talks Still Ongoing With Potential Buyers


Talks between the Baltic Exchange and a number of suitors are continuing, but any potential buyer of the business will have to provide assurances that its central role in shipping will not be “undermined”.

On Feb. 26 the privately held Baltic Exchange confirmed it had received a number of  “exploratory approaches” after the Singapore Exchange Ltd (SGX) said it was seeking to buy the business.

PLY: I had been wondering about this the other day…at this rate Jeremy Penn will have stepped down without selling the business (not it has to be said that either has any form of explicit contingency).


Croatia/Slovenia Market Coupling Not Expected Until Q4 2017


The Croatia day-ahead market coupling project with Slovenia is not likely to happen until Q4 2017. The linking of the Croatian power exchange CROPEX with the Slovenian exchange Southpool was expected to happen in H2 of this year, even though there was never a set go-live date.

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX off 1%, MCX drifting but not quite so much.


Nasdaq Commodities To Launch New European Power & Gas Markets


Nasdaq Commodities announces the establishment of 14 new energy markets in Europe on its exchange, thanks to collaboration with Mercuria Energy Trading. While the new markets and instruments will be available to Nasdaq Commodities clients generally, they have been designed to work with Mercuria’s sponsored access business1 for OTC European Energy markets.

PLY: Interesting move all round.


Kraken Adds Ether Dark Pool Trading


Kraken has announced that it became the first and only exchange to offer clients Ether (ETH) Dark Pool trading.

Career Paths

Axioma named former Euronext CFO, Amaury Dauge, as CFO.

PLY: So that “New York FinTech” move was very specific indeed to the web2.0 provider of risk tools et al, Axioma.

FOW reports that Muammer Cakir, former Borsa Istanbul’s Head of Derivatives Market – VIOP (left in March), joined LSE as Derivatives Markets advisor.

PLY: Interesting but suits Muammer’s lifestyle as he was really based in London anyway.

TMX announced that the nominees listed in the management proxy circular for the 2016 Annual & Special Meeting of Shareholders were elected as directors of TMX. List here.

PLY: The good news is that Canada’s original exchange visionary topped the poll. It’s only a pity that Luc Bertrand isn’t running the show, as that would make an interesting challenge between Jos Schmitt, Canada’s other exchange visionary and his Aequitas as well as NASDAQ’s slate with various former Toronto exchange managers and of course the brooding presence out west of the ICE.

The BoD of HKEX approved appointments to the Cash Market Consultative Panel, Clearing Consultative Panel and Derivatives Market Consultative Panel. The member lists effective 1 June 2016 – here.

IPC Systems appointed Tony Carriero as Chief Information Security Officer (CISO).

Speakerbus announced that Dimuth Jayasinghe has joined the company in an account management & business development capacity.

The Autorité des Marchés Financiers is seeking candidates to be part of two advisory committees: the Derivatives Advisory Committee (DAC) and the Mining Advisory Committee (MAC). Persons interested in joining either committee may consult the call for candidates. The deadline for applications is June 10, 2016.

Financial Calendar

12.05 – Oslo Børs VPS Holding ASA AGM

13.05 – ICE AGM  

New! 18.05 – SEC Advisory Committee on Small and Emerging Companies – Agenda

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


Crowdcube Puts IPO Market Plans On Hold

Samantha Hurst – Crowdfund Insider

On Wednesday Crowdcube announced that it has decided to put its IPO market plans on hold for now.

Following a £6 million funding round, led by Numis, last year, Crowdcube revealed that it was planning to leverage over 200,000 registered users and introduce them to IPOs of large, growing companies.


New Ways For The Financing Of SMEs & The Challenges Of Crowdfunding, SEC Chairman Mary Jo White, Opening Remarks For IOSCO Panel 1, Lima, Peru, May 11, 2016



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