May 26 2015

elb2 The Plus 500 AGM looms at just the moment the buzz around the stock is significantly negative. NYSE pushing midday auction. Buy side forex clearing is go at LCH.Clearnet. SEBI’s attempt to undo free markets remains broadly unparalleled as it becomes clear how NSEL has devastated profits at FTIL. Islamic forum brings a flood of pertinent stories and much more…

Don’t forget we actually did publish yso those yesterday Memorial Day or enjoying the rain in the UK and other Bank Holidays, the bulletin you missed was in your inbox or here.

Public Markets

Plus500 Share Price: Investor Focus On Upcoming AGM
Veselin Valchev – iNVEZZ

Plus500 Ltd (LON:PLUS), the AIM-listed trading platform, endured a disastrous slump in its valuation last week, after it announced that it had frozen the accounts of nearly half of its UK customers, following the implementation of fresh anti-money laundering checks.

Plus500 said an update on the situation will be posted on Wednesday, when the company holds its annual general meeting.

PLY: I remain deeply perturbed by Plus 500 which we have discussed in various places, including yesterday and last week.

Sebi Needn’t Mimic Korea’s Errant Derivatives Policy

PLY: The ability of SEBi bureaucrats to clutch at any straw to damage markets remains uncanny. The Korean move was not helpful while the likes of the BSE bleating to kill competition demonstrates how despite modern vestiges on the edifice, that it remains a rather reactionary blob thinking like a 19th century monopolist.

LCH. Clearnet Launches Buy-Side Clearing Of FX Derivatives In Europe

ForexClear has extended its client clearing offering to include European model account structures. End-users trading NDFs are now able to connect to four clearing brokers offering the service.

NYSE Liquidity Drive Pushes Midday Auction (subscription)
Financial Times

The New York Stock Exchange plans to institute a midday auction in an effort to boost liquidity in thinly traded stocks.

The move makes it the latest high-profile venue to explore the use of auctions as a way to attract trading back on to the exchange that has either leaked away to rival venues or disappeared as brokers withdraw from uneconomic parts of the market.

Deutsche Boerse: Shanghai Bourse To Form JV Exchange In Germany
4 Traders

News said that Shanghai bourse may declare forming JV exchange in Germany in September with Frankfurt Stock Exchange under Deutsche Borse Group, when Chinese and German stocks will realize concurrent listing.

Beijing representative of Deutsche Borse confirmed cooperation with Shanghai bourse, declining to reveal more details, which will not be declared until one or two months later. The cooperation has been nailed down by the Ministry of Finance on March 19 in a joint statement for bilateral financial cooperation.

PLY: Will the cooperation with the Chinese really create this window to jump across the Through Train tracks? Interesting…

China’s Bailout Window May Shut In Three Months, OCBC Says
David Yong – Bloomberg

China will likely prop up bondholders in any onshore defaults until August to ensure a smooth clean up of its local debt mess, according to Oversea-Chinese Banking Corp.

PLY: The Chinese corporate bond market is teetering and that does not bode well for the rest of the world’s corporate bond markets, let alone the vast number of bond platforms which have been launched into the market…

China To Scrap Aggregate Quota For Shanghai-Hong Kong Stock Link, Ming Pao Says
The Straits Times

The aggregate investment quota for the Shanghai-Hong Kong stock connect program will be abolished when a similar equity link starts with the Shenzhen bourse, HK newspaper Ming Pao reported today.

Private Markets

PSE To Move Office Following USD18m Property Purchase
Asia First Financial Intelligence Limited

The Philippine Stock Exchange, Inc (PSE) said it expects to move to its new office in the latter part of next year following the purchase of office units in Bonifacio Global City (BGC) for a total purchase price of Php805.37m (USD18m).

Zimbabwe: Harnessing The Stock Exchange For Capital
All Africa

In 2001, The Economist branded Africa “the Dark Continent” but that sentiment has changed. The same publication in 2013 saw the continent as “Africa Rising”. Despite pockets of instability, Africa has been making major strides in the development of its institutions, with a growing number of stable, healthy democracies that have transitioned to new governing parties.

PLY: Readers are advised to recall that as a quasi-business publication, “The Economist” remains the most pleasant way to remain elegantly misinformed about the world.

Bitcoin Might Be The Next Big Thing In The Remittance Market

Bitcoin’s most disrupting feature is its decentralized architecture. Indeed, bitcoin relies on a P2P network of computers to proceed money transfers. Each part of the network works to create new bitcoins (‘mining’), keep the network alive and validate transactions.

All the transactions are registered in the blockchain that is used to validate a transaction using cryptography technology: it ensures that you can’t use a bitcoin you don’t own or you don’t use the same bitcoin more than once. This last action previously required a third party, but with bitcoin this is not the case anymore: the network replaces financial institutions and banks.

Abu Dhabi To Rival Dubai’s Financial Hub

While there is still much that is unclear as to how it will materially differ from both its Dubai rival, the Dubai International Financial Centre (DIFC), not to mention Abu Dhabi’s ill-fated predecessor, Saadiyat Island – there is now compelling evidence that ADGM will take a firmly eastwards, east-of-Suez outlook. The new centre is modelling itself explicitly on the main Asian hubs of Hong Kong and Singapore.

International Shari’ah Research Academy for Islamic Finance (ISRA) And Securities Commission Malaysia SC) Launch Joint Publication On “Islamic Capital Markets: Principles And Practices”

Special Section: FTI, NSEL, India at the Crossroads

FTIL and MCX both flat to slightly off.

FTIL Loses Substantial Income From NSEL Crisis Fallout
Live Mint

According to FTIL’s latest financial statements, total income fell nearly 72% between fiscal 2013 and fiscal 2015

Read our Premium NSEL Scandal Brief – Main File and NSEL-FTIL Merger Brief

PLY: How the mighty have fallen. #Shahdenfreude.


Regulator Asks DSE To Explain Technical Failure
The Daily Star

A technical glitch hit DSE trading for several hours as we reported yesterday.

FXCM Japan Phases Out Tradency’s Mirror Trader
Andrew Saks-McLeod – LeapRate

The sun is due to set on FXCM Japan’s Mirror Trader service on May 29 this year as a result of new owner Rakuten Securities’ intention to eschew Tradency’s service


National Stock Exchange Introduces Rollover Facility In SLB
Economic Times

NEW DELHI: In a bid to increase participation in the stock lending and borrowing (SLB) market, NSE has introduced a rollover facility: SLB mechanism allows short sellers to borrow securities for making delivery. The rollover facility in the SLB session will be available for a three-month period (original contract plus two rollover contracts).

LendingTree Launches New, Simple Way To Shop For Personal Loans
PR Newswire

LendingTree®, has launched an advanced second-generation personal loan marketplace, designed to provide consumers with fast and accurate personal loan quotes from multiple lenders and is capable of syndication.

TradeHero In Pacts With SGX, Macquarie Securities Thailand
Digital News Asia

SINGAPORE startup MyHero Ltd, the company behind financial learning and stock market simulation app TradeHero, said it has partnered with the Singapore Exchange (SGX) to launch the SGX StockWhiz 2015 contest. This follows an agreement with Macquarie Securities Thailand (Macquarie) for DW Hero, a virtual derivative warrants (DW) trading contest.


Japan Exchange Group: Start Trading Of Nikkei 225 Weekly Options

Nikkei 225 Weekly Options were launched on May 25, 2015.

FTSE to Include China A Shares in Transitional Emerging Indexes

FTSE Group will include China’s stocks in two new emerging-market indexes, laying the groundwork to include the world’s best-performing equities in benchmarks tracked by international money managers.

Career Paths

The supervisory board of Eurex Clearing AG welcomes Susanne Clemenz as a new member. She fills the previously vacant seat on the 12-member board.

BSE Establishes Women’s Committee
Bahrain News Agency

Secretary General of the Supreme Council for Women (SCW) Hala Al Ansari praised Bahrain Stock Exchange (BSE)’s initiative to establish an internal committee specialised in the affairs of women working in the stock market, in line with the National Plan for the Advancement of Bahraini Women 2013-2022.

Financial Calendar

This week:

26 May

Ex-dividend date ATHEX dividend of 0.189 euros per share

27 May

Plus 500 holds its annual general meeting.

Record date ATHEX dividend of 0.189 euros per share,

29 May

Record date CBOE $0.21 quarterly cash dividend
Record date TMX $0.40 dividend
Oslo Bors NOK 8.20 dividend payment
BGC Partners $0.14 quarterly dividend payment

Next month:

Interactive Brokers Group, Inc. to Issue Quarterly Dividend of $0.10 on June 12th
CBOE Holdings, Inc to Issue Quarterly Dividend of $0.21 on June 19th

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

Analyst Notes

London Stock Exchange Group Plc’s Buy Rating Reaffirmed at Bank of America
Charles Schwab Corp Receives “A+” Credit Rating from Morningstar (SCHW). Low default risk.
Credit Suisse flags flat year for ASX. CREDIT Suisse has downgraded its 12-month target for the S&P/ASX 200 from 64,00 points to 5,850 points, which is just two per cent above its current levels
Deutsche Bank upgraded Hong Kong Exchange & Clearing to Buy

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

All Analysts, Banks and Brokers are welcome to contribute to this section.


Is That Crowdfunding Campaign Really Just a Scam?
Yahoo Tech

Crowdfunding platforms such as Kickstarter and Indiegogo have changed how tech products come to market, but not always for the better.

PLY: Ronald Reagan correctly identified the most dangerous sentence in the English language as “I’m from the government and I’m here to help” while I would add the 2 most useful words in the English language are “Due Diligence.”

Other stories

Regulatory Arbitrage Without Ethics Could Crash Islamic Finance

The growing list of financial centres keen to emerge as Islamic finance hubs runs the danger of creating regulatory arbitrage as competing environments issue light touch regulation in order to attract business.

A scandal such as BCCI would likely to set the industry back decades.

Whilst new entrants are welcome into the growing Islamic finance industry, the ethical principles of Islamic Economics should be at the forefront of thought and intention rather than financial structuring. It is likely only socially responsible financial centres with depth, liquidity, and well established regulatory and legal frameworks will build the critical mass and emerge as significant Islamic Finance hubs. London and Kuala Lumpur are the obvious two locations which match these requirements.

In order to succeed smaller jurisdictions such as Malta and Ireland need to leverage more off the ethical principles of Islamic finance, which is the only area where they can hope to compete with the bigger locations.

PLY: Isn’t the problem one that actually standards of Islamic Finance vary vastly from one variety of Islam to the other, as opposed to being a pure ethical issue per se? Hence for instance the Middle East has been traditionally more strict on acceptable products while other countries such as Malaysia, for instance, interpret the products differently. That is a question of interpretation, not ethics.

Strategic Competition In Middle East & North Africa Requires Regional Solution
Exchange Morning Post (press release)

Chaotic geopolitics across the Middle East and North Africa could lead to a new strategic order in the region; Arab countries and Iran should come to terms with one another to bring greater regional stability.

ECB Error Spurs Questions About Policy Disclosures

An ECB snafu last week that meant one of its officials gave market-moving information to a private audience including major hedge funds hours before it was made public is raising broader concerns about European policy makers’ behind-closed-doors meetings.

PLY: And elsewhere the Bank of England emailed a journalist in error with details of the Old Lady’s (top secret) Brexit committee… In a world of big data and low latency information, data errors are only going to be more prevalent, unless regulators can actually suggest all practitioners take a vow of silence.

“Facilitating Innovation In The Islamic Capital Market Keynote Address By Dato Dr Nik Ramlah Mahmood, Deputy Chief Executive Securities Commission Malaysia, At The IFN Asia Forum 2015, Tuesday, 26 May 2015

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