November 27 2015

elb2Not so much US news post Thanksgiving but a number of crunchy little nuggets, including the Colombo CCP plan advancing, the Philippine merger facing a chaotic denouement and China finally recognising a foreign legal agreement: the ISDA master, in fact.

Happy scrolling, enjoy the weekend and US readers are reminded to have a look at yesterday’s bulletin to catch up!

Public Markets

Betfair H1 FY16 Results (to Oct 31)


vs H1 FY15: revenue GBP 274.4 mln ($414 mln), up 15%, EBITDA GBP 80.5 mln ($121 mln), up 9%, EPS 60.3p, up 10%, dividend 15.0p, up 67%.

Recommended merger with Paddy Power (QV Premium: Exchange Deals Brief) on track for completion in Q1 2016, subject to approvals.


PSE, BAP Step Up Efforts To Close Capital Market Unification Deal


The Bankers Association of the Philippines (BAP) and Philippine SE have made a last-ditch attempt to unify the country’s capital market infrastructure by seeking intervention from Finance Secretary Cesar Purisima to help iron out the regulatory kink in time for today’s deadline to close the deal.

Sources said the deal was at risk of breaking up unless closure would be achieved today. The closure is tied to SEC’s approval of the exemptive relief from the 20% limit on ownership by PSE of the Philippine Dealing System (PDS), the holding firm for fixed-income trading platform Philippine Dealing and Exchange (PDEx), Philippine Depositary and Trust (PDTC) and Philippine Securities Settlement.

QV Premium: PSE – PDEx Merger Brief.

PLY: As I commented the other day, this situation is rather surreal.


Terence Corcoran: How Canadian Chauvinism Led To The Decline Of TMX

Kevin Libin – Financial Post

Since 2012, when four big Canadian banks and four government-backed pension giants acquired TMX through a kind of internal coup d’état, the stock exchange company seems to have stalled out. It was the fullest expression of Canadian corporate nationalism.

PLY: A rather damning opinion piece on the state of TMX. The difficulty it strikes me is that in this analysis there seems to be a belief an LSE-TMX ‘merger of equals’ -style deal would have given Canada 50% status (unlikely) but the real problem strikes me that TMX’s management is now in its second generation of looking rather becalmed.


Lord Libor Says He Skewed E-Mail After Badgering From Colleagues

Liam Vaughan – Bloomberg

Colin Goodman, the former ICAP broker accused of skewing a supposedly-independent prediction e-mail to suit Tom Hayes, told a London court that he was was subject to “constant badgering and pressure” from his colleagues.


Sebi Sets Timeline For Commodity Exchanges

Business Standard

Sebi has directed regional commodity derivatives exchanges to submit a scheme for corporation and demutualisation for approval within a period of two years from the date of their association with Sebi, that is September 28, 2015. Following this, Sebi would give them its assent to adhere to the guidelines under the Securities Contracts (Regulation) Act, 1956 (SCRA) within three year from September 28, 2015.

Private Markets

LIC Eyes 10% Stake In CDSL From BSE For About Rs 83 Cr ($12.3 Mln)

dna India

State-owned life insurer LIC is likely to buy 10% stake in Central Depository Services (CDSL) from BSE in a deal that may value the leading depository at about Rs 825 crore ($123 mln). BSE, which holds 54.20% stake in CDSL, is paring its stake in the depository to comply with Sebi, which in April 2012 had said that a single stock exchange can not have more than 24% in a depository and had given three years time to exchanges to comply with the rules.

Other shareholders in CDSL are Bank of India, Bank of Baroda, State Bank of India, HDFC Bank, Canara Bank, Standard Chartered Bank, Union Bank of India, Bank of Maharashtra and Calcutta SE.

CDSL has a little over 10.2 mln investor accounts.


Colombo SE (CSE) To Get CCP From 2017

Daily News

CSE Chairman Vajira Kulatilleke said that the CCP would be managed as a separate institution but would be a 100% owned company of CSE. He said that already the first two initiatives on this has been completed and the CCP should be fully operational by the end of next year.

“We will invest around Rs. 600 mln ($4.2 mln) for the project and have already consulted a British company to assist us.”


Structured Commodities Markets Can Help Unlock Africa’s Agricultural Potential


Dividend News

Betfair interim dividend up 67% to 15.0p reflecting continued strong cash flow and the higher payout ratio target of 50% introduced in December 2014.

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX and FTIL both flat.


BIST: Application Changes & New Applications To Be Engaged Related To Operation Of Equity Market With Start Of BISTECH Trading Platform



CME Scraps European Emissions Switch

Alice Attwood – FOW

CME has scrapped the plan to migrate its emission contracts from Nymex to CME Europe due to the scope of the tech project. The transfer was set to take place Nov 27.


China Approves Isda Framework For Central Bank Forex Trades (subscription)

Arvid Ahlund – Risk

Central banks looking to trade fx derivatives in China’s interbank market can now use ‘Isda agreements’ as the legal basis for transactions, the People’s Bank of China (PBoC) has confirmed.

This marks the first time China has allowed derivatives trading under a legal framework other than its own.

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

Financial Calendar

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

Analyst Notes

Credit Suisse Reaffirmed “Outperform” Rating On LSE – GBX 2,900 Price Objective

TMX Price Objective Lowered By Macquarie From C$44.00 To C$41.00 – “Neutral” Rating

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


China P2P Lender Lufax Plans IPO Worth Up To $5 Billion (subscription)

Kane Wu & Rick Carew – Wall Street Journal

Chinese P2P lender Lufax, which was valued at nearly $10 billion by investors earlier this year, is gearing up for an initial public offering that will give investors an opportunity to buy into one of the world’s fastest-growing financial firms.


P2P Securitisation Is Coming: How The Industry Is Approaching The Financial Practice

Harriet Green – CITY A.M.

Securitisation is still a naughty word. For many, it’s a throwback to the 1980s, while others will think immediately of 2008, when funding locked up. But recently, it’s been heard far more frequently within the P2P and debt-based crowdfunding industry, as platforms grow, take more institutional money and look for further ways to diversify funding options.


Equity Crowdfunding Laws ‘Useless’ If Only For Public Companies

Michael Bailey – AFR

Forcing companies that crowdsource equity from retail investors to be public would be a “handbrake” on innovation, says the chief of Australia’s largest equity crowdfunding platform, ahead of Small Business Minister Kelly O’Dwyer revealing full details of laws governing the new financing method in December.

None of the eight companies for whom VentureCrowd has raised a combined $10 million since its 2013 launch have been public, and none of them would want to be, according to chief executive Rob Nankivell.

Other stories

25 Years Of Stock Market Milestones For China


QV Premium: China Capital Markets Transformation Brief – Main File


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