May 27 2013

elb2 It’s Memorial Day in the US and the UK has another rainstorm, I mean Bank Holiday too. However we’re still working on EI…

I was thinking over the weekend and after reading a chilling Alliance Bernstein research note, have opted to run with the looming Buyside disaster in Europe as lead story – it’s important in every way to financial markets infrastructure.

Meanwhile Sukuk and RMB products on exchange are amongst the highlights of today’s fascinating cornucopia of information. Oh and if you read things the way I do, Betfair just invited a new PE bid…

Buyside Under Threat From Dark Pool Caps (subscription)

Financial News
Regulators risk driving “a stake in European cash markets” if they act on proposals to cap dark pool trading volumes, according to analysts who say the rules would leave the buyside at the “end of the food queue”.

PLY: I have been pondering a Sanford Bernstein research paper for a few days now which first alerted me to this latest shambolic episode from the EU.

This proposal would be nothing short of a disaster for European investors with negative ramifications for exchanges too.

One big problem for block trading facilities is the use of the word “dark.” Just as ECNs became ATS then MTFs and Moneybrokers became IDBs, so too now, block trading “dark pools’ need to become “Institutional Liquidity Pools/Platforms.” That ought get the message across that “dark’ doesn’t infer a villain, these platforms (ILPs) are an essential aspect to trading markets in size for modern institutions.

Moreover, an MEP stating “we must restrict dark pools” sounds coherent whereas an MEP stating “we must ban Institutional Liquidty Platforms” will sound as misinformed as they are…

It is early stages on this utterly moronic proposal but it needs to be axed and the “dark pools” ought to consider a subtle rebranding and a collective lobbying at Brussels to help enlighten as to their vital function…

Public Markets

President Wants Prague Warsaw Merger

Prague Daily Monitor

Czech President Milos Zeman favours a Prague Warsaw stock exchange merger.

Zeman said the Prague bourse (BCCP) has been declining over a lack of managerial capabilities.

“The Warsaw stock exchange is prospering, and the President (Bronislaw Komorowski) informed me that its performance has already exceed that of the Vienna bourse,” Zeman said.

PLY: An odd remark. For one thing Petr Koblic, head of Prague SE is the talented one in the CEESEE management who was unfortunate his private equity backers had to sell out when the crisis hit. His vision was good. Prague’s problems stem from being a subsidiary of the Viennese dinosaur. True Prague plus Warsaw is a good fit, the problem is all the other low grade stuff you have to wade through to extract Prague from CEESEE group.

Philippine Stock Exchange to Buy More PDEx Equity

GMA News

The Philippine Stock Exchange (PSE) hopes to acquire more equity in Philippine Dealing & Exchange Corp. (PDEx), the Bond market from other shareholders…

NASDAQ Dubai Plans Platform For Trading Sukuk And Bonds On-Exchange

NASDAQ Dubai, is preparing to open a platform on which institutional & HNW investors can trade Sukuk and conventional bonds settled through Euroclear Bank.

The tradable securities will initially comprise at least 12 Sukuk and bonds that are listed on the exchange, with a nominal value of 10.9 billion dollars

PLY: A step forward for NASDAQ Dubai. The problem with international Sukuk trading remains variations in standards amongst different regions of the Islamic world.

India – Bourses slash STT

Business Standard

NSE and BSE today slashed Securities Transaction Tax (STT) on buying and selling of equity-oriented units.

The tax will be eliminated for mutual fund buyers and reduced to 0.001 from 0.1 per cent for all sellers.

PLY: The less the friction from transaction taxes, the better the markets…

SGX Launches Depository Services For RMB Bonds

Singapore Exchange (SGX) today launched depository services for renminbi-denominated (RMB) bonds.

PLY: a Standard Chartered Bond leads the way here and once again Singapore stakes its claim to becoming the leading offshore RMB financial centre (Hong Kong being an onshore ‘dongle’ to the mainland nowadays).

Private Markets

HKMEx’s Cheung Quits All Hong Kong Public Service Posts

Bloomberg

Hong Kong Mercantile Exchange Chairman Barry Cheung has resigned from all public service positions, including the city’s Cabinet, because he’s under police investigation, related to the HKMex debacle.

Betfair Could Take on Debt, Says ex-Chairman

Telegraph.co.uk

Co-founder and former chairman, Ed Wray, has said Beftair could consider restructuring its balance sheet in the wake of its rejection of a £985m offer from a consortium led by private equity firm CVC.

PLY: Fascinatiing statement: “Although the bid had its merits, he would only have supported it if he had been able to roll forward his 11.1pc stake in the company.” Expect more PE companies to bid methinks who factor in maintaining the circa 35% owned by founders…

Taiwan Futures Exchange Enters Into Partnership With Hanoi Stock Exchange

The Taiwan Futures Exchange (TAIFEX) and the Hanoi Stock Exchange (HNX) today signed an (MOU) to share information and best practices pertaining to product development, business and marketing initiatives, technology, in areas of mutual interest.

PLY: TAIFEX remains the sort of market much of Europe can only dream of ex the big few. Over 2 million active client accounts with a population of about 23 million or the same as Romania. By comparison, there were at most 85,000 Romanian investor accounts in stocks and derivatives last time I looked…

Kenya – Bourse Posts Slight Drop in Profit

Daily Nation

Nairobi Securities Exchange has reported a slight decline in net profit for FY2012 despite increasing revenue. Net profit declined 1% to Sh85.1 (USD 1million) . Total income rose by 13.5 per cent to Sh384.9 (USD 4.55m).

Mongolia Securities Law Paves Way for Dual Listings

Businessweek

With around 40 companies with Mongolian assets now trading overseas, the Mongolian Parliament passed a securities law removing a ban on trading of foreign shares, paving the way for local listings by overseas companies.

Mongolian SE CEO Khangai Altai hopes the move will bolster bourse market capitalisation by 30 billion to $40 billion in five years.

PLY: …You may recall the Mongolian SE is powered by LSE’s Millennium solution.

Calcutta Stock Exchange aims to resume trading from 3rd week of June

Economic Times

The Calcutta Stock Exchange(CSE) is aiming to resume trading from the third week of June.

PLY: Shutdown since April, the venerable CSE is battling back…

Technology

ASX Co-Location for Thomson Reuters Elektron Managed Services

Thomson Reuters will co-locate Elektron Managed Services with (ASX). providing local and international financial institutions with high-speed and cost-effective connectivity to financial markets data to support programmatic trading strategies in Australia.

PLY: A good deal for both TMR and ASX. TMR now has a network stretching throughout Asia for Elektron Managed Services.

Appointments

LME Appoints Nick Ong-Seng As Executive Director

Nick Ong-Seng will replace Diarmuid O’Hegarty as Executive Director: Regulation & Compliance. O’Hegarty’s new position as Chief Operating Officer will come into effect on Nick’s arrival in August.

PLY Congratulations to both Diarmuid and Mr Ong-Seng.

Crowdfunding

The Top 5 Crowdfunding Trends for 2013

Crowdsourcing.org

5 of the top insights for the future of the crowdfunding industry that became clear during the process of compiling the recently released 2013CF: The Crowdfunding Industry Report.

PLY: Actually the trends are here but the other material is interesting on the link above.

The key factors to understand about crowd funding is that it is barely in its infancy and that there is still a huge expansion to come while the US trends will not all readily transmit to other markets, particularly the dysfunctional investment dessert that is many emerging nations…

Universities explore crowdfunding, social media to raise money

USA TODAY

Universities across the USA are stepping beyond traditional fundraising methods.

PLY: Note that no such story has yet appeared in the UK or Europe where the university sector maintains the delicious delusion that governemnt will pay for their future and therefore they don’t have to sully themselves worrying about financial innovation…

Other stories

Potential Tax Change Could ‘Decimate’ Options Trading Volume (subscription)

Wall Street Journal (blog)

Congressman Dave Camp’s proposal to create a more unified tax policy for all derivatives has been under fire for weeks, with the options industry—which has had its own functional tax policy for decades—uniting against the proposal. Rep. Camp (R., Mich.) is the Chairman of the House Ways and Means Committee.

PLY: News that Europe isn’t the only place with retarded politicians is not encouraging for investors anywhere. The idea that Tabb are circulating a potential volume collapse of as much as 40% (aka back to 2006) really does not bear thinking about for investors in NYX, NDAQ or DB1…

Africa – need for a mini stock exchange

GhanaWeb

The Bank of Ghana and other business regulatory bodies must create a mini stock exchange for Rural and Community Banks (RCBs), according to the Association of RCBs.

PLY: We love MicroExchanges, the more the merrier!

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