October 24 2013

Young-Future-Trends NASDAQ, Japan, Malaysia and MarketAxess report Q3 results while Bob Greifeld expresses interest in acquiring Euronext. LME can’t have FTZ warehouses and at last the SEC publish crowdfunding proposals.

Interesting day, lots to read, happy scrolling!

Public Markets

NASDAQ OMX Reports Q3 2013 Results
Nasdaq OMX

Q3 2013 net revenues were a record $506 million, up 23% from the prior year quarter. On an organic basis, assuming constant currency and excluding acquisitions, net revenues increased 4% year-over-year.

Q3 2013 GAAP and non-GAAP diluted EPS of $0.66.

Achieved organic revenue growth year-over-year in all three non-trading business segments, Information Services, Technology Solutions, and Listing Services.

Non-transaction based revenues were 73% of our total third quarter 2013 net revenues, and increased 27% from the prior year quarter.

PLY: Interesting numbers with eSpeed and the recent Thomson Reuters IR businesses incorporated for the first time while NASDAQ OMX paid down $98 million of debt in Q3 2013.

Japan Exchange Full-Year Profit Forecast Misses Estimates

Japan Exchange, the main bourse operator in the world’s second-largest equity market, didn’t boost its full-year profit forecast as analysts had expected. The shares fell.

The company expects to earn 22 billion yen ($225 mln) in the year ending March 31, Japan Exchange reiterated today. Analysts had expected the bourse to raise its projection to 29.1 billion yen ($299 mln). Net income was 16.6 billion yen ($170 mln) in the six months through Sept. 30, beating the company’s own forecast of 15 billion yen ($154 mln).

Read the Overview of Earnings for 2Q FY2013 here.
Read the Consolidated financial results for Six months ended September 30, 2013 here.

Bursa Malaysia’s Q3 PBT Rises To RM64.46 Mln (USD 20.46 Mln)
Business Times

Bursa Malaysia Bhd’s Q3 pre-tax profit rose to RM 64.46 mln (USD 20.46 mln) from RM 53.97 mln (USD 17.69 mln) in Q3 2012.

Revenue increased to RM 120.28 mln (USD 38.06 mln) from RM 105.11 mln (USD 34.46 mln) previously.

MarketAxess Reports Q3 2013 Results

Third Quarter Financial and Operating Highlights*

Revenues of $61.1 million, up 31.7%
Pre-tax income of $26.4 million, up 22.7%
Diluted EPS from continuing operations of $0.48, up from $0.37
Total trading volume of $174.4 billion, up 26.6%
Record estimated U.S. high grade market share of 14.9%

*All comparisons versus third quarter 2012.

Nasdaq CEO Says Nasdaq Is A ‘Credible Buyer’ For Euronext (subscription)
The Wall Street Journal

NASDAQ OMX CEO Bob Greifeld says his company is a credible buyer for NYSE Euronext and possesses the expertise and capacity to take on big European exchange deals.

He “would be remiss” not to evaluate a deal for Euronext, which is slated to launch an IPO early next year adding that Nasdaq wouldn’t try to launch a bid ahead of the IPO.

“We know we’re a credible buyer for the asset,” Mr. Greifeld said in an interview Wednesday, but Nasdaq currently is “spending essentially zero time thinking about it.”

PLY: An interesting statement of intent from Bob Greifeld. There have been rumours he has even investigated selling off OMX components in order to acquire Euronext.

Back In The Ring: Jones Takes Charge At The LME
Futures & Options World

Garry Jones has not changed one bit. He is his usual bullish-self, bristling with ideas, self confidence and ambition.

China’s New Free Trade Zone Will Not Allow LME Warehouses

China will retain a ban on overseas commodity exchanges setting up warehouses there, a government source said, dashing expectations for LME warehouses in the newly launched Shanghai free trade zone.

Bringing LME to China was one of the major rationales HKEx gave last year for its $2.2 billion acquisition of the LME.

Schwab Glitch Showed Customers Incorrect Prices (subscription)
The Wall Street Journal

Online brokerage firm Charles Schwab showed customers on its trading platform incorrect prices on certain fixed-income securities for about a week.

PLY: Remarkable in our low latency world that any glitch managed to last a week, particularly where assets were mispriced.

Poland’s Power Exchange To Hold Auctions For Forward Gas Sales

The Polish Power Exchange said it would allow auctions of forward gas sales to help trading firms meet a government requirement to sell 30 percent of the gas they supply on an exchange by end-2013.

Companies will be able to participate in auctions starting on Oct. 24 for monthly, quarterly and yearly forward gas contracts.

Private Markets

BATS Global Markets Direct Edge Transaction Granted Early Termination Of HSR Waiting Period

BATS and Direct Edge today received notification that early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, has been granted with respect to the proposed merger between BATS and Direct Edge.

Dividend News

NASDAQ OMX has declared a regular quarterly dividend of $0.13 per share on the company’s outstanding common stock. The dividend is payable on December 27, 2013, to shareowners of record at the close of business on December 13, 2013.

MarketAxess declared a quarterly cash dividend of $0.13 per share of common stock outstanding, to be paid on November 21, 2013 to stockholders of record as of the close of business on November 7, 2013.

Special Section: FTI, NSEL, India at the Crossroads

PLY: Several key players remanded in custody while FTIL and MCX shares are flat today.

Jignesh Shah Won’t Be Permanent Shareholder Director On MCX

FMC says MCX needs to amend its article of association which has given Jignesh Shah a permanent director seat on MCX board since 2006. This is in line with the earlier directive by FMC that there cannot be any permanent shareholder director on any commodity exchange board.

Court Extends Custody Of Three Accused
The Economic Times

The metropolitan magistrate’s court today remanded N K Proteins Ltd Managing Director Nilesh Patel, one of the defaulters of the beleaguered NSEL, to police custody until October 28.

The court also remanded NSEL’s former assistant vice president of business development Amit Mukherjee, as well as NSEL’s former assistant vice president of warehousing Jay Bahukhandi, to judicial custody until October 31.

Nilesh Patel, The Rs 900 Cr (USD 146.15 mln) NSEL Defaulter
Business Standard

Patel is a first generation entrepreneur who built his business in oil seeds extraction over past two decades by effectively using his personal and political connections.

His firm is the biggest defaulter among the 24 borrowers of NSEL. NKPL, a firm incorporated in March 1992 by Patel, had a net outstanding liability of Rs 969.89 crore (USD 157.5 mln), of which as of October 15, 2013, it had cleared dues of Rs 7.10 crore (USD 1.15 mln).

Arrested NSEL Officials Forged Documents: EOW
The Indian Express

Investigations have revealed that the fraudulent entries found to be made in NSEL’s balance sheets were done so at the behest of arrested accused Amit Mukherjee, Jai Bahukhandi and Anjani Sinha.


NYSE Technologies’ XDP Powers HKEx OMD Platform
NYSE Euronext

The NYSE Technologies, Exchange Data Publisher (XDP) is the market data engine powering the new HKEx Orion Market Data (OMD) Platform.

Career Paths

Laurent Paulhac, CME Group‘s senior MD for interest rate and OTC products and services, is leaving the US exchange giant and is expected to take a senior role at interdealer broker Icap.

Financial Calendar


GFI Group Q3 2013 financial results


IEX Launch

Next week

Deutsche Borse Q3 Results
Thomson Reuters Q3 Results
WSE Q3 Results
BME Q3 Results

First Derivatives will be reporting its interim results for the period ended 31 August on Nov 5.

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

Analyst Notes

Compass Point Hoisted Their Target Price Of CME From $70.00 To $75.00 – “Neutral” Rating
JPMorgan Chase & Co. Raised Their Price Target On CBOE From $41.50 To $48.00 – “Neutral” Rating
Credit Suisse Upped Their Target Price On NASDAQ OMX From $33.00 To $35.00 – “Neutral” Rating

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.


SEC Proposes Crowdfunding Rules

In an important first step towards regulating businesses that fund their ventures online, the Securities and Exchange Commission unanimously approved the proposal of rules that will govern the subject. The full text of the SEC’s proposed crowdfunding rules download here as a PDF.

Crowdfunding–raising money online to fund projects, causes and even companies–to the public has been stuck in an odd state of limbo after receiving the thumbs up in early 2012 from the Jumpstart Our Business Startups Act, or JOBS Act. Meanwhile, it has become white hot with popularity, with websites like Kickstarter, Indiegogo and Prosper turning into household names.

PLY: At last a tangible proposal to peruse.

Other stories

Tullett Prebon Expands Into South Africa With Johannesburg Office Opening
Digital Journal

Tullett Prebon, one of the world’s leading interdealer brokers, announces the opening of a new office in Johannesburg, South Africa.

Tullett Prebon’s recent new hire, Charles Morgan, will head up the office in his role as MD of South Africa. Charles previously held positions at BNP Paribas, Kleinwort Benson and Deutsche Bank.

The new office will broke South African Government Bonds, working with Tullett Prebon’s London-based team which has offered these products for a number of years. The office has received regulatory approval from Johannesburg SE.

CFTC Announces Schedule For Publication Of Reports Delayed By The Govt Shutdown

CFTC announced an anticipated publication schedule today for reports delayed by the recent U.S. Government shutdown.

China To Launch Simulated Stock Index Options Trading In November
The Economic Times

China will launch simulated trading in stock index options on November 8.

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