May 16 2016

elb2We’re celebrating across the Exchange Invest offices today. Not just Issue 750 but actually yesterday marked the 3rd anniversary of Exchange Invest heading ‘into the wild’ so to speak. I’ll be musing more as the week goes on. Tomorrow I’ll be discussing the winners and losers in the parish during the last year.

However, it does raise a serious question – it’s seriously (beyond) time when some in the parish coughed up some more cash. I know, I know, there are some congenitally miserable organisations out there but a lot of good folks support this publication – even when it doesn’t always agree with their positions.

So, thank you to our Premium Corporate Subscribers, and thank you to all our sponsors, led by Cinnober who support this endeavour.

To those who don’t contribute, are you seriously unable to afford $300? That’s the starting point for an individual subscription to our Premium service…and we give good rates for corporate discounts. Besides, believe me, as we can see from some of the faux pas in this industry, ignorance is expensive…

Today in Premium, new posts include analysis of that new corporate plan from Friday: Euronext Agility For Growth as well as examining the weird oversight that has left two merger protagonists exposed to what I headline DB1-LSE: The Big Lie while if you don’t know what they are, you need to consider DMOUs.

Email for corporate bulk discounts & packages or just to seek an invoice, or if you want to reach the parish decisionmakers, consider some sponsorship…

Public Markets

ICAP Results For The Year Ended 31 March 2016

ICAP

vs 2015: revenue GBP 1.2b (USD 1.73b), down 5.9%, profit before tax GBP 89m (USD 128m), down 6.3%.

PLY: Soon the company will go ‘ex-Lag’ and we have a whole new valuation metric coming. If only DB1 and LSE weren’t locked into their oblivious merger of equal desperation, they could be amongst the many who will be bidding soon enough and underpinning the share price of what is to be called (drumroll):

ICAP Newco plc Announces New Company Name: NEX Group plc

ICAP

ICAP To Become NEX Group To Begin Life After Voice Broking

Will Hadfield – Bloomberg

ICAP Plc said it will be called NEX Group Plc once it completes the sale of its voice-broking business to Tullett Prebon Plc, transforming itself into a specialist in electronic markets and post-trade services.

QV Premium: Exchange Deals Brief.

PLY: Short & punchy – albeit now they are getting rid of all those voice brokers, the prerequisite for monosyllabic branding has decreased as ICAP sits on the verge of its digital hegemony?

A judicious spot of rebranding publicity which can stick, albeit is this “Nex, alphabetically N-E-X or deftly elided as EN-EX” when it comes to received pronunciation? Clarification will be welcome.

IGBB Preliminary Results For The Year Ended 31 March 2016

Tullett Prebon

vs 2015: revenue GBP 741m (USD 1.06b), down 8.3%, trading operating profit GBP 65m (USD 93.6m), down 22.6%.  

PLY: “Bring us new blood & we can chisel out EBITDA wonderment through headcount reduction” as the wizards of Cable House allegedly say ahead of their upcoming merger…

Tullett Prebon Trading Update

Tullett Prebon

Revenue in the four months to April 2016 of £291m (USD 419)  was 2% higher same period last year, and 1% lower at constant exchange rates.

 

Brexit, Headquarters Key In German Regulator Review Of LSE Deal

Angela Cullen – Bloomberg

As exchange regulator, Hesse holds veto powers over deal.

PLY: …and I confidently believe they will use it, even if they don’t have to, because antitrust kills this ticking time bomb of equal desperation first. Hesse State Economy Minister, Tarek al-Wazir, notes “it’s clear that at the end of the day you need ideas about how to stay ahead in the competition.” However is that the same as making a blobby too big to fail lump which cannot achieve clearing coherence? I’m unconvinced.

Germany’s Schaeuble Talks With DB1 CEO ‘Confidential’

Reuters

Talks between German Finance Minister Wolfgang Schaeuble and DB1’s CEO on the LSE merger will be confidential, a Finance Ministry spokesman said on Friday.

PLY: CarCrash goes to Berlin with his suitcase full of dubious assertions, presumably. Then they’ll probably leak some waffle which suggests everything is on course but as it is emanating from DB1 sources…

LSE Ready to Start Service That Eases Banks’ Capital Burden

Will Hadfield – Bloomberg

LSEG is ready to debut its much-heralded service to ease capital requirements on banks, one of the key reasons behind its planned tie-up with DB1. LSE’s LCH division has received regulatory approval (discussed last week) to lower the margin needed to back trades executed on Nasdaq’s NLX futures market from May 23.

PLY: Nice idea, albeit with LCH technology, the digital brainiacs may allegedly be wary that one lost punchcard…and who knows what might happen. Seriously, this is a lovely idea but something pursued in sellside isolation doesn’t strike me as appreciating the zeitgeist of the era (but then again I sometimes wonder if some aren’t predicated upon being entirely ivory tower oblivious of the megadynamics given their hugely linear outlook – perhaps “inlook” might be a more appropriate term).

Disclosure Of Total LSEG Shares In Issue Pursuant To Rule 2.10

MondoVisione

QV Premium: DB1-LSE Merger Brief.

 

ICE AGM 2016 Results

ICE

PLY: Peace harmony and whatever Jeff says the shareholders agree. Then again the first definition of ICE shareholder insanity is going against the word of Jeff. The worrying thing is that there are shareholders who may think this rule can be applied to other exchange companies. So beware: this maxim is not invariably inter-operable, particularly not where management have arguably only temporary confluence of interest with shareholders.

 

Tullett Prebon AGM 2016 Results

Tullett Prebon

PLY: Notable amongst the non-execs of Tullett Prebon is Dame Angela Knight who of course so nearly became CEO of the World Federation of Exchanges but went to run an energy body instead and allegedly induced Xavier to flounce out of the WFE. So the epic bar room tales go anyway.

 

Turquoise Plans To Extend Dark Pool To Czech, Poland, Hungary

Atul Prakash – Reuters

“We are looking to introduce the ability to do mid-point dark trading for the emerging country securities,” said Robert Barnes, CEO of Turquoise. Barnes did not specify the launch date. Rival Liquidnet offers dark pool trading for eastern and central European-listed securities.

PLY: Understandable idea to apply to the few suitably sized stocks in the region from the inestimably excellent Robert Barnes and his Turquoise team.

 

Shanghai-HK Stock Link Draws More Institutions

Saikat Chatterjee – Reuters

Shanghai-Hong Kong Stock Connect is finally starting to attract more global institutional investors, as a lag in trading and settlements that posed a risk to investors has been ironed out.

More institutional activity on the platform will likely speed up reforms and the rollout of another scheme linking the southern city of Shenzhen and Hong Kong.

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

 

China Asks Britain For Advice On Creating Financial Super-Regulator

Michelle Price & Benjamin Kang Lim – Reuters

PLY: #srsly?

 

Chilean President Bachelet Opens LME Offices, Meets Leading Copper Miners (subscription)

Metal Bulletin

Chilean President Michelle Bachelet officially opened the LME’s new offices on Friday May 13, following the relocation of the exchange to its larger premises earlier this year.

PLY: While copper is in many ways, Chile Inc., it is still somewhat odd to have a former resident of Erich Honecker’s totalitarian East Germany (whose Presidential socialist interventions are turning the progressive Chilean economy backwards) opening a free market venue like the new LME floor but then again I suppose it sounds like an everyday headline for the parent company’s domestic media. Rumours that this was the most inappropriate invitation of the week have anyway been decimated by the casting of Lady Gaga to play Cilla Black in the upcoming Dionne Warwick biopic.

Private Markets

SECP Approves Regulations For Stock Exchanges

Daily Times

The Securities and Exchange Commission of Pakistan (SECP) has drafted the Securities Exchange (Licensing and Operations) Regulations, 2016.

Special Section: FTI, NSEL, India at the Crossroads

PLY: Flat to small off for MCX and FTIL.

Technology

Blockchain, Cyber & Industry Collaboration Dominate Discussion At ISITC Europe Meeting

MondoVisione

PLY: Rumour has it there was mass panic until somebody noted Blockchain probably wouldn’t lead to mass redundancies amongst the delegates, at which stage a notably more relieved audience got down to the nitty gritty of how it might all work out for the betterment of market process.

Products

SEBI Working On Mechanism To Allow Firms To Issue Securities Faster

KR SRIVATS – The Hindu Business Line

Once this facility of ‘Annual Information Memorandum’ is put in place, corporates won’t need to end up filing prospectus every time they issue securities. It would help companies do further fund raising without even taking merchant bankers’ assistance.

PLY: Hooray.

 

ASIC Warns Investors About Services Advertised By Top Ten Binary Brokers AKA Top 10 Binary Brokers.Com

MondoVisione

PLY: Good to see ASIC taking a proactive stance against these unlicensed brokers. Thanks to a heads up from Jacob Ma-Weaver (Cable Car Capital) I read a simply breathtaking article in the Times of Israel about the local binary businesses. It makes for deeply worrying reading – see here. Binary options are a fascinating product but there clearly are big issues with many who practice it. If you are wondering who to trust, imho Hamish Raw is Mr Binary Option and entirely above suspicion in the domain.

Career Paths

The BoD of Eurex Zürich and the Supervisory Board of Eurex Frankfurt have appointed Dr. Randolf Roth as a new member of the Eurex Executive Board. Roth will be responsible for the newly created Market Design department. His responsibilities include oversight of the evolution of Eurex’s market model, regulatory and functional design as well as the development of the rules and regulations of Eurex.

The supervisory bodies of Eurex accepted the resignation of Brendan Bradley from the Eurex Executive Board. Bradley, who was in charge of Innovation Management for Eurex, left DB1 on amicable terms in order to pursue new opportunities.

PLY: Randolf Roth has been running Zimory, the cloud solutions marketplace for the past couple of years and was originally due back at EUREX later this year. Again, DB1s loss will be others’ gain with the departure of Brendan Bradley, as the Carcrash phenomenon appears to mean employing lots of investment bankers to pool their ignorance on why exchanges aren’t short-term highly leveraged structures that occasionally require government funding when not being investigated for indexation malpractice… The more I see of the current DB1, the more it worries me.

ICE AGM 2016 Results: all eight director nominees received a majority of votes cast, with at least 85.2% of the voting “for” each of the directors. Each director was elected to a one-year term.

ICE BoD: Jeffrey Sprecher, Chairman & CEO – ICE, Chairman – NYSE, Charles Crisp, Jean-Marc Forneri, The Rt. Hon. the Lord Hague of Richmond, Fred Hatfield, Frederic Salerno, Judith Sprieser, Vincent Tese.

Tullett Prebon AGM 2016 Results:

– elected: Carol Sergeant (Independent on-Executive Director, Chairman of the Risk Committee & member of the Audit Committee).

– re-elected as directors: Rupert Robson (Chairman of the Board & of the Nominations Committee), John Phizakerley (CEO), Paul Mainwaring (Finance Director), Angela Knight (Senior Independent NED, member of the Audit, Remuneration & Nominations Committees), Roger Perkin (Independent NED, Chairman of the Audit Committee & member of the Risk & Nominations Committees), Stephen Pull (Independent NED, Chairman of the Remuneration Committee & a member of the Nominations Committee), David Shalders (independent NED, member of the Remuneration & Risk Committees).  

Sebi has approved the appointment of Ashok Chawla, the former chief of fair trade regulator CCI,  as Chairman of National SE. His tenure would be till March 27, 2019.

The Thomson Reuters Founders Share Company announced that Dame Helen Alexander will become Chairman of its Board, effective January 1, 2017.

Financial Calendar

16.05 – Record date BGC Partners $0.16 dividend

16.05 – Record date MOEX RUB 7.11 2015 dividend

18.05 – CME 2016 AGM

18.05 – Record date Oslo Bors NOK 4.15 dividend

19.05 – Record date ENX €1.24 yearly gross dividend

19.05 – Record date Thomson Reuters $0.34 quarterly dividend

19.05 – Tullett Prebon 11.25p final 2015 dividend payment

20.05 – ENX €1.24 yearly gross dividend payment

20.05 – NZX AGM

New! – 22.06 – BGC Partners AGM 2016press release.

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

Crowdfunding

US Crowdfunding Launch Faces Fight Over Rules (subscription)

Richard Waters, Barney Jopson & Nicole Bullock – Financial Times

The long-delayed introduction of crowdfunding in the US takes effect on Monday, amid warnings that the new market will be choked by regulation…and an attempt by Republican lawmakers to relax the rules.

PLY: It’s frustrating that there has not been more process to unleash free markets in the cradle of capitalism…

 

FINRA Offers What Investors Should Know About Crowdfunding

MondoVisione

Other stories

CFTC Staff Issues Residual Interest Deadline Report

CFTC

 

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