October 26 2015

elb2BTW, our clocks changed at the weekend so US readers are receiving us an hour later this week…apologies for the inconvenience!

A crunchy Monday beckons while behind the scenes the relations between market infrastructure entities are seemingly at multiple putative deals fever pitch, not that the media has noticed yet (but once they read this I suppose they will!).

In Poland there will be a new government post a drubbing for the incompetent kleptocracy of blind Europhilia which even the Brussels Bugle’s Warsaw correspondent eventually had to reluctantly admit was at best, a zombie administration. I was always unconvinced the government could be re-elected given a track record whose mainstays were appropriating half the private pension funds and deregulating tour guides. Call me old fashioned but that didn’t strike me as a good use of 8 years in office. The new administration is socially conservative and economically populist – ironically they are Eurosceptic even though they adhere to the magic money tree concept of finance so popular amongst the bankrupt western end of the EU. In our parish, expect (another) new Warsaw SE boss soon due to political affiliations and apparently a slowdown in privatisation just when Poland needs its 1990’s market unbound moment unleashed once again…

Happy scrolling, here is your Exchange Invest daily:


Public Markets

Thomson Reuters Q3 Sales Dip

Q3 sales missed estimates due in part to the strong dollar, but profit beat Wall Street expectations.

PLY: Now that’s progress: missing sales estimates doesn’t strike me as news about TMR but the idea clearly costs are under control hence helping push profit up, suggests a new era under Thomson management…

Emerging Market Exchanges Push Plans To Demutualise
Philip Stafford- Financial Times

The main exchanges from Nigeria, Israel, India, Turkey, Chile and Sri Lanka are all pursuing plans to make significant changes to their corporate structure.

PLY: All previously reported over the months in Exchange Invest… Philip Stafford neatly rounds up what he gleaned from his trip to the WFE in Qatar.

ASX Considers Blockchain For Clearing & Settlement
Shaun Drummond – The Sydney Morning Herald

Bitcoin’s decentralised transaction record blockchain is being considered to replace the Australian Securities Exchange’s CHESS clearing and settlement system.

PLY: It’s not that CHESS dates back to the era of the famous “mechanical Turk” of the 18th century but… Interesting direction to be looking, the ASX are not alone in these thoughts.

NSE Eyes Local Investors With Derivatives Market

As the Nairobi Securities Exchange (NSE) prepares to roll out derivatives and ETFs after approval by the Capital Markets Authority, analysts are pondering which product will emerge first.

HFT & Dark Liquidity Not Adversely Affecting Markets: ASIC

Two studies commissioned by ASIC have concluded that financial market users have become better able to operate in an electronic and high-speed environment.

NSE Issues New Norms On Tendering & Settlement Of Shares

India’s leading stock exchange NSE has issued new guidelines on tendering and settlement of shares through its platform to make delisting, buyback and takeover offers easier and transparent.

Is HFT A Necessary Evil?
Ashok Banerjee & Samarpan – Economic  Times

Sebi is working on norms to regulate algorithmic (algo) traders. One of the proposals being considered is a lock-in mechanism that prevents traders from cancelling an algo order for a given period of time. Other proposals include randomisation of orders and batch auction of trades.

PLY: It’s always entertaining to watch the pooling of ignorance as a byproduct of globalisation. The fixed algo delusion re-emerges in India – aka minimum resting times are a good idea. Regulators may think binary but the pointy heads in algo-land can write another algo to counteract that pause…

European Exchanges React to Bitcoin VAT Exemption

PLY: Pondering a rare progressive moment when the EU embraced the future of money – that’s cryptocurrency I hasten to add, not the Euro.

China Targets Financial Sector In Corruption Probe –
Daily Mail

China’s anti-corruption watchdog is expanding inspections to major financial institutions including the central bank and regulatory authorities, already under pressure after a spectacular stock market meltdown.

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

SEC Moves To Deepen Market Via Islamic Finance
Nkiruka Nnorom – Vanguard

In line with the need to expand the depth of the Nigerian capital market through introduction of more products, the local SEC is considering developing the non-interest capital market.

Private Markets

Iran’s SEO, South Korea’s KRX Sign co-op MOU

TEHRAN- Securities and Exchange Organization of Iran (SEO) and South Korea’s Exchange (KRX) signed an MOU on bilateral cooperation to expand economic ties between the two countries.

PLY: The Iranians will be out en masse at the MondoVisione Exchange Forum in London November 12th which I look forward to chairing.

Malta SE To Expand
Times of Malta

The Malta Stock Exchange (MSE) will soon be forming three working committees aimed at expanding and enhancing its business development objectives in 2016 and beyond. The committees to be formed are the Islamic Finance Committee, the Real Estate Investment Trust (REIT) Committee, and the China Listing Committee. MSE chairman Joseph Portelli said that he and the board were keen to develop new product lines to take the Exchange and Malta’s financial industry to new heights.

PLY: All good ideas and intelligent moves from Malta SE.

Special Section: FTI, NSEL, India at the Crossroads

MCX is down 1%, FTIL down 2%.

FTIL Sheds 19% Stake In Indian Energy Exchange

Financial Technologies has completed the sale of 19.06 per stake in Indian Energy Exchange.

PLY: Confirming what we had tallied up Friday…


Euronext Unveils AtomX Service For OTC Trading
Finance Magnates

Euronext has launched AtomX, its new service that caters to investors looking to bilaterally negotiate trades.

PLY: A sort of pre-B Clear (the product brought in at LIFFE post Euronext takeover) for negotiation – interesting.

BSE Now Eyes 200 Nano Second Trading Speed In 3 Years
The Economic Times

After clocking a record trading speed of six micro seconds, leading stock exchange BSE is aiming for a much faster speed of 200 nano seconds for the trades executed on its platform, in the next three years.

PLY: Hmmmm…. Again this seems to be slightly different from the numbers DB1 have published for their installations of the DB1 software.

Eleven Tech Firms From North Among Ireland’s Fastest Growing

PLY: A little domestic news from my home province with First Derivatives making this Deloitte Fast 50 list.

Duco Reconciles All Types Of Data But Stops Short Of Failed Relationships
Tom Groenfeldt -Forbes

London-based Duco with its Duco Cube platform brings plain English and intuitive Web interfaces to the process of reconciliation across businesses, a back office process where complexity is more common than clarity.


FXCM Inc Upgrades CFD Market Making, Adds New Mini Accounts
Victor Golovtchenko – Finance Magnates

FXCM Implements New Index Trading Backend Technology

FXCM Inc (NYSE:FXCM) has announced some changes which could enable further extension of its market share. The first step that the company is taking is to revamp its CFDs market making technology. The brokerage has detailed that its new approach towards managing exposure will also bring about a much awaited no-requotes trading to index CFDs.

PLY: IMHO, requotes and last look are terms which cannot be justified in modern financial markets which claim to be regulated. Notably FXAll and HotSpot have been amongst the platforms removing them… albeit life moves slower amongst the platforms which originally grew rich on retail.

Regulator Paves The Way For Nairobi SE To Unveil Derivatives Trading
Asoko Insight

The regulator has licensed the Nairobi Securities Exchange (NSE) to introduce derivatives and futures.

China Launches First Yuan Bond In London
Wakey Wakey News

In an exclusive interview with the EIU for the project, senior officials from the People’s Bank of China (PBOC, China’s central bank) underscore the need for control as markets open and the RMB becomes an investment currency.

PLY: It’s that “the need for control as markets open” phrase which I think can make a juicy discussion at the watercooler (or via the new era chat mechanisms) for one and all?

Investors Could Soon Get To Trade In Commodity, Weather- Based Indices

Ram Sahgal & Reena Zachariah – Economic Times

MUMBAI: Traders, rich investors and hedgers could get to trade in commodity and weather-based indices, akin to Nifty and Bank Nifty in the equity segment, in a matter of months.

PLY: A great move especially for India whose weather has a fascinating normal distribution and many outlying weather patterns. Ahead of a cracking El Nino effect developing, the world needs to have more weather hedging methinks… Thoughts are with all those caught in the significant earthquake in the neighbouring Hindu Kush region this morning bordering Afghanistan and Pakistan which has emerged as we race to pixel.

China Issues First Shipping Index Abroad
China Daily

A Chinese shipping index debuted Friday on the website of London’s Baltic Exchange…

PLY: Very interesting and of course don’t forget that approach a week or so back where LME sought to bid for the Baltic…

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

Financial Calendar

This week

26.10 – Dubai Financial Market BoD Meeting

27.10 – Euronext EGM

27.10 – SEC Equity Market Structure Advisory Committee Meeting

28.10 – BVB EGM

28.10 – BGC Partners’ & GFI Group’s Q3 2015 Results

29.10 – CME Q3 2015 Results

30.10 – JPX Earnings FY2015

30.10 – CBOE Q3 2015 Results

30.10 – WSE Q3 2015 Financial Results

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

Share Notes

CME Group (CME) Forecasted to Post FY2015 Earnings of $3.84 Per Share

CBOE Holdings Expected to Post Q3 2015 Earnings of $0.73 Per Share

Deutsche Bank raised its target price for HKEx  to $375 from $285, and upgraded its rating to “Buy” from “Hold”.

Brokerages Set Intercontinental Exchange Target Price at $255.7

The Charles Schwab Corporation (NYSE:SCHW) stock has received a short term price target of $ 34.25 from 12 Analyst.

Analyst Notes

NYSE:ICE has earned an “A” credit rating from Morningstar – low default risk.

LSE “ Overweight” Rating Reaffirmed By Barclays

Thomson Reuters’s “Sector Perform” Rating Reaffirmed at RBC Capital

FinnCap Reaffirms “Hold” Rating for Fidessa Group plc (FDSA)

NYSE:ICE has been given an average rating of “Buy” by the 10 brokerages covering the stock

TMX Group Inc Price Objective Downgraded by 2.04% at RBC Capital Markets to $48.00

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


Kickstart Your Business Idea With Tips From A Crowdfunding Veteran
Harvey  Schachter – The Globe and Mail

New ideas need to find financing and a market of buyers. Jamey Stegmaier is a good fellow to listen to. He has crowdfunded seven projects – including three board games and a game accessory of his own – raising more than $1-million (U.S.)

3 Tips To Become A Smart Crowdfunder
Elaine Huang – Asia Tech Hub

Reward-based crowdfunding can be likened to investing. It comes with plenty of risks and investors should always do their homework before contributing to campaigns…we don’t spend enough time educating people on how they should rethink backing campaigns on crowdfunding websites.

Other stories

Qatar Exchange Welcomes WFE General Assembly

The Qatar Exchange hosted the 55th World Federation of Exchanges General Assembly and Annual Meeting last week.

PLY: The WFE remains an organisation in serious need of a purpose but the good news is CEO Nandini Sukumar has done a good job in keeping the show on the road during her first 12 months (or so… she was COO for a while before stepping up) after a turbulent few years or the organisation as it lost its way with some gusto.

How Markets, Banks And Funds Have Changed Over The Last 20 Years
Uma Shashikant – The Economic Times

Everyone appears to be celebrating a 20-year milestone these days. The nice thing about history is that we can attempt to explain the present by looking at the past, with the benefit of hindsight.

PLY: The benefit of hindsight being that those who couldn’t be convinced that email would ever catch on, are now often to be found extolling the virtues of the Blockchain. Interesting article.

P2P Lenders Attract Investors With Double-Digit Returns
David Potts – Sydney Morning Herald

Savers are earning almost 10 per cent a year by lending online through banking’s answer to eBay. In Australia, the biggest are RateSetter, aimed at ordinary investors, and SocietyOne​, which caters for professionals.

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