May 14 2013

elb2In today’s news the pot has clearly been stirred up by Peter Randall becoming the first to break cover with a possible Euronext bid while it is good to see some unofficial internal confirmation of what we have always suggested: namely ICE will seek a twin track approach of IPO or trade sale. Actually if the money is right, I believe ICE would sell Euronext at a car boot sale.

Elsewhere the Supreme Court seems to have finally killed the index debate so CBOE and other primary listing venues of index futures & options look to be pretty much home and dry from competition – that might help eke out a little boost to market cap in due course…

DTCC and EuroClear are not places we can invest currently but their MOU is a good one helping progress trans-Atlantic clearing and settlement in various cash products. This is to be welcomed and can only markets more seamless for everybody.

That Betfair and CVC have curtailed talks is perhaps one of the least surprising news stories in months given the clear depths of division between them.

ICAP numbers were never expected to be wildly exciting at this point in the tightrope walk between pure OTC and Dodd-EMIR-Frank and well, they weren’t but slightly better than guided at least…

Today’s intriguing stories across continents and asset classes are below, happy reading:

Public Markets

NYSE Keeps Options Open to Exit Euronext

Fox Business

NYSE Euronext (NYX) is considering a dual-track process to either sell or spin off a European stock trading business that’s attracting interest from potential private equity suitors, according to people familiar with the situation.
The Euronext arm is due to be separated after the Big Board operator’s planned $10 billion acquisition by IntercontinentalExchange Inc. (ICE).
Peter Randall, the former head of pioneering trading platform Chi-X Europe Ltd., is in the early stages of forming a buyout consortium to consider a bid for Euronext, according to people familiar with his plans.

CBOE keeps index franchise as justices stay out of dispute

Reuters

CBOE Holdings Inc (CBOE.O) won a long-running legal battle to prevent rival International Securities Exchange from listing options on two key U.S. stock-market indexes, after the U.S. Supreme Court on Monday declined to consider their dispute.
The court’s refusal to intervene leaves intact a lower court ruling that allows CBOE, the operator of the oldest and biggest U.S. stock market, to remain the sole market for options on the Standard & Poor’s 500 Index and the Dow Jones Industrial Average.

DTCC and Euroclear to Launch Joint Collateral Service

Yahoo Finance

Euroclear and The Depository Trust & Clearing Corporation (DTCC) have signed a Memorandum of Understanding to create a joint collateral processing service which will significantly increase efficiency, reduce risk and support the growing collateral needs of industry participants.

PSE’s Q1 net profit up 27.8%

Inquirer.net

The Philippine Stock Exchange’s first quarter net profit rose by 27.8 percent year-on-year to P184.81 million as the robust stock market boosted its trading, listing and other fee-based earnings.
Operating revenues went up by 18.14 percent to P263.41 million from a year ago.
Trading-related income, inclusive of the amount ceded to Capital Market Integrity Corp. as regulatory fees, increased by 17.17 percent as average daily turnover value jumped to P10.22 billion from P7.84 billion a year ago.

Private Markets

Betfair and CVC terminate takeover discussions

Reuters

Betfair (BETF.L) and CVC Capital Partners have ended takeover discussions after the private equity firm said it would not make a third revised offer for the online gambling company.
CVC and its consortium partners Richard Koch and Antony Ball had raised their offer twice from the 880 pence per share it proposed on April 22.
Betfair said it received a revised offer of 920 pence on May 10 which it rejected. Then on May 12, CVC again increased its offer to 950 pence per share, valuing the company at 988 million pounds ($1.52 billion).
Betfair’s board rejected the revised proposal that evening, but indicated it would consider an improved proposal.

ICAP Full-Year Results For The Year Ended 31 March 2013

ICAP plc (IAP.L), ICAP the world’s leading interdealer broker and provider of post trade risk and information services, today announced its audited results for the year ended 31 March 2013.

Highlights for the year:

•Group revenue decreased by 12% to £1,472m with profit before tax1 decreasing by 20% to £284mmarginally ahead of previous guidance

•Electronic Markets and Post Trade Risk and Information contributed 66% of operating profit

•Key developments include the creation of the Global Broking division, the strengthening of EBS and thelaunch of i-Swap in US dollars

•£60m cost savings delivered this year, £10m more than previously announced. Equates to £80mannualised, £20m higher than previously announced

•Group operating profit1 margin 21% (2011/12 – 22%)

•EPS (adjusted basic)3 down 18% to 33.0p; Statutory EPS (basic) down 68% to 6.7p

•Ongoing free cash flow4 of £274m (2011/12 – £268m), representing a profit5 conversion of 130% resultingin net cash of £25m (2011/12 – net debt £82m)

•Proposed final dividend of 15.4p per share. The full-year dividend of 22.0p per share (2011/12 – 22.0p),reflects the continuing strong cash generation and confidence in ICAP’s medium-term prospects

Alternative stock market for small business takes off

Myjoyonline.com

Small businesses in the country can take advantage of the Ghana Alternative Market when they turn to the Ghana Stock Exchange to raise capital to expand their operations.

The Ghana Alternative Market which is dedicated to small firms and start-ups with flexible listing requirements has finally taken off after several postponements.

Firms that want to list on the market must have a stated capital of 250 thousand Ghana cedis after listing and just 20 shareholders.

US Regulators Take Aim at Bitcoins: Are Bitcoins the new Virtual Currency?

Inside Futures

Last week the very first government regulator jumped into the mix. Not surprisingly, it was out of the US which has some of the tightest commodities, Forex and binary options regulations on the earth. The Commodities Futures Exchange (CFTC) is considering into whether or not Bitcoin falls under its regulatory scope. The CFTC Commissioner Mr. Bart Chilton has been quoted as “Bitcoin “is for sure something we need to explore. It’s not monopoly money we’re talking about here — real people can have real risk in these instruments, and we need to ensure that we protect markets and consumers, even in what at first blush appear to be ‘out there’ transactions.”

Appointments

TMX Group Announces Election of Directors

Sacramento Bee

MX Group today announced that the nominees listed in the management proxy circular for the 2013 Annual and Special Meeting of Shareholders were elected as directors of TMX Group Limited.

The list of elected directors:

Luc Bertrand
Denyse Chicoyne
Marie Giguère
George Gosbee
William Hatanaka
Jeffrey Heath
Harry Jaako
Thomas Kloet
William Linton
Jean Martel
William Royan
Gerri Sinclair
Kevin Sullivan
Anthony Walsh
Eric Wetlaufer
Charles Winograd
Tom Woods

Technology

PUMA Trading System: BM&FBOVESPA celebrates a month of BOVESPA segment transactions at the new platform

Sacramento Bee

BM&FBOVESPA has now completed a month since the migration of its equities market to the PUMA Trading System, which is the Exchange’s new and single multi-asset class system. The new platform was created and developed with CME Group as part of a strategic agreement between the two exchanges, which now gives them the capability to deploy the system with other strategic partners globally. The BM&FBOVESPA PUMA Trading System was brought about to transform several trading platforms into a single one, maintaining advanced technology, reducing latency significantly and increasing order processing time as much as thirtyfold. In August 2011, BM&FBOVESPA and CME Group completed the first phase of PUMA by launching the derivatives portion of the platform.

NZX Expands Global Reach Through BT Radianz Services

BT and NZX today announced that the New Zealand market operator’s trading and market data services will now be accessible to members of the BT Radianz Cloud community. Responding to increased demand from domestic and international markets, this move will make it easier and faster for global investors to access NZX services.

Indexes

Austrian bourse launches new “Global Players” index

Reuters

A new Austrian share index made its debut on Monday, focusing on the country’s export-oriented companies to the exclusion of the central and eastern European banking groups that dominate the Vienna bourse.
The ATX Global Players index, with a market capitalisation of 7.5 billion euros ($9.7 billion), comprises all the stocks listed in the Vienna Stock Exchange’s main market segment that make at least 20 percent of their sales outside Europe.

Changes in investors/shareholders

Charles Schwab Founder’s $25.4 Million Sale (subscription required)

Barron’s

Charles Schwab continues to rally near a recent multiyear high and the company’s founder and namesake took the opportunity to cash in a few of his chips. Over May 2 and 3, Chairman Charles Schwab sold 1,500,000 shares of Schwab

Crowdfunding

Crowdcube Limited raises £1.5 million investment

Crowdcube

Crowdcube has used its own platform to raise £1.5 million in just three days from 259 investors. Existing investors met the initial funding target of £250,000 within the first five hours of the pitch going live, making it the fastest equity funding on a crowdfunding website anywhere in the world. The pitch was then opened up for others to invest with one million pounds being invested in the last 24 hours. The investment, which sets a new world record for funds raised via an equity crowdfunding platform, will be used to fuel Crowdcube’s next phase of growth.

The false promise of crowdfunding – USA Today

USA TODAY

Last week, Donald Trump announced – with characteristic flair – his involvement with a crowdfunding startup named FundAnything. The Donald’s presence would be something of an embarrassment for many companies, but then the tech sector has never been above a little shameless self-promotion. In fact, it’s become something of a virtue in this age of “likes” and “thumbs-ups.”

Is crowdfunding to be crowdless?

The Hill (blog)

The JOBS Act has the potential to help entrepreneurs finance their small and emerging growth businesses through “crowdfunding,” but only if we get the costs right. In the year since the measure was signed into law, online technology platforms have continued to successfully disrupt the costs of fundraising, necessitating a reevaluation by the Securities and Exchange Commission of some components of the law before completing the regulations.

Other stories

HFT helps stabilise the market during shocks – Eurex

The Trade News

High-frequency trading (HFT) provides stability to the market during crashes, according to Eurex data aimed at disproving buy-side “misconceptions”.
Randolf Roth, head of market structure for Eurex, the derivatives exchange owned by Germany’s Deutsche Börse, said the main HFT misconception was that firms only operated “in good weather”.
“HFT firms contribute not only to liquidity but also help in severe situations to stabilise the market by continuing to run their algorithms the way they did before,” he said. “That implies that they continue to provide liquidity on both sides.”

India – Insurers, pension funds need changes before debt segment debut

Business Standard

Insurance companies and pension funds may not immediately be able to participate as trading members on the debt segment of exchanges. Their participation is likely to need a change in regulation, according to a senior official from the Securities and Exchange Board of India (Sebi).

The National Stock Exchange on Monday launched its debt segment. The other two stock exchanges, BSE and MCX Stock Exchange, are also said to be preparing for such a launch. NSE has been in talks with insurance players to participate in the debt segment. It had held discussions with LIC, HDFC Life and Future Generali, according to a source.

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