Dec 2, 2023 14 min read Exchange Invest Weekly Podcast

222 Exchange Invest Weekly Podcast December 2nd, 2023

This week in the parish of bourses and market structure: ASIC Talks Tough, India's Conscious Coupling, Sino T Bonds Loom, ASX On The Rack, And St. Petersburg Lives

Transcript:

This week in the parish of bourses and market structure:

ASIC Talks Tough

India's Conscious Coupling

Sino T Bonds Loom

ASX On The Rack

And St. Petersburg Lives

My name is Patrick L Young

Welcome to the Bourse Business Weekly Digest

It's the Exchange Invest Weekly Podcast Episode 222.

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

In Bitcarnage this week:

We were prompted to have a quick rendition of The FUD Has Gone, a song inspired by David Guetta.

Binance, shaken to its core by a massive criminal indictment, prompted us to query their dogmatic approach to reporting criticism. We could even put it to music based on that classic David Guetta hit…

What are we supposed to do?
After all that we've been through
When everything that felt so right is wrong
Now that the FUD is gone?

There is nothing left to prove
No use to deny this simple truth
Can't find the reason to keep holding on
Now that the FUD is gone, FUD is gone

All this came in the wake of Binance’s unmasking - well, it was an unmasking only if you weren't reading Bitcarnage or Exchange Invest for the past year or three - as a criminal enterprise, fined $4 billion with CZ guilty of criminal actions and facing a 12 month to 10 year jail spell in the USA. Not in the SBF territory in terms of sentence length, despite de facto enabling the funding of terrorism, but still pretty grim as a life outlook.

There was a perfect summary from “Mike Burgersburg” - aka our previous IPO-Vid guest Episode #100: Examining Dirty Bubbles James Block who highlighted the key lines in the agreement between CZ and the US Department of Justice. As he headlined it on X (Twitter) Binance Just Became The Biggest Rat In History. CZ Sold Y’all Out. Cheers!

Where does that leave CZ? I would suggest exposed. No one wants to see another human suffer, but I suspect the former “4:FUDder in Chief!” is now looking at a somewhat exposed existence whether he returns to his native Canada, stays in Dubai or goes back to Singapore where he was often seen a year or so ago.

…It is probably stuff for Netflix box bingeing to come but I'm fascinated at what stage the sangfroid of the great “4:FUD!” culture finally pelt fell apart. I imagined the Federal investigator had a colleague wheel a hanger rail of orange jumpsuits into the CZ line of viewpoint and pondered aloud which size might be the Canadian citizens best fit?

Certainly, it's a massive comedown for a CEO/Founder who played fast and loose with pretty much every aspect of the law, including his epic days where even then Maltese Prime Minister pushed for Binance being regulated.

It is indeed all a far cry from the heady nonsense of this year until recently on the bone on social media exemplified by for example:

1) CZ’s infamous “everything will be framed by FUD!” Tweet.

Will try to keep 2023 simple. Spend more time on less things. Do’s and Don’ts.

Education
Compliance
Product & Service
Ignore FUD, fake news, attacks, etc.

In the future, would appreciate it if you could link to this post when I tweet “4”

2) The ongoing “We are net expanding headcount” canard which was of course met by volleys of “4:FUD!” from the Binance cultists.

3) Indeed a simply unending stream of Binance optimism which has now proven rather fallacious…and hopefully no “4:FUD!” seeking to repudiate the reality of Binance’s year being a fall from grace of spectacular proportions - albeit for those who are naive enough to see grace and the Binance set up in the first place.

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

Out there in the world of legacy exchanges, the mainstream markets, it's not as popular soap opera as “Neighbours” once was but the ASX management debacle of incapacity to upgrade tech certainly is a telenovela without the glamour. ASIC and RBA continue to seek to prove they have finally got the point of enforcing competence on Australia's woeful market structure monopolist.

ASIC ready to wield new power on ASX to force CHESS competition, AFR has said in a headline just in the past week.

For the good of markets in Australia and the benefit of the parish, we are well beyond the moment where there needs to be competition down under in every aspect of the ASX monopoly as the incumbent has failed. Let's hope ASIC actually has the backbone to do this.

Meanwhile, the ASX’s capacity to churn out endless self-serving drivel, which doesn't relate to their surreal level of incompetence over the years, makes their every utterance readable only while grasping a B-S bingo card to tick off the usual groupthink of the shameless careerists incapable of running an enterprise.

In that respect, ASX had their report card marked and ASX looks rather like a laconic wayward team seeking to justify their poor exam performance all the while watching videos on TikTok and paying at best half hearted attention to the situation around them.

Over in India, IEX may have 90% of the uncoupled power exchange business, but they have only 7% of power trades on exchange as a whole with only 7% of electricity being traded on exchang it's perhaps obvious then as to why the Indian authorities say the markets in power will be coupled and soon that may be a risk for the dominant IEX but then again, their 90% market share being based on a mere 7% of all electricity being traded, allows for them to lose a lot of market share overall and still trade a huge amount more if more is on exchange.

Deutsche Börse wants to prevent companies from migrating with the new Dax rules.

That's a hangover, the Linde crisis, which was an unfortunate episode in the history of DB1 undermining somewhat that technocratic excellence epithet usually appended to all things Teutonic. Action that seems has been taken.

Intercontinental Exchange (ICE) has announced amendments to their private exchange offer and consent solicitation for Black Knight’s outstanding 3.625% Senior Notes due 2028.

The Hong Kong Exchange has added the Indonesia Stock Exchange to the recognized stock exchange.

There was a bit of a crisis in mainland China, Reuters had an exclusive report, the Beijing Stock Exchange is telling ‘major shareholders’ (that's those people who hold more than 5% of any company) to refrain from selling. Apparently, you have to get in form filled in for permission to sell and apparently then that permission is being withheld in the currently rather parlous state of the Chinese stock markets.

Speaking of parlous stock market stitch short selling is as ever highly controversial South Korea's short-selling ban has raised political questions - Nikkei Asia note. And of course KRX has been very actively trying to stop a short selling ban worrying that it will stop upgrades of the Korean marketplace and the overall index environment.

Thai SEC is directing the stock exchange of Thailand to tighten short-selling rules there.

And even in the UK, the London City regulator could restrict short selling under new proposed regulations.

Then we come to the sorry case of Dublin’s financial centres. According to the Business Post, the government declined to include the Irish Stock Exchange, the EURONEXT dabbled in financial services strategy documents.

According to their quote:

“Government officials said it was a “notion” to say the state could create rules to stimulate Ireland's struggling equity markets, and declined a request from the stock exchange for inclusion in a major strategy on financial services”.

Alas, the idiocracy which masquerades as Ireland’s government is headed from bad to worse. Where once an economic miracle was created, now there is only chaos and political correctness awaiting the inevitable hard left Sinn Fein government which won't do any good no matter how much my puppies maybe barking about the matter in the background…although it might wash away the current ruling class and their vast inadequacy in every area I suppose. Then again what happens in Ireland's domestic exchange might not matter to parent Euronex who bought the Dublin exchange for its vast catalogue of debt unrelated international asset listings, not the domestic stock exchange per se.

Over in the Bahamas, the Chief Justice there is satisfied that ArawakX (the field crowdfunding platform comm exchange) is $2.4 million insolvent. That's a pretty hefty number given the fact they never had more than $200,000 in revenue.

At the same time speaking of bankruptcy cases, there were curious brace of cases in Russian courts as the St. Petersburg Stock Exchange has claimed it as the innocent victim of bankruptcy proceedings.

Meanwhile in deals, it was a busy week for deals in the parish all the deals 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.

Abaxx has continued its massive fundraising. They've now raised $30.7 million from BlackRock and Wellington to advance their futures markets raising with gusto as they approach launch. That's very exciting times indeed.

The Philippine Stock Exchange has moved closer to merger with PDS (Philippine Dealing System Holdings Corp), the bond market, they've been given permission to increase their stake by the Philippine SEC, on route to presumably a final takeover of the platform, which has been a negotiation ongoing for more than 11 years now.

Finally, a little bit of PLY news, Valereum PLC has been restored to trading on Aquis. Unfortunately, that was marked by the fact that the previous chairman that seems didn't have the money he claimed he had raised and the Gibraltar regulators required 5 million Pounds in the kitty for Valereum to complete the acquisition of the Gibraltar Stock Exchange. Net result: the Gibraltar Stock Exchange is alas scheduled for closure (the license is in the process of being withdrawn / wound up) and Valereum will structure away from the regulated exchange business. That's a very disappointing result all round including of course for PLY.

Meanwhile, if you're trying to understand how technology is affecting life and markets, check out my latest book 20 years on from the excitement of the original FinTech best seller Capital Market Revolution.

“Victory or Death?” Blockchain, Cryptocurrency, and the FinTech World, an easy read explaining the differing and diverging roles of banks and exchanges amongst other issues. “Victory or Death?” is published by DV Books and is distributed by Ingram worldwide.

While you're waiting for your copy of “Victory or Death?” to arrive, check out our live stream - Tuesday at 6 o'clock London time, 1 o'clock New York time - it's the IPO Video live show.

Catch the back episodes on Linkedin, Youtube, and Facebook by searching “IPO-Vid”.

We had absolutely magnificent show last week, this was with Steve Zwick & Stephen Donofrio both on the road to the UAE and they were giving us The View to COP 28. Absolutely fascinating discussion of environmental finance all round.

Our “Finance Book of the Week” is John Kenneth Galbraith, the The Great Crash 1929. A classic examination of the 1929 financial collapse with Galbraith, the economist presciently noting a sound knowledge of what happened in 1929 was the best safeguard against its recurrence.

If you'd like to know more about this book, you can buy it online The Great Crash 1929 by John Kenneth Galbraith.

Our next book of the week will be unveiled on Saturday in the Exchange Invest Weekend Edition. Don't forget Exchange Invest Weekend Edition is absolutely free, you can sign up at ExchangeInvest.com or if you want all the news on the bourse business being sent daily to your inbox Monday through Friday, then go to an ExchangeInvest.com and subscribe to Exchange Invest Daily, only $349 per annum to join the exchange of information.

Product news this week, Hong Kong Exchanges are inching towards launching Chinese treasury bond futures in Hong Kong. The Chinese yield curve traded via Hong Kong is perhaps the most exciting new product opportunity we've seen in years. That's going to be a huge event when it takes place for all markets across the yield curve.

Meanwhile, in Europe, the benchmark shift has left a whole new battle simmering over the yield curve in major currencies, particularly the Euro.

Thus, it's a kind of Deja vu threesome, this time one more time as the EUREX seeks to wrench EURIBOR trading price in London and the CME tries to muscle in to.

Interesting news from EUREX, 10% market share not to be sniffed out albeit I think - if my memory serves me correctly - the EUREX EuroMark had more than this traded in Germany while London reigned supreme in EuroMark and then subsequently EURIBOR, albeit they did lose the Bund in an epic tale (which of course you can read all about in my very first book of 25 years ago “Capital Market Revolution!”).

The European Union coffee and cocoa stored in EU warehouses is at risk of destruction under new origin rules.

The perils of this invasive ESG retrospectively applied could be a mass exodus from EU warehouses with a concomitant major impact on the European Union's position as a port / freight center for anything other than its own highly regulated usage.

Tadawul has launched options trading with a leading Saudi stock following the launch of MT30 index futures on August 30^th and 10 Single Stock futures slightly earlier on July 4^th now there are 4 single stock options Saudi Aramco Al Rajhi Bank, STC, and SABIC.

In technology news this week, the Hong Kong Stock Exchange's digital IPO platform FINI is live! As listings have dropped to a two-decade low but I'm sure that's somewhat cyclical, driven by what's going on on the mainland.

Meanwhile, Capgemini has collaborated with Euroclear for the successful launch of Digital Financial Market Infrastructure (D-FMI).

And then we get to the Finnish power error.

A fat fingered Finn fumbled the fuses leaving some folks with free electricity for an hour or two (-500 euros per megawatt hour from midnight to 0200 am of a Friday into a Saturday morning was the order of the day)

Sebi they're saying T+0 settlement will come by March. T instant is going to be coming a year later. Very exciting news indeed!

TNS was published colocation services, Brazil's largest stock exchange B3.

The carbon software firm MVGX Tech has partnered with Exberry to power interconnected carbon exchange and registry networks upholding carbon sovereignty.

In career paths, congratulations to parish veteran Robbie McDonnell, who's returned to the sales beat with vendor eClerx heading up their technology sales in APAC.

Meanwhile, over the OCC (Office of the Comptroller of the Currency), way back when there were only a few of us proclaiming the notion of financial technology to empower change. I don't recall the OCC being amongst them at that time. Since then, many have been the charlatans who have joined the FinTech fray, it would appear the OCC didn't really understand even human nature, let alone the nature of digital when they employed somebody whose CV was sparse in its reality to truth.

And finally, this week in career paths, RIP to the grid Charlie Munger, Warren Buffett's remarkable business partner at Berkshire Hathaway, who has died aged 99.

That means dying at age 99, at the age of 79, Charlie Munger witnessed the last flight of the Concorde as it moved into retirement.

Charlie Munger was already very mature individually when Concorde first flew in the mid-1970s.

For passengers, if you didn't fly Concorde you missed out. If you did - well, the leg room wasn't great but outside of race cars I have known, nothing accelerated with the same gusto (and indeed drinking champagne while accelerating in racing cars has been frowned upon throughout my lifetime…no room for canapes either apart perhaps from any Metro 6R4 groupie car, anyway…)

An original market sizing prediction of 350 aircraft resulted in only 100 ever being optioned and most of those options died during the 1973 oil crisis. Of 20 aircraft produced BA and Air France received 7 each and 6 were built for testing Braniff, Iran Air, and Singapore Airlines also flew Concordes at different times.

In the end, the refusal of Airbus to manufacture spares for the aircraft led to its death at a tricky point for commercial aviation. Following the 9/11 terror attacks.

John Hutchinson, Concorde Captain, "The World's Greatest Airliner" (2003) remarks:

“The only thing that tells you that you're moving is that occasionally when you're flying over the subsonic aeroplanes you can see all the 747s 20,000 feet below you almost appearing to go backwards, I mean, you are going 800 miles an hour or thereabouts faster than they are. The aeroplane was an absolute delight to fly, it handled beautifully. And remember we're talking about an aeroplane that was being designed in the late 1950s through mid 1960s. I think it's absolutely amazing and here we are, now in the 21^st century, and it remains unique. Rip Concorde!

…And on that mysterious and magnificent note, my name is Patrick L. Young creator of markets, publisher of Exchange Invest, the Daily Bulletin of the bourse business, wishing you all a great week in life and markets.

Thanks for listening!

LINKS:

ASIC Ready To Wield New Power On ASX To Force CHESS Competition
AFR

ASX Expands Delivery Uplift Roadmap To Include New Recommendations From Review
ASX

ASX Partially Fulfils ASIC’s Reporting Requirements Amid CHESS Debacle
The Australian

Market Coupling Of Power Exchanges By FY24-End
The Financial Express

Deutsche Borse Wants To Prevent Companies From Migrating With New Dax Rules
MarketScreener

Intercontinental Exchange - Intercontinental Exchange, Inc. Announces Amendments To Private Exchange Offer And Consent Solicitation For Black Knight InfoServ, LLC’s Outstanding 3.625% Senior Notes Due 2028
ICE

HKEX Adds Indonesia Stock Exchange As Recognised Stock Exchange
Nasdaq

Exclusive: Beijing Stock Exchange Tells 'Major Shareholders' To Refrain From Selling -Sources
Reuters

South Korea's Stock Short-Selling Ban Raises Political Questions
Nikkei Asia

Thai SEC Directs Stock Exchange To Tighten Short Selling Rules
Regulation Asia