May 27 2015

elb2 Today in Exchange Invest Daily:

ex-BAML staffer Loh Boon Chye is appointed CEO of SGX as we anticipated in March. I Love Plus500 says Odey with 19% holding, although I cannot say I understand why. Tom Kloet becomes perhaps first insider in 2 years to buy stock in own company (NASDAQ). Meanwhile, the Blockchain is much discussed and arguably little understood despite being the bandwagon of choice for aging analogue bankers. TV speculation on an MCX-MSXI (or whatever they call themselves this week) merger… and much more, happy scrolling…

Public Markets

LME Aims To Boost Liquidity, Electronic Trading
Eric Onstad – Reuters UK

LME took more steps on Tuesday to boost liquidity by making it easier for new members, including U.S. speculators, to have direct access to its electronic trading system: aiming to allow category 3 and 4 members to trade on its electronic platform LME select in addition to category 1 and 2 members.

Odey Increases Stake in Plus500, Overtaking Co-Founder Gonen
Richard Partington – Bloomberg

PLY: After the Cable Car Capital short blog of last week, it seems Odey is eager to buy and now owns 19% after a purchasing frenzy Friday.

I must admit to being intrigued, I have no idea why they are so keen to buy Plus 500 which raises a multitude of issues, as per the Cable Car Blog of last week.

The Plus500 effect. What Is Going On With The Firm & Are Other Brokers Catching Its ‘Flu’?
LeapRate

PLY: DukasCopy TV try the old Officer Bar-Brady “Noting to see here, move along please…” monologue from South Park.

Previous comment and mentions about Plus 500 slump here & here.

…In reality Plus 500 may be an outlier in some respect but the overall sector has got away with sailing close to the wind for a long time…albeit until the SNB tornado earlier this year.

Moscow Exchange Joins FXPA
LeapRate

Moscow Exchange (MOEX) has joined as full members of The Foreign Exchange Professionals Association (FXPA), which represents the collective interests of professional Forex industry participants

NSE Introduces Post-graduate Course In ‘Global Financial Markets’
Hindu Business Line

The National Stock Exchange has launched a full-time post-graduate programme in Global Financial Markets (PGP-GFM) – the first time such a course is being introduced in India.

NSE said this would be a “highly specialised programme” where participants would be taught globally benchmarked curriculum and will offer 14 international regulatory certifications from the US, Singapore and India. Classes will be held in New Delhi from July 27.

PLY: Good for NSE. Lots more excellent Indian education. As I recall in the late 1990’s the NSE and BSE each were educating somewhere between the population of Luxembourg and Rhode Island annually in shorter market education courses.

Nasdaq To Step Up Blockchain Trials (subscription)
Financial Times

PLY: In a decade or so, in a world of real-time real-time settlement ably assisted by the Blockchain, we will all wonder why it took so long to settle in 2015…

Private Markets

Saudi Regulator To Increase Allocation For Investors In IPOs
The National

Saudi Arabia’s Capital Markets Authority plans to increase the proportion of shares offered via IPOs allocated to institutional investors to help reduce market volatility as the local bourse prepares for the direct entry of foreign investors for the first time.

NSE’s Membership Of WFE Boosts Dual Listing Prospects
THISDAY Live

PLY: First I knew that being a WFE member in your primary listing reduces dual listing fees at JSE… The things you learn even from publishing Exchange Invest, not just reading it…

Is Goldman Sachs Flirting With Bitcoin, Or The Blockchain?
Bitcoin Magazine

PLY: Let me see, Bitcoin involves money, technology, trading and profit – okay who would care to take a guess at the answer here? No prizes for getting the right answer.

CFTC Staff Issues No-Action Letters Relating To Swaps Trading Platforms In Australia
The National Law Review

On May 19, CFTC issued two no-action letters granting relief to certain swaps trading platforms in Australia and participants executing swaps transactions on such platforms.

Charles Schwab Ranks Highest In U.S. Self-Directed Investor Satisfaction In 2015 J.D. Power Study
Finances.com

Charles Schwab has received the highest ranking in overall satisfaction nationwide in the 2015 U.S. Self-Directed Investor Satisfaction StudySM from J.D. Power. With an index score of 801 on a 1,000-point scale, Schwab scored 38 points above the overall satisfaction industry average, and received the highest scores in the areas of interaction and account offerings.

PLY In response, allegedly Schwab sold their score to an aggregating HFT shop to see if they could get something back for the order flow.

Paper: US Investors Visit Tehran Stock Exchange
Payvand

A foreign delegation of asset managers, including Americans, have visited Tehran Stock Exchange for the second time in recent weeks as interest is building in a country being billed as the latest attractive emerging market.

A group of 17 investment managers from Russia, Britain, Egypt, Greece, Switzerland, the US, Turkey, Italy and the UAE visited the bourse on Monday and held talks with its chief Hassan Qalibaf-Asl, the financial daily Jahan-e Sanaat reported.

Zagreb, Ljubljana Stock Exchanges Plan Joint Activities
SeeNews

The stock exchanges in Ljubljana and Zagreb plan joint activities to increase investor interest and to further strengthen the existing trust of local as well as international investors.

PLY: Talks apparently continue as Zagreb looks to acquire Ljubljana SE from Vienna.

Indiegogo’s Kate Drane “We’re building a global community that funds what matters to them, built on trust”
The Rude Baguette

Indiegogo has rapidly grown into a global platform, leading many hardware startups around the world to success. Their rise has been a welcome development for hardware investment shy VCs, given Indiegogo’s solid track record.

EGX Prepares To Launch 2nd Investor Summit To Bolster IPOs, Capital Hikes
The Cairo Post

The Egyptian Exchange (EGX) is preparing to launch its second annual conference for investment in the stock market, with the aim of bolstering IPOs and capital increases.

Sri Lanka, India Depository Systems Sign MoU For Knowledge Sharing
Colombo Page

The Central Depository System (Pvt) Ltd (CDS), a fully owned subsidiary of the Colombo Stock Exchange (CSE) signed an MoU with the National Securities Depository (Pvt) Ltd of India (NSDL), for the purpose of knowledge sharing in the area of depository services.

The NDSL was the first and is the largest depository in India, owned by a group of local banks.

Special Section: FTI, NSEL, India at the Crossroads

MCX Ltd Reply To Clarification Sought By The Exchange
Hindu Business Line

With respect to news article appearing on ET Now on May 26, 2015 titled “MCX & MSXI explore merger options, Merger to help MCX to get into Stock & FX trading, Both exchanges see value in merger”

Multi Commodity Exchange of India Ltd replied stating “As a matter of policy, we do not comment on market rumors.”

PLY: Not clear if the TV show in question was just a bit of a wild riff to fill in the bit between guests or more substantive, we can’t seem to track down the tapes online alas. I would have thought merging MCX and MSXI, while clearly having a multiplier of “problem shared” effects does not make a lot of sense right now?

Products

Bond Market Needs Visibility To Reduce Risk
Christopher Joye – The Australian Financial Review

One of the most misunderstood “tail risks” investors are talking about right now is the potential for illiquidity in Australia’s $1 trillion investment-grade bond market.

PLY: Given it costs the square root of zero to borrow right now for average corporates, not merely multinationals, a degree of concern is clearly understandable!

SocGen Deal For Bache Illustrates Commodity-Trading Woe (subscription)
Wall Street Journal

Société Générale SA is picking apart Bache—a commodities house and the last link to a historic Wall Street name—in another sign of how trading in raw materials has fallen on hard times.

Indexes

FTSE To Upgrade Palestine Exchange To Frontier Market Status
Noodls

Career Paths

SGX is set to appoint former senior Bank of America Merrill Lynch banker Loh Boon Chye as its new chief executive after Magnus Bocker steps down.

PLY: Unsurprising news. Indeed previewed in EI March 4th when Loh Boon Chye stepped down as head of Asia-Pacific markets at BAML. Looks like the SGX board had the deal sewn up as they announced Magnus’ departure. All the best to the new SGX CEO.

Goldman Sachs Group Inc. has named new co-heads for its investment banking operations in Asia.The existing head of the investment bank, Mattew Westerman, is said to be relocating to another senior role in London. Kate Richdale and Andrea Vella will be the new co-heads of the Asian region that excludes Japan. The investment banking operations in New Zealand and Australia will be led by Christian Johnston.

Bitcoin startup Xapo has appointed Visa founder Dee Hock, ex-Citibank CEO John Reed, and former US Treasury Secretary Larry Summers to its new advisory board.

PLY: Am I alone in being bemused at so many utterly analogue dinosaurs of banking crises past are jumping on the Bitcoin bandwagon? In answer to the notion “do they know what they are doing?” for some former bankers, I have heard a suggestion “why should they start this late in their careers?” Clearly that doesn’t apply in this case.

I think.

Financial Calendar

This week:

27 May

Plus 500 holds its annual general meeting.

PLY: Clearly unless Crispin Odey has placed his towels over all the chairs, this meeting promises to be much much more exciting than the State Opening of Parliament elsewhere in London.

Record date ATHEX dividend of 0.189 euros per share
CBOE Ex-Dividend Date
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:

Euronext Announces Third Pan-European Days In New York & Boston from 1- 4 June. The event, which previously took place only in New York, has been extended to cover Boston for the first time

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.

Share Notes

Nasdaq Insider Selling : Pc Nelson Griggs Sells 5,000 Shares.
The Daily Rover

Nasdaq EVP Nelson Griggs sold 5,000 shares May 14, 2015 at $51.21 per share, total bargain $256,050.00.

Tom Kloet, director of Nasdaq purchased 2,000 shares on April 24, 2015, total bargain $96,920

N.B. 18.65% of the shares are held by the company Insiders, 79.7% of the shares are held by institutions.

PLY: I do believe we are breaking new ground here, new (since March) NASDAQ NED Tom Kloet (former CEO of TMX and SGX) BOUGHT shares. Yes, bought shares. Good for you, Tom, you trailblazer! First actual vote of confidence in an exchange stock from management I can recall in over 2 years of Exchange Invest (maybe I missed something because database dude Florin is on holidays…).

Analyst Notes

CME Group (NYSE:CME) has received an “A+” credit rating from Morningstar. Low default risk.
OCC has retained its AA+ or ‘stable’ rating from Standard & Poor’s.

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.

Crowdfunding

Critics Raise Concerns About Equity Crowdfunding Site Crowdcube (subscription)
Financial Times

PLY: Pigeons finally coming home to roost for Crowdcube, the UK’s market leader in equity crowdfunding and Seedrs who use, respectively a B share issuance and a nominee system. I concur that there needs to be a better system but at the same time, to be fair to the platforms, they were created to deliver workarounds because of the sclerotic, anti-capitalist nature of regulation.

Setback Fails To Halt Success At Crowdfunder
The Courier

Crowdfunding platform Crowdcube has raised more than £1.5 million in funding for seven Scottish businesses.The figures, which relate to the period since the firm established an office in Edinburgh last October, come just weeks after Perth-based Braveheart Investment Group moved to terminate its joint venture with the firm.

Braveheart has since moved to establish a new relationship with Seedrs Limited, one of Crowdcube’s main rivals.

However, that blow has not stopped Crowdcube from progressing in Scotland after it secured funding for a number of growing businesses.

PLY: Crowdcube also has an affiliate in Poland which has not been so far able to clearly emulate the success of its UK parent.

Other stories

EU Vote Sends Draft Law To Rein In Bank Risks Back To Drawing Board
Huw Jones – Reuters UK

A panel of EU lawmakers narrowly rejected a draft law aimed at curbing trading risks at banks after they failed to bridge a deep divide between the main parties.

The European Parliament’s economic affairs committee voted to reject the draft law on bank structural reform by 30 votes to 29 in a relatively rare move.

PLY: It isn’t quite progress but it is at least not more regulation.

Lending Club Vs. Prosper & More: Simon Cunningham of LendingMemo Talks With Us
Kriss Bergethon – The Franklin Society

An interview with Simon Cunningham of LendingMemo.about his personal loan finding filters and the state of the industry.

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