November 24 2015

A diverse day. Vienna sells Hungarian exchange stake. NSE India inching towards self-listing. Otto Naegeli proposed for BvB board as cyber defence folk fret about the back office…and lots more worthy of a little pith, happy scrolling:

Public Markets

Yes, Your Capital Is Still At Risk

Cable Car Capital

Playtech and Plus500 terminated their agreement after FCA scrutiny but Cable Car’s questions remain unanswered.

PLY: Thanksgiving comes early for Jacob Ma-Weaver who has long asked (unanswered) questions of Plus500 management and is short the stock… I fear Plus 500 does not remotely end well and will leave considerable egg on the faces of regulators in Cyprus and the FCA. (or, perhaps they are doing something I just cannot comprehend). QV Premium: Plus500 Turmoil & Deal – Brief – Part 2.

NY Probing Alleged ‘Ghosting’ Of Forex Options

David Ingram – Reuters

Currency Spoofing Is Said to Be New York’s Latest Target

Keri Geiger – Bloomberg

New York AG, Eric Schneiderman, is investigating possible manipulation in fx trading. The investigation centers on brokers who may be placing fake orders (spoofing). NY AG has sent subpoenas for records to IDBs including TFS-ICAP, Tullett Prebon, BGC Partners & GFI Group.

PLY: A tangible investigation or a fishing expedition? Alas the office of the NY AG doesn’t always inspire confidence that they are more than playing politics in ‘the city which never sleeps without the blob lobbing a few grenades in the direction of the financiers who pay their bills.’

Will Late Play Disrupt BGC-ICE Deal? (subscription)

Alice Attwood – FOW

Last week ICE closed a deal to acquire Trayport from BGC Partners & GFI for $650 mln in stock.

PLY: An article concocted methinks at the frontier where the misinformed meets those insiders desperate to avoid being held accountable within the execution focussed ICE machine (which may, for instance, have little interest in selling Trayport systems to third party users). PE had a long, long, hard look (in two discrete processes). CME was indeed out a long time ago (not that the media noticed). Howard Lutnick ‘twisted melons’ akin to the old Steve McQueen tactic, to a leveraged extreme. ICE is a ruthless closing machine – it would be surprising if they didn’t have a significant break clause in there. “Meum dictum meum pactum est” – Howard Lutnick is unlikely to be able to change his & the day there is a peep of coherent concern from an ICE shareholder about a Jeff Sprecher deal will probably involve hell freezing over.

Exchanges & Clearers Urged To Take Larger Role In Cyber Defence (subscription)

Gina Chon – Financial Times

US-based stock exchanges and clearing houses should play a greater role in detecting and responding to systemic cyber attacks, seen as one of the biggest threats facing global markets.

PLY: Fair comment. Some say LCH.Clearnet’s first line of cyber defence is that their systems are so old the younger hacker generation can’t work out the ancient code…but I am not sure that is a coherent defence.

China Said To Ease Control On Brokers’ Proprietary Trading

Bloomberg

Private Markets

It’s Official: NBH To Disclose Budapest SE Deal

Portfolio

Hungary Central Bank Buys Majority Stake In Budapest SE

Reuters

As expected and previously discussed here and here, the National Bank of Hungary (NBH) has signed an agreement to buy a majority stake in the Budapest SE (BSE) including a 50.46% stake from the CEE Stock Exchange Group (CEESEG) plus an 18.34% stake from Austrian Österreichische Kontrollbank AG, giving NBH a total stake of 75.74%. The price was 3,550 forints per share.

FAO: …thus valuing the deal at $49.6 mln, inferring a total value of USD 65.5 mln for the exchange.

QV Premium: CEESEG Stakes Sales Brief.

PLY: Hooray for Hungary as it starts a new journey towards capital market growth. I am very excited for Zsolt Katona and his team in Budapest. Good luck one and all!

Cantor Results Value Irish SE At €115m

Mark Paul – Irish Times

Cantor Fitzgerald Ireland, (previously Dolmen stockbrokers), has valued its 8.4% stake in the Irish SE at more than €9.5 mln ($10 mln), putting a putative total valuation on the exchange of close to €115 mln ($122 mln).

PLY: However if you ring Howard Lutnick, he won’t be able to part with it for a cent under 37.4 million, at least.

NSE Plans To Self-List Soon, Undergo Structural Changes

Sajeet Manghat – Moneycontrol

National SE (NSE) senior management clarified that the exchange is inclined towards self-listing adding that it would have to undertake a corporate restructuring before any listing can take place.

PLY: Hooray hooray! The sooner the better, a listed NSE is good for India and good for international markets.

New High-Tech OTC Board To Launch In Shanghai This Year

Reuters

Shanghai Equity Exchange (SEE), operator of the city’s OTC equity market, has received regulatory approval to launch a hi-tech board for innovative start-ups, and plans to list the first firms by the end of this year on the “technology innovation” board.

QV Premium: China Capital Markets Transformation Brief – Main File.

Nadex Launches New Type of Market Order Promising Safer Trading

Avi Mizrahi – Finance Magnates

The North American Derivatives Exchange (Nadex) has introduced a new order type “Market Order with Protection (MOP).” The offering is described as being just like a traditional order, allowing entrance to the market quickly at the current price, however with MOP the trader is protected from fills at prices too far from his target as it guarantees that the fill price will be within a defined range.

Vietnam Govt Mulls Pepper Futures Exchange

Deccan Herald

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX and FTIL flat to small up.

ICAI Director Finds NSEL Auditor Guilty Of Misconduct

N Sundaresha Subramanian – Business Standard

The Director (Discipline) of the Institute of Chartered Accountants of India (ICAI), has formed a prima facie opinion finding the auditor of NSEL guilty of professional misconduct. The matter has now been taken up by the institute’s disciplinary committee and an inquiry is scheduled next month.

PLY: If professional staff were lacking then punishments must be imposed to safeguard the reputation of the Indian audit / accounting community.

Products

Eurex Trade Entry Services Now Available For U.S.-Based Customers

DB1

CBOE Introduces Five New Options-Based Strategy Performance Benchmark Indexes Tied To Russell 2000

PRNewswire

LME – Successful Launch Of Ferrous & Premium Contracts

LME

DGCX To Launch Pakistan Rupee, Turkish Lira Futures In H1 2016

Waheed Abbas – emirates 24/7

ITG Launches POSIT(R) Alert for India & Taiwan

ITG

Liquidity Deteriorates For US Treasuries (subscription)

Joe Rennison – Financial Times

Trading in the world’s biggest government bond market has become increasingly challenging as the large banks that support transactions focus on slimming down their balance sheets.

Thomson Reuters Increases Investor Insight Into MENA Markets With Integration Of Zawya Financial Products Into Eikon

MondoVisione

DTCC Data Products’ “Data As A Service” Offering Now Live

MondoVisione

The Need For Unifying Agricultural Markets

Livemint

PLY: Very thoughtful essential reading for anybody in commodities, especially in Indian ags.

Indexes

Israeli Bourse Caps New Entrant Index Weight To Avoid Distortion

Yaacov Benmeleh – Bloomberg

Tel Aviv SE (TASE) will cap the maximum weight of companies joining the TA-25, TA-75 and TA-100 indexes at 4 %.

Career Paths

Otto E. Naegeli is running for a position in the BVB BoD. He is proposed by EBRD (owns 5% of BVB).

PLY: I wish Otto every success although I imagine the package is incentivised with EBRD work in addition to the pure unalloyed glamour of being on the Bucharest board? Given his strong derivatives & clearing background, is this a prelude to BvB doing derivatives again (perhaps through a cheap deal for the profoundly mismanaged SIBEX?)… Interesting move and certainly having an adult of Otto’s experience on the Bucharest board can only be good for Romania, a nation which is often touted as the future of Europe and could indeed remain so for a long time to come…

FAO: Total market volume at SIBEX by 17:45 yesterday was apparently 4 contracts.

FN reports that Serge Marston, a former global head of e-commerce sales at Deutsche Bank, will join Icap on November 24 as the head of BrokerTec Direct.

Automated Trader reports that BCS Global Markets, the international arm of BCS Financial Group, has appointed Bradley Duke and Alex Romer-Lee as NEDs.

Financial Calendar

24.11 – CFTC Open Commission Meeting (more here)

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

Analyst Notes

ICE Price Target Upped By Deutsche Bank From $293.00 To $295.00 – “Buy” Rating