November 17 2014


Istanbul IPO on for end next year, Virtu may be sooner.. Meanwhile Ukraine homogenises standards with Russia and SGX plans a bond platform.

MCX results poor as the commodity fiasco festers in India. At the same time there is a renewed mood of optimism in much of Romania where they elected Sibiu’s Mayor Klaus Iohannis as President – a wonderful piece of news for those who prefer their politics separate from corruption. Back in his native Sibiu, alas the SIBEX remains bereft of management and plans with another leap in losses due to a vacuum of competence (let alone strategy or vision) at the top.

Happily the Philippine SE (PSE) saw saw a revenue leap from listings to show how exchanges can be managed profitably in emerging markets. Welcome to Monday’s Exchange Invest, the free daily review of markets and their structure:

Public Markets

MCX Q2 2014 Financial Results

Quarter ended 30 September 2014

Total income from operations INR 5,482.5 lakhs (USD 8.88 mln), down 37.7%. Net profit INR 2,937.55 lakhs (USD 4.76 mln), up 8.6%
Diluted EPS INR 5.79 (USD 0.09).

Six months ended 30 September 2014

Total income from operations INR 10,641.66 lakhs (USD 17.24 mln), down 50%. Net profit INR 5,278.45 lakhs (USD 8.55 mln), down 39.44%. Diluted EPS INR 10.4 (USD 16.85)

PLY: NSEL festers without resolution, all markets are suffering as a result.

PSE Income Jumps 28% In 9 Months

The PSE said its net income climbed 28.1% YoY to P718.96 million (USD 15.99 mln) while operating revenues for the January to September period rose 18.7% at P1.19 billion (USD 26.46 mln).

SIBEX Q3 Financial Results

September 30 2014

Net turnover RON 864,660 (USD 245k), down 4.38%. Total revenues RON 952,014 (USD 270k), down 27.8%. Loss RON 1,442,861 (USD 409k), compared to RON 1,162,789 (USD 352k) in 2013

Money Flows To Mainland As Through Train Opens
Kazunori Takada & Saikat Chatterjee – Reuters

International buyers snapped up Chinese stocks on Monday at the debut.

PLY: Plaudits to all parties on making this deal happen in barely 6 months.

China Gives Through Train Tax Breaks
Pete Sweeney & Michelle Price – Reuters

China will temporarily exempt taxes on profits

PLY: NB Michelle Price has moved from Financial News to Reuters (still in Hong Kong).

Operational Complexities Mean Stock Connect Set For A Slow Start (subscription)
Jeremy Grant – Financial Times

PLY: Where there’s a will there’s a way. I doubt the (admittedly cumbersome) settlement process will make a huge difference…There are years of pent up demand for Chinese stocks to be satisfied.

HKEx CEO Charles Li – Latest Charles Li Direct: The beginning Of A Long Journey

PLY: All aboard! (Plaudits to the oft criticised Charles Li).

Taiwan-Singapore Stock Market Link Set For H1 2015

EI reported last month that Taiwan SE (TAIEX) is building a cross-border online trading platform following agreements for direct trading between Taiwan and Singapore, Japan & the UK.

MCX Approaches SEBI For Retaining Stake In MCX-SX, MCX-SX CCL
The Economic Times

MCX has requested SEBI to allow the company to retain its stake in MCX-SX and MCX-SX CCL.

PLY: End of FTIL era ought ought to help MCX retain subsidiary stakes.

TMX Launches TSX Private Markets

CFTC Calls For International Help On Derivatives Oversight (subscription)
Philip Stafford – Financial Times

CFTC Commissioner Wetjen has called for his own agency to defer more oversight to overseas jurisdictions to prevent post OTC fragmentation.

Bank of China Authorised As Trading & Clearing Participant At Deutsche Börse
Deutsche Börse

Private Markets

BIST IPO – Turkey Seeks Boost To Istanbul As Financial Hub
Constantine Courcoulas – Bloomberg

Turkey is planning a public sale of shares in Borsa Istanbul (BIST), home to its $262 billion stock market, by the end of next year as it seeks to entice investment to its financial capital.

The government authorized the IPO of as much as 42.75% of BIST in a decision released on Nov. 14.

Virtu Aiming For Spring 2015 IPO
John McCrank & Jessica Toonkel – Reuters

Market maker Virtu Financial hopes to go public in the spring, about a year after it originally planned its market debut.

EI reported in April that Virtu Financial cancelled the plans for an IPO.

Shenzhen SE & Shanghai SE Unfold Discussion On Deepening Cooperation

Bitcoin Startup Coinbase Is Raising Another $50 Million
Ryan Lawler – TechCrunch

Bitcoin startup Coinbase is seeking to raise another round of up $50 million in new capital less than a year after its last financing, a $25 million Series B led by Andreessen Horowitz. That’s a pretty big jump in a short period of time, and would once again make Coinbase the best-capitalized Bitcoin startup after recent $30 million funding rounds for BlockChain and BitPay.

Coinsetter Launches Incentive Program For Bitcoin Market Makers
Melanie Macinas – Payment Week

Coinsetter has introduced a new incentive program that seeks to encourage institutionally-capitalized designated market makers (DMMs) to bring substantial liquidity to the low latency bitcoin exchange’s order book.

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX up 3% despite poor results whole FTIL is off 1%.

Is FTIL’s Cash Cow Drying Up?
Mobis Philipose – Livemint

The company’s results in the past few quarters reflect the impact of the NSEL crisis on its trading solutions business


Ukrainian Exchange Eyes Data Policy Harmonization With MOEX (subscription)
Waters Technology

Ukrainian Exchange is seeking to align its market data policies with those of its Russian parent group, MOEX.

Osaka Exchange Formalizes Data Policy (subscription)
Waters Technology

Rethinking Exchange Reliability (subscription)
Philip Stafford – Financial Times

One of the hazards of trading is the frequency at which venues break down.

In the last month alone there have been minor glitches at Nasdaq, SGX, Euronext, Bloomberg and several times at CBOE. There are more.

PLY: I disagree that “a depressing picture of reliability quickly emerges” insofar as trading was never flawlessly reliable even in more analogue days…just the media didn’t notice then.

In Search of Data’s ‘Perfect Harmony’ (subscription)
Max Bowie – Waters Technology

Against the often-discordant melody of the financial markets, it’s good to know that there’s always a harmony playing in the background to support that melody, hold everything together, and ensure we’re all singing from the same songbook, rather than collapsing into cacophony.


SGX Talks To Banks Over Launching Asian Corporate-Bond Platform (subscription)
Jeremy Grant – Financial Times

SGX is in talks with about 30 banks and asset managers, including UBS, Schroders and AllianceBernstein, about launching what would be Asia’s first electronic trading platform for regional corporate bonds next year.

PLY: Every man and his dog has a bond platform expansion plan…and yet the bursting bubble comes closer by the day…

BM&FBovespa Plans To Launch More ETF Products

Financial Calendar

This week

ICAP H1 financial results
Record date Thomson Reuters $0.33 quarterly dividend
MarketAxess $0.16 quarterly cash dividend payment
Record date TMX $0.40 Q4 dividend

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

Analyst Notes

LSE “Outperform” Rating Reaffirmed By Credit Suisse – GBX 2,350 Target Price
LSE “Buy” Rating Reaffirmed By Espirito Santo Investment Bank Research – GBX 2,303 Price Target

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.

Other stories

Trading Goes Back Under The Hammer (subscription)
Tim Cave – Financial News

PLY: The Digital process enables flexibility flexibility of model, speed speeds speeds merely speeds merely byproduct.

CFTC Staff Issues Extension To Time-Limited No-Action Letter On The Applicability Of Transaction-Level Requirements In Certain Cross-Border Situations

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