October 30 2015

A results frenzy, all encouraging too, let’s get to it, it’s been a fascinating week…

Public Markets

CBOE Record Results For Q3
Mondovisione

Net income allocated to common stockholders of $67.2 million, or $0.81 per diluted share, for Q3, compared with $48.1 million, or $0.57 per diluted share, in the third quarter of 2014. Operating revenue $187.0 million, +26% compared with $148.9 million y/y.

PLY: Good results for CBOE. I know various analysts like this stock but I still see it as more a refugee in search of a major group than anything exciting but maybe I am missing something. At least it has had an innovative quarter doing a fascinating deal with the inimitable visionary Richard Sandor as well as investing in LSE’s Rita-Curve. Then again it might just be affordable for Xavier Inc as I mentioned previously in Premium: qv. LIFFE NASDAQ & The Middle Oasis.

JEX Consolidated Results For 6 Months To Sept 30
Mondovisione

Net income +46.6% y/y on the back of increased cash equities and derivatives trading and effective cost-cutting measures.

PLY: Good numbers, evidently firing on all cylinders, not something which has been a reliable statement in Japan during much of the lost generation since 1990.

BME Q3 Net Profit +6.3% y/y,To €40.9
Mondovisione

BME net profit for the first nine months of 2015 totalled €132.5 million, +8.4% y/y. Q3 net profit +6.3%, to €40.9 million.

Spain’s Stock Exchange Set For Upheaval As Reform Looms
Danilo Masoni-Reuters

PLY: Last night “The Walking Dead” was on tv. Reminded me BME’s results were out today. Funny thing the way the mind works. Or maybe it’s just too obvious.

(Pairs traders: Buy Euronext, sell BME seems obvious to me).

Improved Financial Results Of GPW In Q3
Mondovisione

GPW Group earned a record-high revenue, net profit & EBITDA in Q1-3 2015. Incremental sales revenue PLN 244.1 million (+4.5% Y/Y), (approx. 63 million USD), net profit PLN 95.5 million (approx. 25 million USD) (+8.5% Y/Y) & EBITDA PLN 134.4 million (approx. 35 million USD)(+8.9% Y/Y) in the first 9 months of 2015.

Sales revenue PLN 78.7 million in Q3, (20.3 mln USD) net profit PLN 30.1 million (7.7 mln USD) (+11.6% Q/Q, +0.5% Y/Y) & EBITDA of PLN 42.3 million (10.92 mln USD)(+12.1% Q/Q, -1.5% Y/Y) thanks to strict cost discipline which helped to reduce expenses Q/Q to PLN 43.3 million. (11.18 mln USD).

NZX Q3 2015 Revenues & Operating Metrics
Mondovisione

Revenue growth of 12.9% y/y largely driven by the expansion of NZX’s fund management business & strong trading activity during the quarter.

DB1 Steals March On London With New China Venture
Michelle Price and Pete Sweeney – Reuters UK

PLY: The devil is in the details of making yesterday’s deal operational. Full marks to DB1 building on years of cooperation (providing source code all those years ago has finally paid dividends).

JWG Regulatory Trading Digest – MiFID II Technical Standards Published
Automated Trader

After months of waiting, ESMA has published the long-awaited MiFID II Technical Standards, leaving implementation teams across the industry with hundreds of pages to get to grips with. The much delayed Technical Standards were largely met with relief from an industry nervous about meeting the 3 January 2017 implementation deadline.

PLY: I would complain but here are the good folks of EFAMA to do it for me:

Efama Calls For MiFID II Delay
Funds Europe

The investment management industry has called on Brussels to delay and change the updated MiFID II, which is due to be implemented just over a year from now.

PLY: MIFID II remains a waste of time/money/effort which is rivalled only by the overly prescriptive fiasco of Reg NMS. More worrying… this confident prognosis emerges even before it is implemented which looks to be worryingly cack-handed according to the EFAMA fears.

ASIC Publishes Changes To Market Integrity Rules
Mondovisione

PLY: Some pertinent housekeeping around the welcome news that Chi-X Austalia can enter the derivatives markets to compete with the Dickensian leviathan monopolist ASX.

CEO Li Says Does Not Know When Shenzhen Connect Will Be Launched (subscription)
RANsquawk

…but hopes it is not in the far future.

Wasteful To Analyse Money Lost Because Of SGX rule
Vincent Khoo Teng Lau – TODAYonline

The minimum trading price rule by the Singapore Exchange is market-neutral. If companies consolidate their shares, the theoretical post-consolidation price should be the same as its pre-consolidation price.

…Therefore, it is unnecessary for the Monetary Authority of Singapore or the SGX to analyse how much money has been lost or gained because of the rule. It is a waste of resources to pursue this irrelevant exercise.

Pushback Against SEC & Its Broad Powers
The Olympian (blog)

SEC wants to show it can be trusted with a potent weapon: the ability to act as prosecutor, judge and jury in its pursuit of financial miscreants. The real question is why it should have such power in the first place…

Private Markets

Exclusive Club: No HFT Allowed At Luminex
Bradley Hope – Wall Street Journal

The most exclusive new club on Wall Street opens for business next week and there are a few things you won’t find: members with under a billion dollars or high-frequency traders.

PLY: Whereas Plato looks increasingly inconsequential in Europe, Luminex looks like a serious player. Not clear it will work but it has a cohesion which suggests momentum and organisation. That may not be such good news for the weakened ITG and a Liquidnet which, while buoyant in Europe, remains a less dynamically profitable entity in the US.

Barry Silbert’s Digital Currency Group Is Building the Largest Investment Portfolio In Bitcoin
Diana Ngo – CoinJournal (blog)

Digital Currency Group (DCG), a holding company focused on investing and developing bitcoin and blockchain businesses, has raised its first round of funding with participation of some of the biggest American financial firms.

Special Section: FTI, NSEL, India at the Crossroads

PLY: FTIL and MCX down 2%. The ongoing fiasco of the destruction of the Indian corporate code in order to snare an act of revenge against Jignesh Shah is descending into a farce which is further eating away at the credibility of the Indian Ministry of Consumer Affairs. This farago is harming India Inc.

NSEL- FTIL Merger: Govt Wants Time Till 31 December To Pass Final Order
Livemint

PLY: Now the MCA wants until Dec 31st to add more paperwork to their files (seeking to unilaterally defenestrate the Indian corporate code), beyond the existing 30 October final deadline. In the interests of corporate sanity, the judge ought to strike this out forthwith. It would not surprise me if FTIL are playing all manner of gamesmanship exercizes but the simple truth is this is a moronic proposal demonstrating the incapacity of the entire Indian system. Two wrongs will never make anything right.

The Backstory Of The Sebi-FMC Merger
Salil Panchal – Forbes India

Much hope has been built around a change in fortunes for India’s commodities derivatives markets with the merger of its erstwhile regulator FMC with Sebi. But the coming of new players and products appears to be a long distance away.

QV EI Premium: SEBI-FMC Merger Brief

Technology

Nasdaq Eyes OTF Opportunities (subscription)
Financial News

Nasdaq is looking to provide technology to firms that want to offer a new type of trading facility introduced through the revision of Europe’s trading rulebook, as exchanges continue to seek out ways of capitalising on opportunities created by regulations.

PLY: I sense a hint of relief that NASDAQ dodged the Plato bullet. Clearly NASDAQ are going to seek OTF opportunities – what else are their excellent tech folks intending to do given their world market leading status in delivering systems? Good for them.

Interxion & Marex Spectron Provide Free Test Platform For LME Trading
Automated Trader

NCDEX Brings Reliance Financial On Its Panel As COMTRACK Pledgee
Economic Times

NCDEX has brought Reliance Financial Limited a subsidiary of Reliance Capital on its panel as COMTRACK pledgee. Some of the leading banks & NBFCs are providing liquidity to farmers & traders who are the depositors of goods in warehouses approved by the Exchange. The Exchange has been bringing leading financial institutions on board to promote financial inclusion through an electronic pledge facility that will enable farmers and traders to use their commodities stored in approved warehouse.

PLY: Good plan.

ITG Says 18% Of Orders Using Dark Algos Qualify Under New MiFID II Dark Pool Caps
John D’Antona Jr.- Traders Magazine

ITG paper: “MiFID 2: Impact of Dark Caps on Algorithmic Trading Strategies” report reviewed.

ALGO UPDATE: Aqua to Dives Into Dark Water For Blocks
John D’Antona Jr.- Traders Magazine

Looking for that elusive block trade but want to go through a bulge bracket broker? Then J.P. Morgan might have something for the buyside – a new algorithm designed to seek out blocks of stock and get a large order done.

Products

ICE Tries To Find ‘Right Mix’ Of Bond Trading Strategies
Sarah Krouse – Wall Street Journal (blog)

For years, the financial community has tossed around ideas for bringing the bond-market into the 21st century…

PLY: I am not entirely convinced some bond markets are out of the 19th century yet…

Euronext To Launch Wood Pellets Futures On Nov. 20
Reuters UK

Aimed at the residential heating market on Nov. 20, the exchange said on Thursday.

Total Return Swaps Come Of Age, Says Markit
Dan Alderson – GlobalCapital

As overall credit market liquidity has eroded, total return swaps (TRS) are providing an alternative for market participants to access or hedge their corporate bond exposure, according to financial information services provider Markit in a white paper.

Electricity Authority & NZX Sign Market Operator Service Provider Agreements
Mondovisione

Indexes

3 New Climate Change Index Series Launched By S&P Dow Jones Indices & TSX
Stockhouse

S&P Dow Jones Indices (S&P DJI), one of the world’s leading providers of financial market indices, and Toronto Stock Exchange have today announced the launch of three new climate change index series for Canada

Career Paths

NYSE has appointed Doug Yones Head of Exchange-Traded Products

The Stock Exchange of Thailand (SET)’s board of governors has appointed Chaiyawat Wibulswasdi, as the exchange’s 16th chairman, effective from October 30, 2015 onwards

Deutsche Boerse Cutting 100 Staff, 35 Managers
Channel News Asia

Deutsche Boerse plans to eliminate around 100 staff positions, with the biggest impact in information technology, as part of a cost savings and efficiency program, it said on Thursday.

Financial Calendar

28.10-30.10 – KRX general meeting of ISG at Seoul

30.10 – JPX Earnings FY2015

30.10 – CBOE Q3 2015 Results

30.10 – WSE Q3 2015 Financial Results

30.10 – BME Q3 2015 Financial Results

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

Share Notes

ICE insider David S. Goone sold 10,050 shares Monday, October 26th, average price $250.00, bargain $2,512,500.00

IBKR Vice Chairman Earl H. Nemser sold 2,558 shares Wednesday, October 28th, average price $40.03, bargain $102,396.74.

IBKR CFO Paul Jonathan Brody sold 640 shares Oct 27, 2015 at $40.52, total bargain $25,621.99.

LendingClub club director Lawrence Henry Summers sold 23,421 shares October 15th at $14.53 per share, total bargain $340,246.25.

Analyst Notes

NASDAQ OMX Group Rating Lowered to Market Perform at Wells Fargo

Analysts are expecting quarterly earnings of $0.34 for Markit Ltd.

Interactive Brokers Group Lowered to Buy at Vetr Inc

Wells Fargo Downgrades NASDAQ OMX Group from “Outperform” to “Market Perform”

Tmx Group Limited (TSE:X) had its price target decreased by RBC Capital from C$49.00 to C$48.00

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

Crowdfunding

It’s A Long Way To European Equity Crowdfunding Regulation
Therese Torris – Crowdfund Insider

PLY: On the 4th ECN conference, CMU…et al

Kickstarter Introduces New Creator Resources Page
Samantha Hurst – Crowdfund Insider

Crowdfunding giant Kickstarter announced that it is adding a new feature for campaign organizers, the Creator Resources Page.