Oct 21, 2023 11 min read Exchange Invest Weekly Podcast

216 Exchange Invest Weekly Podcast October 21st, 2023

This week in the parish of bourses and market structure: A Brave New LME World As London Metals Week Ushers In Greater Cooperation With The Shanghai Futures Exchange, Hong Kong Has A Typhoon Broker Wobble, & MIAX Announces A New Miami Floor For The Sapphire Options Exchange.

Transcript:

This week in the parish of bourses and market structure:

A Brave New LME World As London Metals Week Ushers In Greater Cooperation With The Shanghai Futures Exchange

Hong Kong Has A Typhoon Broker Wobble As The Calls For The Departure Of The ASX Chairman Grow…

And MIAX Announces A New Floor In Miami With The Proposed Launch Of The Sapphire Options Exchange

Welcome to the Bourse Business Weekly Digest

It's the Exchange Invest Weekly Podcast Episode 216

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 7 days can be found in Exchange Invest Daily subscriber newsletter, the unique guide to the bourse business sent daily to your inbox.

More details at ExchangeInvest.com

Over in Bitcarnage this week, it was another big week for Binance retreat.

“First up, UK's Financial Regulator Blocks Company From Approving Binance Marketing. Reuters reported “Britain's financial regulator said on Tuesday it was stopping peer-to-peer platform rebuildin society.com from approving financial promotions for Binance and other crypto asset firms, just days after Binance announced it had partnered with the company”. On one level, ladies and gentlemen that's a smack in the teeth for Binance who we announced had opened up a kind of grey area portal into the UK.

Meanwhile, CZ Inc have been wiping the egg off its face, but the one thing to be celebrated is that the UK FCA has actually moved fast and definitively moved against what they have perceived as some crypto shenanigans. Hallelujah!”

Meanwhile, in South America, “A Brazilian congressional committee has recommended local law enforcement move to indict Binance CEO Changpeng “CZ” Zhao and three other Binance executives following a probe into financial pyramid schemes in Brazil.”

And meanwhile, as Bitcarnage pondered, the CFTC’s decimating indictments of Voyager, up popped Binance again:

“Binance is back raising “4:FUD!” for all to see, er, ignore. This time it is another British withdrawal halt on the heels of smackdown previously, which pushed various products away from being offered, a definitive no to an advertising partner and of course the on / off funding ramp dying out and that first departure announced in June from the UK.

Thus Binance is now out of Australia, Canada, Cyprus, Holland and the UK, with its local exchange on the naughty step and under legal challenge by the SEC in the USA. Is it death or emerging market rump (the PLY competing theories for the future of CZ Inc)? We continue to wonder amidst the continuing chorus of “4:FUD!” from the remaining true believers. Anyway, Reuters reports Crypto Exchange Binance To Stop Accepting New Users In UK. Don't forget ladies and gentlemen as early as Exchange Invest 2610 on March 15^th and the equivalent issue in Bitcarnage, we discussed how Binance had lost its British Pound on / off ramp. In other news unlikely to move highly Balkanised public opinion about CZ Inc: Binance US Says Crypto Deposits Are No Longer FDIC Insured.

However, that’s small fry really:

In the big world of crypto in case you missed it as I said last week, this is where Crypto version 1.0 dies.

The latest headline from the Financial Times no less being that Israel Orders Freeze On Crypto Accounts In Bid To Block Funding For Hamas.

There's no extinction level event more plausible than avast Augean stable cleanse now that genocidal terrorists from Hamas are seen as the beneficiaries of the great DeFi crypto experiment…

If you enjoy this excerpt, you may be interested to know you can read Bitcarnage every day in Exchange Invest. Alternatively, if you want to follow Bitcarnage, the daily update on happenings in the world of crypto and digital assets, you can find Bitcarnage as a Substack standalone newsletter.

Back in the world of the legacy exchanges, which are looking remarkably healthy of late by comparison to their crypto Brethren.

The London Metal Exchange (LME) has launched London Metals Week with an aim to put the Nickel nightmare behind them. They have a new collaboration, a closer embrace of the mainland Shanghai Futures Exchange.

Meanwhile, in Hong Kong, stock brokers are saying “No” to trading during typhoons.

I must admit I have a feeling which is hardly uber-contrarian, that every time the broker’s associations are against something in Hong Kong, it's the right move to make. These are, after all the same groups which had to be dragged kicking and screaming away from fixed 1% commissions long after the 1986 UK Big Bang and similar moves on Wall Street in 1975. Whereas Hong Kong exchanges allowed floating commissions on April 1^st 2003, 28 years after the USA. Therefore, if the brokers say something is a bad idea, I'm right behind Team Aguzin and the Hong Kong Exchanges Group as it's a sound move to make even if it means some more folk may need extra work from home equipment in their Hong Kong apartments and houses.

Over in Australia, as we're recording this, the Australian Stock Exchange (ASX) is gearing up for what promises to be a rather brutal Annual General Meeting.

Ahead of the AGM Thursday, there were various shots across the bows from shareholder organizations. The Australian Shareholders Association, for instance, gave what was actually a rather generous shot over the bows asking the ASX Chairman to step down within a year.

Frankly, that is very generous. Chairman Damian Roche has zero credibility and has done nothing to stop the rot of a generation which was allowed to fester in the ASX when the monopoly milking mindset manifested itself like the exchange equivalent of Japanese knotweed. With chaos to be confronted, Roche has shrugged and shirked, as has his management team.

All are discredited. The ASX needs to manifest root and branch change. Urgently… Hence my only disagreement with the overly generous tone of the Australian Shareholders Association letter, another year is another year wasted after more than 20 years of rot. It's time to go Chairman Roche and take the embarrassment of ASX mismanagement with you.

Talking of name and shame, the Japanese Stock Exchange has adopted a name and shame regime to boost corporate valuations.

Given in London even broker transgressions are kept a secret, JPX are to be applauded for a name / shame regime for companies who do not comply. Let it apply to brokers, issuers, and advisors the world over too…

Elsewhere the only cheering news from the ArawakX battle in the Bahamas between the nascent exchange and the regulators has been how flattering it was to hear “world class technology” being mentioned - we'll take that as a compliment for the systems our partner companies have developed, albeit they weren't paid for so we removed them again from within the offices of ArawakX.

One great keynote to look forward to next year, CES (the mega Consumer Electronics Show) in the USA will have a magnificent keynote, none other than NASDAQ's Adena Friedman of this parish.

And also this week we welcomed a new scam exchange - following on from the NASDAQ platform we mentioned a month or so back in August. All the best to the good folks of Euronext in killing off the Euronextnl and the new energy platform which is of course a chunky scam trying to sell people's crypto, nothing to do with the fine Euronext empire.

In results news 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.

Schwab reported not as bad as they might have been but nonetheless 3 month net income was -44%, their 9 month net income is -23%.

That contrasts absolutely enormously with Interactive Brokers Group, their Q3 results quite the opposite.

It's not a great market quarter for brokers but IBKR demonstrated some sheer class. Where others were battling malaise, IBKR saw a leap in revenue. It's moderate to strong (in Exchange Traded Derivatives) growth across the brokerage arm, which is one good thing. The other massive advantage was the huge halo effect of interest rate income kicking in post QE that number net income for 9 months up +71.46%, 9 month total net revenues +53%, quarterly net income +59.83%. An incredible quarter from IBKR, quite against the run of play amongst the more stock market focused brokers and equivalent entities.

In new markets this week, Gambia is planning its first stock exchange to widen company funding options.

Hooray hooray, all new exchanges are great news - there are hundreds yet to build… albeit not at the scale of many builds in recent years.

Meanwhile, Indonesia launched their crude palm oil futures exchange on October 13^th

Miami International Holdings have announced that the SEC has published their notice of formal application for a new Miami based MIAX Exchange Sapphire options, which will, when it opens in 2024, SEC willing of course, have a floor in downtown Miami.

Deal news this week, LMAX Group are attempting to acquire Cürex's FX business.

MSCI announced the acquisition of UK Trove Research.

If you're looking for some reading to help you better understand the future of digital markets. Why not consider a copy of my most recent book “Victory or Death?” Blockchain, Cryptocurrency, and the FinTech World. It is published by DV Books and is distributed by Ingram worldwide.

Meanwhile, while you're waiting for your copy of “Victory or Death?” to arrive, check out our LiveStream, Tuesdays 6 o'clock London time, 1 o'clock New York time - the IPO Video live show.

Catch the back episodes on Linkedin on Youtube via IPO-Vid.

Our most recent show, we had John Ensley in Episode #121: How To Bank On Yourself a fascinating possibility, particularly for a US residents.

Coming next week, that'll be on Tuesday at 7pm European time, 6 o'clock London, 1 o'clock Eastern is going to be Ann Berg: Unravelling Global Commoditiess from one of the world's leading commodity markets experts.

However you look at commodities we're always looking ahead in terms of price. And I suppose that's one of the reasons why I was initially attracted to The World in 2050, which is our “Book of the Week” this week.

It was written by an acclaimed author, former Euromoney Editor, adjunct professor at Trinity College Dublin, and indeed IPO-Vid guest #114 Hamish McRae.

A bold and vital vision of our planet The World in 2050 is an essential projection for anyone worried about what the future holds. For if we understand how our world is changing, we will be in a better position to secure our future in the decades to come.

All suggestions are welcome if you'd like to nominate a book for us to cover as “Book of the Week”.

Our next “Book of the Week” will be unveiled on Saturday in the Exchange Invest Weekend Edition, that's free to read by the way ladies and gentlemen. You can sign up to ExchangeInvest.com but don't forget, if you want all the news on the bourse business sent daily to your inbox then subscribe to Exchange Invest also via ExchangeInvest.com. It's only $349 per annum to join the exchange of information.

Product news this week, ICE has announced a suite of broad European equity indices. We see the ICE brand name gradually moving across the index world.

The Bombay Stock Exchange (BSE) launched a series of futures and options contracts and commodity derivatives as did the NSE. Why were they doing that all on the same day?

Technology news, MCX (Multi Commodity Exchange) of India faced a few teething problems on their new software launch at 10.45 local time on October 16^th. But at least having overspent something like the better part of $100 million and embarrassed themselves enormously across the parish to an almost ASX level of inadequacy.

Finally, ladies and gentlemen, the MCX has their new technology platform provided by Tata. The reason of course therefore, we saw so many new product launches this week in commodities from BSE and NSE was exactly a pile in to provide added competition in the commodity sphere and further remind MCX that the glory days of the Jignesh Shah era are long gone.

Congratulations to STT (the South African Exchange) vendor on their latest implementation, they have successfully launched the bond trading system platform for the Namibian Stock Exchange.

Over in career paths this week, couple of new appointments at CBOE who of course, recently lost their group CEO.

Catherine Clay has been appointed Global Head of Derivatives and Adam Inzirillo has been promoted to Global Head of Data and Access Solutions.

Meanwhile, at Hong Kong Exchanges, all the very very best to Tori Cowley, the Chief Communications Officer who's going to be departing the company at year end.

Speaking of departures, ladies and gentlemen, think about it this way:

The Florida Flight is real...

In New York alone, the financial center there has seen 158 financial firms depart since the end of 2019, removing a hefty trillion dollars (okay, okay, the precise stat say $993 billion if you must be pedantic) of those assets have gone to other parts, most notably the warm, less taxed, and much less crime ridden entrepots of Florida…

And indeed, a similar effect is happening on the West Coast, California, home to notable financial centers in Los Angeles and San Francisco, as well as it has to be said pretty crummy democratic governance in both cities and a huge defund the police movement, leading to all sorts of ramifications. Those financial centers in California have also lost a cool trillion dollars in assets under management, albeit their corporate emigres are often moving closer to home from the west coast to the likes of Texas.

…And on that mysterious and magnificent note ladies and gentlemen, my name is Patrick L. Young, creator of markets and exchanges the world over, founder and publisher of the watercooler of the bourse business, the exchange of information ExchangeInvest.com

Thanks for listening!

LINKS:

Israel Orders Freeze On Crypto Accounts In Bid To Block Funding For Hamas
FT

LME Launches New Collaboration With Shanghai Futures Exchange
Mining.com

Stock Brokers Say 'No' To Trading During Typhoons
RTHK

HKEX To Seek Views On Trading During Storms
The Standard (HK)

ASA Calls For ASX Chairman To Step Down Within A Year
AFR

Japan Stock Exchange Adopts Name And Shame Regime To Boost Corporate Valuations
Financial Times

ArawakX Defends Valuation Methods Amid Winding-Up Application Battle
EW News

Nasdaq's Adena Friedman To Keynote CES 2024
PR Newswire

Euronextnl New Energy Platform Is Dedicated To Promoting The Global Development Of New Energy And The Stock Market
Digital Journal

Schwab Reports Q3 Results
Business Wire