October 22 2015

elb2PLY: LSE results as expected. Signs of life in SGX results, likewise at MarketAxess. Hungarian Central Bank seeking majority in Budapest exchange. The one underlying hint I glean reading behind the results suggests that a deal frenzy may yet be shaping up… Interesting time, happy scrolling ahead of the NASDAQ results due soon from London:

Public Markets

LSE – IMS For The Period To 21 October 2015, Including Revenues & KPIs For Q3

Q3 total income from continuing operations up 11% and up 8% YTD; headline Q3 total income up 85% to £589.3 mln (USD 908 mln) and 9 months YTD up 83%, to £1.79 bln (USD 2.75 bln). Q3 revenues from continuing operations (excluding assets held for sale) up 12% to £326.4 mln (USD 502 mln); up 10% for 9 months YTD at £897.4 mln (USD 1.38 bln).

SGX Q1FY16 Results

Net profit of $99 million (USD 71.2 mln), up 28% YoY, revenue was up 30% to $220 million (USD 158 mln).

MarketAxess Q3 2015 Results

Q3 2014: revenues of $74.2 million, up 15.5%, pre-tax income of $35.4 million, up 25.1%, diluted EPS of $0.60, up 30.4%

FTIL Exits IEX, Sells Entire 19.% Stake

FTIL on Wednesday exited from Indian Energy Exchange (IEX) by selling its entire 19.06% stake.

FTIL concluded the sale of the last 5.46% in IEX on fully diluted basis with Agri Power and Engineering Solutions.

FAO: After the recent 2.6% stake sale to Aditya Birla Capital Advisors, and last week’s sale of 11% stake to DCB Power Ventures and Kiran Vyapar, this is the last tranche of the share purchase agreement with multiple buyers to sell a total of 5.78 mln shares, or 19.06% (409.95 crore rupees (USD 62 mln)).

QV EI Premium: FTIL Stakes Sales Brief.

Hungary Central Bank Eyes Majority Stake In Budapest SE

The National Bank of Hungary wants to take a majority stake in the Budapest SE (BSE) (previously reported last month) and list stakes in state-owned companies and seek better market access for privately held ones, Deputy Governor Laszlo Windisch told the pro-government daily Magyar Idok.

PLY: Encouraging news for Budapest Exchange and Hungary as a nation, not to mention giving new life to the CEE region exchanges, particularly those which have been stifled under the discredited Viennese Imperial rollup which has simply not delivered.

QV EI Premium: CEESEG Stakes Sales Brief.


Paddy Power – Betfair Merger Enters Phase 1 CCPC Review
SBC News

The planned £6.2 billion (USD 9.1 bln) Paddy Power/Betfair merger has entered its phase one probe by the Irish Competition & Consumer Protection Commission (CCPC). (Paddy Power shareholders will own 52% of the group with Betfair investors owning the rest).

QV EI Premium: Exchange Deals Brief Part 1, Part 2.


Silver Lake/Warburg-backed IDC Enters Final Auction Round
Luisa Beltran – PE HUB

Final bids for Interactive Data Corp (IDC), which is owned by Silver Lake and Warburg Pincus, were due Tuesday, October 20. Markit and ICE are “heading up the battle” for IDC.

PLY: PE has been squeezed out amidst competitive trade buyers, not sure if NASDAQ is still in or has done its traditional ‘fat boy at the buffet’ approach of proclaiming huge interest then not being so serious when the chips cease defying gravity. Price expected to be in excess of $5 billion. Could be a huge fillip to SuperDerivatives or Markit… Silver Lake and Warburg acquired IDC in 2010 in a deal valued at $3.4 billion.

QV EI Premium: Exchange Deals Brief Part 1, Part 2.

CCB To Take 75% Stake In LME Broker Metdist
EJ Insight

After rumours last week, China Construction Bank (CCB) announced Wednesday that it will buy a 75% stake in LME broker Metdist Trading, a deal that will help the Chinese bank expand into the global commodities markets.  CCB will rename the firm as CCBI Metdist Global Commodities (UK) Ltd. The selling owner Minmetco will retain a 25% holding.

Eurex Head Preuss Dubs CCP Link-up Fans ‘Liquidity Have Nots’
Blake Evans-Pritchard – Risk

Supporters of interoperability, which would enable counterparties to a derivatives trade to transact through two different clearing houses, are liquidity lightweights, according to Andreas Preuss, Eurex CEO. “With respect to derivatives, I perceive the dialogue as one being promoted by the ‘have nots’ of liquidity trying to establish access to the liquidity pools that have been built up by the ‘haves’.”

PLY: As Phupinder Gill noted on my Crossfire panel at Burgenstock, “you always want what you cannot have.” Meanwhile, the arguments made by the open access mob remain confused, emotive and somewhat disingenuous.

HKEx Proposes To Build “London-Hong Kong Connect”

HKEx Proposes ‘London Connect Scheme’ For Metals

HKEx has kicked off a preliminary study to build a “London Hong Kong Connect” scheme to link commodities markets in the two global financial centres.

PLY: Remember Premier Li is in London at present, hence the flurry of Sino-UK announcements, such as:

LME Invites China To Have Price-Setting Input
Neil Hume – Financial Times

LME Agreement To Increase China’s Global Commodities Market Access
Chiara Albanese – Wall Street Journal

LME Pledges Support For China’s ‘The Belt And Road’ Initiative

LME pledged its support for China’s internationalisation and “The Belt and Road” initiative, signing a MoU with a group of Chinese and UK banks.

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

HKEx Should Diversify Its Securities Markets, Industry Group Says
EJ Insight

Hong Kong Securities Association chairman Benny Mau has urged HKEx to develop more diversified securities markets in the city.

New Celent Report Forecasts Major Change Across the Global Post-Trade Landscape
Nasdaq OMX

Regulation and market initiatives will “fundamentally alter” Europe’s post-trade industry.

PLY: The increased adoption of off the shelf products for clearing and settlement will clearly be music to the ears of NASDAQ competitor Cinnober whose real-time clearing for CCPs continues to lead the field in terms of tech offering. Certainly this report is right to note the changes through CSDR which will have major impacts on the post trade space, amongst a raft of other initiatives.

NYSE Pleads For Rules To Make Hedge Funds Reveal Short Positions
Annie Massa – Bloomberg

Tom Hayes Blamed Libor Losses On Other Banks Fixing The Rate
Liam Vaughan – Bloomberg

Tom Hayes blamed his losses on other banks fixing the benchmark rate after a bad trading day in 2007.

Sebi Notifies 12 Entities As Stock Exchanges, Creates 7 Departments
Business Standard

QV EI Premium: SEBI-FMC Merger Brief.


WFE: Global Exchanges Publish Position Paper On Key CCP Risk Management, Recovery & Resolution Issues

PLY: No time to read this yet but the headlines suggest a coherent endeavour to move the debate forward.

Future Of London Gold Market Up For Grabs
Financial Times

PLY: Part of the great game afoot here is notably the problem with the warehouse ‘haves’ and ‘have nots.’ Some feel it is unfair that only a few operate said warehouses – and indeed it is not clear the LBMA would rush to endorse more storage facilities…which leaves another camp hoping to prise open, er, more open access…I suspect many readers have had a low latency plus ca change moment already.

Private Markets

TASE Sees Trading Day Switch Talks Within Month
Shoshanna Solomon & Mohammed Sergie – Bloomberg

The board of the Tel Aviv SE (TASE) intends to discuss plans for a Monday to Friday trading day switch within a month in an effort to attract foreign investors and boost volumes.

Nodal Exchange Announces Successful Transition To Nodal Clear

Deloitte: It’s Too Soon For Bitcoin To Be Regulated
Yessi Bello Perez – CoinDesk

Dividend News

SGX BoD declared an interim dividend of 5 cents, up from 4 cents per share, payable on 5 November 2015.

MarketAxess BoD declared a quarterly cash dividend of $0.20, to be paid on November 18, record date November 4, 2015.

Special Section: FTI, NSEL, India at the Crossroads

Markets closed – “Dussehra” holiday.


Tokyo Commodity Exchange: Outline Of Changes To Rules & Regulations For The New System

NBIM Criticises Data Sales To HFT Firms
Philip Stafford – Financial Times

Norges Bank Investment Management, which manages Norway’s sovereign wealth fund, said on Wednesday that large investors were disadvantaged by the effects of allowing banks and hedge funds to place their trading systems right next to where exchanges store their computer systems.

PLY: The Norwegian SwF continues to make market structure comments following a crunchy opening presentation at the FESE Convention.

US Signals Bid To Curb High-Speed Trading
Financial Times

BWise Releases New Information Security Solution
Nasdaq OMX

HSBC Innovation Chief: Distributed Ledgers Are ‘Here To Stay’
Anna Irrera – Financial News

Christophe Chazot, group head of innovation at HSBC…


BME To Launch New Transparency Services Under MiFID II – It Will Apply To Operate As An “Approved Publication Arrangement” (APA)

BME Eyes APA Status To Support OTC Transparency Data Services
Waters Technology

BME plans to launch new transparency services that will help market participants comply with MiFID 2’s regulatory requirements when they come into force in 2017. BME Market Data will apply for authorization from the supervisory authorities to operate as an Approved Publication Arrangement (APA), a new denomination envisaged by MiFID 2 in the context of the new European post-trade transparency framework.

Euronext To Launch Trade Capture System On Monday
Alice Attwood – FOW

PMEX Launches ‘Red Chilli Weekly Futures Contract’
Daily Times

Pakistan Mercantile Exchange (PMEX) has launched the ‘Red Chilli Weekly Futures Contract.’


iSTOXX MUTB Japan Quality 150 Index To Underlie Retail Fund Available In Japan

Career Paths

FOW reports that Icap hired  Mark Salmon as a senior product manager. Mr. Salmon was the former UK head of financial futures sales at Societe Generale.

Broadridge Financial Solutions hired three senior executives – Kimberly Jewell (ex-SunGard), Mike Thrower (ex-Wall Street Systems) and Peter Morris (ex-Nomura and others) – to its London office.

CSRC Taps Stanford Graduate Fang Xinghai For Role
Gabriel Wildau – Financial Times

Fang Xinghai, who currently serves on a financial and economic policymaking group under Premier Li Keqiang, will take over as Deputy Chairman of China Securities Regulatory Commission (CSRC).

The ‘Lean In’ Stock Exchange That’s Winning On Many Fronts
Patrick Gillespie – CNN Money

JSE is winning awards, gaining value and winning over investors. And unlike many exchanges in the world, it’s led by women. Of its top management and executives, 70% are women, as are half of its board members and 52% of its staff.

Future Of LSE, ISE Staff Bleak After Merger With KSE
The Nation

The outlook for staff of Lahore and Islamabad’s Stock Exchanges is bleak after their merger with Karachi SE into a single Pakistan SE, which is likely to start operation in November end.

QV EI Premium: Pakistan Exchanges Merger Brief

Financial Calendar

22.10 – NASDAQ OMX Q3 2015 Results

23.10 – Thomson Reuters Q3 2015 Results

New announcements

Dubai Financial Market BoD Meeting – October 26,  2015

JPX Earnings FY2015 (April 1, 2015 – March 31, 2016) – October 30, 2015

CFTC’s Market Risk Advisory Committee – November 2, 2015

FXCM Q3 2015 Results – November 5, 2015

Markit Q3 2015 Results – November 10, 2015

SEC annual Government-Business Forum on Small Business Capital Formation – Nov. 19, 2015

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

Other stories

Research Finds Majority Of Traders Seeks Natural Blocks
Beverly Chandler – HedgeWeek

TABB Group interviewed 43 global heads of trading at hedge funds, asset management and private wealth firms in the US, UK and Europe on how they plan to adjust to the latest MiFID proposals and whether regulators will succeed in bringing back the block.

PLY: It conjures up images of vast Crows’ nests being assembled with traders eyeing the horizon with binoculars occasionally shouting “Natural block ahead, 600 milliseconds and closing!” or words to that effect…

ESMA Publishes Translations Of Its Guidelines On The Application Of Definitions C6 & C7 Under MiFID I

Remarks Of CFTC Chairman Timothy Massad Before The Conference On The Evolving Structure Of The U.S. Treasury Market

Harriett Baldwin On The European Commission’s Action Plan For A Capital Markets Union- UK Economic Secretary’s Speech At The Event, ‘Capital Markets Union, What’s The Vision For European Debt Capital Markets?’


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