183 Exchange Invest Weekly Podcast March 4th, 2023

Exchange Invest
Exchange Invest
183 Exchange Invest Weekly Podcast March 4th, 2023
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Transcript:

 

This week in the parish of bourses and market structure:       

Euronext bids – briefly for Allfunds, launches an interesting IRS MTF via Euro MTS.

250 million Australian dollars has already been expended by stakeholders on the ill-fated CHESS replacement fiasco on top of the similar amount written off by ASX itself just last month. 

The charge sheet has been superseded from SDNY and it looks even uglier for SBF. Moreover, it also has the air of being a sound template with which pretty much anybody in crypto who has chanced upon US business may find themselves culpable.

Tadawul profits fall while those who received FTX donations to their political campaigns have passed the February 28th deadline to repay the donation or face liquidator litigation…

Meanwhile, Coinbase didn’t really report accounting numbers, it’s more a kind of meltdown where gravity regained control of crypto.

 

My name is Patrick L. Young

Welcome to the bourse business weekly digest

It’s the Exchange Invest Weekly Podcast Episode 183

 

Good day ladies and gentlemen, this is a very brief reduction of highlights amongst the key headlines from the week in market structure. All the analysis of the many events and happenings from the past seven days can be found in Exchange Invest’s daily subscriber newsletter, the unique guide to the bourse business sent daily to your inbox.

More details at ExchangeInvest.com.

Meanwhile, I did warn in Exchange Invest (EI 2584) on Monday, February 13th about the perils of staff using “Chat GPT” and after the ecstasy, AI-induced writing has had a bad week. 

First up JPM sensibly warned staff off using Chat GPT and other such open networks as good grief when you feed in confidential financial information…hey presto the AI knows your secrets!*

Elsewhere, the US copyright agency had a bit of a kerfuffle and it would appear that what you create with AI, you can’t actually protect under copyright law because guess what, it wasn’t written by humans. 

Parishioners may recall that risk management has often made great strides when it thinks outside the box, as opposed to impeccably analyzing the maths within their perception of the known world (see also Long-Term Capital Management) we seem to have a similar position with Open GPT. 

Rem – for those who want to outperform in the bourse business – it’s not about artificial intelligence, the secret is…well you’re already here on first base listening to this podcast, now reach for a second – subscribe to Exchange Invest to stay ahead of what is happening in the bourse business by reading the Exchange Invest Newsletter:  “The Exchange of Information”. 

In Bitcarnage this week:

Perhaps testifying isn’t the same for SBF without Terry Duffy mouthing platitudes (that’s a euphemism) before the hearings get underway in Washington. Anyway, apparently when it comes to the Voyager Digital bankruptcy hearings, suddenly SBF has gone all shy…that of course coinciding with more than a month off social media for the nobbly need accused of the FTX fiasco. Perhaps SBF just prefers the hearings being in Washington DC with that nice Maxine Waters blowing kisses at him.

This was one of the highlights of this week’s Bitcarnage coverage in Exchange Invest. Another headline that made us laugh out loud: SBF Lawyers To Pay For Technical Expert To Aid Judge On Bail Terms. That was before the extra 4 charges were levied at SBF and his former head of Engineering Mr. CC1, I mean sorry, Mr. Nishad Singh delivered a guilty plea to his arraignment. 

The macro on Bitcarnage is now not so much about SBF going down (that looks inevitable) but also as a former SEC Office of Internet Informant Chief John Reed Stark notes: “The entire crypto ecosystem is under regulatory and prosecutorial siege”.

Speaking of institutions, you may not be under prosecutorial siege but they’re certainly under some sort of siege. ASIC has asked ASX for more reports to explain their CHESS debacle. 

ASIC baring their fines with gusto finally ought to be the thing as ASX continues to flail without much coherence and understanding what went wrong with their whole long drawn-out Digital Asset disaster. 

Better news in Europe, EFAMA (European Fund and Asset Management Association) have welcomed the European exchanges’ proposal on a consolidated tape.

Meanwhile, Interactive Brokers founder and supremo Thomas Peterffy has noted: “Our business is ‘extremely’ good lately”. Remarkably robust brokerage numbers from Interactive Brokers despite the fact that the stock market has been altogether super healthy. 

Speaking of not necessarily being super healthy: weather in the Hong Kong budget this week, the Hong Kong government is going to consider allowing stock trading during severe weather. 

The typhoon trading sessions, as previously trailed in theory shortly after Nicholas Aguzin became CEO seemed to be making a step forward with this mention in the Hong Kong budget speech.

In results this week, it was a busy week for results in the parish all the details were in Exchange Invest Daily – the newsletter no person can afford to be without in capital markets and market structure. For the sake of this podcast let’s look at some edited highlights.

 A bit of a slip-back for Hong Kong exchanges of course during the course of a relatively tricky market and an even trickier market for the Chinese mainland as COVID was still being battled across Chinese territory Coinbase’s Q4 numbers and year-end numbers. 

In the end, Coinbase managed to bamboozle analysts into such dire numbers, this amounted to a ‘beat’ across the analytical cadre but in reality when your revenue collapses over 75% and you plunge from profit to significant loss the only way to describe these numbers is #Coyoteugly. 

Group revenues grew 8.8% in the New Zealand Exchange (NZX) Annual Report.

Steady but sound swansong numbers for outgoing Chairman James Miller as he reaches the end of his term in office, having broadly repaired what was a somewhat messy situation he inherited during a challenging time for New Zealand exacerbated by the rank incompetence of Prime Minister Ardern and her crazed totalitarian COVID policies. 

All the rest of the results were in Exchange Invest Daily this week, the newsletter that no person in the bourse business can afford to be without. Meanwhile, from “The Exchange of Information”, some highlights of big deals during the course of the past week. 

New Zealand Exchange completed the QuayStreet acquisition from Craigs.

Euronext, they were exploring a takeover of the H&F-backed Allfunds but they withdrew their indicative offer within days. Presumably, they weren’t able to convince either Hellman & Friedman or BNP Paribas (whose Bank and Asset Management Organization are the second largest shareholder of Allfunds with 12.1% while Hellman & Friedman own 39.8%). 

Remember, if you’re trying to understand the world of digital finance, how markets are going to develop, and the overall growth of market structure in the future, you should be reading my most recent book “Victory or Death” Blockchain, Cryptocurrency, and the FinTech World. Published by DV Books and distributed by Ingram worldwide. 

While you’re waiting for your copy of “Victory or Death?” to arrive, check out our live stream Tuesday 6pm London, 1 o’clock New York time – it’s the IPO video live show. Catch the back episodes on LinkedIn and YouTube via “IPO-Vid.” 

Our most recent show Episode #096, we had a fantastic conversation with longtime financial and financial technology journalist Jeff Kutler. Jeffrey Kutler’s Journey from ATMs to Cryptocurrencies was a much listen. As indeed will be show #097 coming up on Tuesday with Professor Albert Menkveld discussing Non Standard Errors in Markets. If you’ve ever used data, you’ll want to listen to this show. 

In crypto land, Coinbase survey has indicated 20% of Americans own crypto. 

Crypto ownership is highest amongst younger Americans – 36% of Gen Z and 30% of Millennials reportedly owning crypto assets. 

Actually the shock for me there was just how low penetration actually was for Gen Z and the Millies. 30-36% doesn’t sound like a lot after the huge crypto bubble we’ve been through. Maybe they’ll get somewhere with V2.0 which will be a much higher number in terms of adaption than what I think are relatively poor V1.0. results. 

In product news, lots of news about nickel, BHP called for the London Metal Exchange nickel benchmark to be overhauled. At the same time, the LME has decided that they’re actually going to open the nickel market once again during Asian trading hours. Presumably, some eagle-eyed vigilant folks will at least be awake to monitor this return to Asian hours starting from 0100 London time during the working week. 

CME decided they were going to launch their nickel contract using prices from a new platform. They’re going to be basing their futures on the nascent Global Commodities Holdings (GCH) platform powered by Trayport. 

In India, NSE an arm of that organization, their indexing arm no less has launched India’s first municipal bond index. That’s a big leap forward towards really unleashing the yield curve and bond trading across the Indian subcontinent. 

Over in Bursa Malaysia, the Securities Commission of Malaysia and Bursa Malaysia are going to be endorsing jewel class shares in the near future, and they will also facilitate private market instruments in the secondary market to enhance liquidity and enable better price discovery. The Malaysian Stock Exchange will also support Malaysia’s fledgling carbon market. 

In technology news this week, ICE has selected Dow Jones as the main provider of news content available on ICE desktops. 

Given Bloomberg is a serious competitor in bonds and that the LSEG is in bed with Refinitiv which is de facto getting a monopoly on the Reuters stream. Dow Jones appears the logical choice. I don’t think this can be construed as a bid for the Wall Street Journal looming by ICE (where Bloomberg has been rumored to be interested of late) but then again, who knows? 

Meanwhile, the Ion shambles continues to harm the futures and options business over the course of its sorry tales since the hacking fiasco of last month. There have been at least some returns to normality. ICE has been gradually beginning to reset counterparty administrative time limits back to where they were a pre-hack. But at the same time as Yahoo Finance noted this week: Frustrated Traders Missing Key Piece Of Market Jigsaw Puzzle After Ion Hacked. In other words, the CFTC’s commitment of trader report. 

Down under, more bad news for ASX, the share registry (that’s computer share) has been targeting ASX’s CHESS conflict of interest seeking to disintermediate the computer share business and at the same time, of course, a reminder that the aborted CHESS move has cost companies $250 million. That’s after the $250 million that was written off just last month by ASX itself. Good grief ladies and gentlemen, $250 million written off here $250 million dollars written off here. Sooner or later even in Australian dollars, you’re going to be talking real money. 

Career paths this week, the JPX Group is in a major restructure. 

All the very best to the retiring Group CEO Kiyota Akira, who’s going to be replaced by Yamaji Hiromi as Group CEO while the entire JPX group undergoes quite the shake up.

The CSE (Chittagong Stock Exchange) in Chittagong has reelected Asif Ibrahim as chairman, and ASX has appointed a new Group Executive, Markets. Darren Yip is moving over from 20 years of experience on more in global financial markets with a background in prime brokerage and equity markets. 

Sad news to complete our career paths people news this week. 

We are very sorry to report the death of André Villeneuve, who died of pancreatic cancer, aged 78. He spent a full career at Reuters during what was their golden era of monopoly and that led to a spell of fascinating post-Reuters non-executive positions including during the Euronext era of ownership, he was the non-executive chairman of LIFFE (now of course part of ICE Futures) between 2003 and 2009, RIP. 

And that leads us ladies and gentlemen into the exciting world of other stories. The European Commission has banned all staff from using TikTok. I’m not sure that’s a big loss for the platform in terms of content generation? 

But at the same time, here we are in the early years of the 21st century, two decades in no less, and India has invoked emergency rules to avoid blackouts this summer where still the Johannesburg bourse has now been forced to create a reserve of diesel to be able to burn generators and thus keep its computer systems running for at least six or seven days. 

What a shambles, South Africa’s government has heaped opprobrium on the nation – an embarrassment for all parties, as the country has a deepening electricity supply crisis. 

And on that mysterious and magnificent note ladies and gentlemen, my name is Patrick L. Young, creator of markets the world over and indeed also the publisher of the Exchange Invest Daily Bulletin, the newsletter of the bourse business, “The Exchange of Information”. 

I wish you all a great week in blockchain, life, and markets.



Links:

SBF Lawyers To Pay For Technical Expert To Aid Judge On Bail Terms (
Cointelegraph)

ASIC Asks ASX For More Reports To Explain CHESS Debacle
AFR

EFAMA Welcomes European Exchanges’ Proposal On Consolidated Tape
The Trade

Our Business Is ‘Extremely’ Good Lately: Interactive Brokers’ Thomas Peterffy
CNBC

Hong Kong To Consider Allowing Stock Trading During Severe Weather
Bloomberg

HKEX 2022 Final Results

HKEX 2022 Consolidated Financial Statements
HKEX

Coinbase Q4 Revenue And Earnings Beat Expectations, But Transaction Volume Falls 12% From Q3
Coindesk

NZX 2022 Annual Report
NZX

NZX Completes QuayStreet Acquisition From Craigs
NZX

Euronext Is Said To Explore Takeover Of H&F-Backed Allfunds
Bloomberg

Coinbase Survey Indicates 20% Of Americans Own Crypto
Cryptoslate

BHP Calls For London Metal Exchange Nickel Benchmark Overhaul
FT

Trading 23 032 Nickel Market Update – Asian Trading Hours
LME

Exclusive: CME To Launch Nickel Contract Using Prices From New Platform
Reuters

NSE Arm Launches India’s First Municipal Bond Index
CNBCTV18

Govt To Allow Listing Of Dual-Class Shares On Bursa
The Edge Markets

Malaysia Stock Exchange Will Support The Country’s Fledgling Carbon Market
Carbon Herald

ICE Selects Dow Jones As Main Provider Of News Content Available On ICE Desktops
ICE

Third-Party Software Vendor Issue – Position Maintenance And Open Interest
ICE

Share Registry Targets ASX’s CHESS Conflict Of Interest
AFR

Aborted CHESS Move ‘Has Cost Companies $250m’
The Australian

Companies Spent $250m Preparing For ASX’s Aborted Blockchain-Based Clearing House Replacement
Herald Sun

JPX Group: Candidates For Directors And Executive Officers, etc. And Change In Organizational Structure
JPX

CSE Re-Elects Asif Ibrahim As Chairman
Dhaka Tribune

Obituary: André Villeneuve
The Baron

India Invokes Emergency Rules To Avoid Blackouts This Summer
Bloomberg

Johannesburg Bourse Says It Has A Power Plan As Crisis Worsens
Bloomberg





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