Jan 4, 2024 10 min read Exchange Invest Weekly Podcast

226 Exchange Invest Weekly Podcast January 6th, 2024

This week in the parish of bourses and market structure: There Is Another FCA Tinker, Overworked Swedes, And Calls To Break Up London Stock Exchange Group

Transcript:

This week in the parish of bourses and market structure:

There Is Another FCA Tinker

Overworked Swedes

And Calls To Break Up London Stock Exchange Group

My name is Patrick L Young

Welcome to the Bourse Business Weekly Digest

It's the Exchange Invest Weekly Podcast Episode 226

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

A very happy new year to you all ladies and gentlemen and let's start in Bitcarnage this week.

Happy news for FTX creditors, liquidators are saying payments could be as high as 90% while in the open market, Bloomberg reports that FTX claims have reached 73% on the dollar on a claims market platform. Certainly a long way from the dark days of a year ago when all seemed lost.

Although how can we summarize the year in crypto 2023?

What it certainly had a hope, but it's quite a sting in the tail, given the distributed truth reported by Bloomberg, which appears to suggest that crime pays: Ousted Binance Founder, and indeed one might hunt fugitive CZ fortune grew by $25 billion in 2023.

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 updates and happenings in the world of crypto and digital assets. You can find Bitcarnage as a standalone on Substack.

Leading our stories and there's our first edition of 2024, Britain has proposed a post-Brexit easing of company listing rules.

One has to pity the poor FCA, a subsidiary of the incompetent Bank of England, which was born in a world where the EU was everything. Now the UK regulator is adrift, just as London has lost its risk mojo. Anyway, they're trying to secure a few simple reforms but alas, it's more like a revolution the City of London requires rather than this tinkering at the edges…

The problem is - everything. The blob rules the markets, the FCA are broadly incapable of undoing the EU straitjackets and freeing markets while the politicians at the top have clearly no idea that growth isn't something that people's Comintern can legislate to happen. The UK is in a tricky place as it faces up to an even more left wing anti-business new government in 2024…or more of the useless same.

On the broader view, the City of London needs to decide whether it is a mercantile hub with a risk appetite or a place where bureaucratic corporate languish as they obsolesce.

Indeed, furthermore, with the LSEG in a sort of data-driven myopia of its own making.

Former UK Chancellor of the Exchequer, Ed Balls has called for a breakup with the London Stock Exchange Group - essentially identifying the same points Exchange Invest has been making ad infinitum. The sprawling LSEG behemoth has dropped the ball on its bourse and markets business with its crazed lurch into pure play data. Why does this matter?

Well, unless a miracle descends upon British politics and the Conservative Party remember governing is about doing and not condescending the electorate…the condescending Labour Party will have the next chance to be in power (if not probably in government). However, a bold move to break up the LSEG would please their socialist supporters and make them look decisive. Is Out of His Depth Dave of going to be able to defend himself…despite ironically being named one of the committee to help the Shadow Chancellor Rachel Reeves last month.

In a more positive note somebody who does believe in their own platform, Aquis Exchange Founder and CEO Alisdair Haynes buying 1,482 shares of his firm stock just before Christmas Wednesday, December 20^th. A modest bargain £5,409.30 (that's nearly $7,000) at an average cost of 3.65 by $4.60 per share but nonetheless, it's a gesture of confidence in his firm which is absent when it comes to most other cash in options / sell out executives in the parish.

Over in Stockholm, we hear Swedish traders have been calling the US stock market NASDAQ asking you to trim hours due to work life balance - that was a story from Bloomberg.

One is left to wonder is there a potential Fika compromise afoot with a coffee and cake break to help maintain Swedish work-life karma?

Libya's Stock Exchange in a lovely Christmas gift to the parish, there was a resumption of trading on the Libyan Stock Exchange in Tripoli after a 9 year civil war hiatus on December 25^th. There were 10 listed companies when the exchange closed due to civil strife. Good to see it back in business.

Meanwhile, while we didn't have any results, in new markets, the Angolan Stock Exchange is looking to launch a commodities market to finance agriculture.

In deals, it was a busy week for deals in the parish remarkably, so given the fact it was Christmas period all those 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.

The Philippine Stock Exchange finally, atlast we can say, one story which has been ongoing in some shape or form since the birth of the EI 11 years ago, and even before is looking likely to be resolved with the Philippine SEC allowing the Manila stock exchange to buy the bond trading platform Philippine Dealing System Holdings Corp better known as PDS Group.

Elsewhere, Euronext CEO is rolling out another possible allfunds bid in his acquisition hunt.

The fascinating point about this Boujnah statement is a mention that he may move beyond the EU27 nations… That may include a further beefing up of Euronext London (as already evidenced through 2023) but also there's the possibility he mentions of acquisitions in the UK post-Brexit or even as far afield as Asia.

Elsewhere this week, we reported in Exchange Invest, the watercooler of the bourse business that both Belgrade and one of the three Ukrainian stock exchanges are looking to increase their corporate capital with a dose of investment.

If you want to keep up with that news, you need a subscription to Exchange Invest Daily. You can get that by going to ExchangeInvest.com. Rush now folks because our prices are going up in the near future, by the middle of January.

Meanwhile, if you want to understand how technology is affecting life and markets, check out my most recent book “Victory or Death?” Blockchain, Cryptocurrency, and the FinTech World. It's a gripping read, its about how it's a binary world and your career will sustain or collapse in the next stage of the digital world's growth, hence the title “Victory or Death?”. Lest you need reminding of the exciting times for finance in which we are living. “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 livestream Tuesdays 5pm London time, midday New York time - the IPO-Video live show. Catch back episodes on Linkedin and Youtube via IPO-Vid.

Our next show looking back on “A Year in Revolution 2023, Part I” is coming next Tuesday.

“Finance Book of the Week” that we'll be back next week too, as soon as we have an Exchange Invest Weekend.

If you're looking for something to read abroad or read about markets in general, the world, economy, and politics then check out our Weekend Review edition. You can sign up for that absolutely free and you can get that at ExchangeInvest.com. While you're there, why don't you consider getting a free one-month trial to Exchange Invest also via ExchangeInvest.com

Product news, the Shanghai Exchange, interestingly, they've increased margins for some shipping futures. Fascinating to ponder insofar as shipping rates remain volatile, but mostly as a result of vast drops in price over the past 12 months following the previous EverGiven peaks of March 2021 driven by that ship’s inadvertent hand brake turn blocking the Suez Canal. We'd seen prices going down. In recent weeks, the volatility has turned on the Red Sea issues with Houthi raiders proving problematic, hence the increase in margins.

Technology news, lots of changes to settlement times being mooted. Even the Egyptian Exchange is reportedly, studying a new upgrade to its trading systems to allow T+0 and also address various issues of tampering with the operations of the stock market.

Edaa in Qatar are not quite up with the zeitgeist of getting the T+0, they've just delayed until March 2024, a move from T+3 to T+2 in coordination with the Qatar Financial Market Authority (QFMA) at the request of the local custodians.

However, in India SEBI is taking its first steps to introduce instant settlement in the Indian stock market, that's going to move ultimately to a T+0 settlement cycle.

Elsewhere in technology delays, the UK reckons it can have a bond consolidated tape live during 2024 but alas, the European Union is now targeting Q4 2025.

In regulation news, the SEC is poised to rework the stock buyback rule after court tossed it out - that's according to Bloomberg Law News.

I'm reminded of a comment from the Berkshire Hathaway annual letter of 2022, and I quote:

“Gains from value-accretive repurchases, it should be emphasized, benefit all owners - in every respect. Imagine, if you will, three fully-informed shareholders of a local auto dealership, one of whom manages the business. Imagine, further, that one of the passive owners wishes to sell his interest back to the company at a price attractive to the two continuing shareholders. When completed, has this transaction harmed anyone? Is the manager somehow favored over the continuing passive owners? Has the public been hurt? When you are told that all repurchases are harmful to shareholders or the country, or particularly beneficial to CEOs, you are listening to either an economic illiterate or a silver-tongued demagogue (characters that are not mutually exclusive). Rip, Charlie Munger.

In career news this week, there's been a lot of feedback and blowback and all manner of comments predominantly positive about the arrival of the Hong Kong Exchange’s first female CEO. Nicolas Aguzin was not fortunate and overall, I cannot help but feel that part of the problem here remains the ludicrous conceit that a top-tier banker can simply walk into running an exchange seamlessly. That's not to criticize Aguzin per se, as he did a lot to maintain the HKEX profile worldwide, and I do not think he made any significant errors.

However, pushing bankers into the C-suite remains an interesting quirk of the parish: A masochistic prevailing tendency to deploy outsiders to run bourses, where there is a growing cadre of insiders who get the “for profit, electronic / digital market” approach (heaven knows, it's been 25 years..so how on earth there can be those who do not get the plot!) No, no, don't email me ladies and gentlemen, I know there are all too many of them…they're also notable, I have to say that those parties do not read Exchange Invest, I hasten to add.

Anyway, on the broader picture of Hong Kong Exchanges, farewell to Nicolas Aguzin again, I wish him all the best. We're really excited at Exchange Invest, to see Bonnie Chan taking the helm. Hong Kong goes through remarkable paroxysms of doom in cyclical downturns and this is a typical series of those genre. The future for Hong Kong Exchanges is spectacular.

Meanwhile, there was an interesting footnote in the past week via Yahoo from the South China Morning Post, and I quote: “The city's market regulator has been inundated with applications from financial firms and individuals seeking financial services licenses, despite a downturn in the capital market.”

Elsewhere in career news this week, the NGX Group has announced the appointments of Temi Popoola and Jude Chiemeka as GMD/CEO designate of Nigerian Exchange Group Plc and acting CEO of Nigerian Exchange Limited ahead of the retirement as planned of Oscar N. Onyema.

Budapest bourse elected a new chairman, Barnabas Virag, a deputy governor of the National Bank of Hungary (NBH), who replaces another National Bank of Hungary deputy governor Mihaly Patai.

Over in India, SEBI has approved the appointment of Pramod Agrawal as BSE Chairman. Pramod Agrawal as a former IAS officer of the Madhya Pradesh cadre, and has served as Coal India Chairman from February 2020 to June 2023.

I must admit I'm not overly convinced about perpetually adding retired civil servants as exchange chairman, albeit Sebi seems to clearly Like this approach.

And then ladies and gentlemen when we look to BigWorld, we're actually looking to BigWorld within the parish. Thomas Peterffy the mega multi-billionaire founder and overall commander of Interactive Brokers, according to Forbes has never read a single investment book. A highly educating fact in and of itself.

…And on that mysterious and magnificent note thank you for listening to this EI Weekly Podcast 226. Join us daily via ExchangeInvest.com for the newsletter of the bourse business, or if you're new exchange you'd like built to, get in touch.

My name is Patrick L Young and I wish you all a great week in life and markets.

Thanks for listening!

LINKS:

Britain Proposes Post-Brexit Easing Of Company Listings Rules
Reuters

Balls Calls For LSEG Break Up
MSN

Aquis Exchange PLC Insider Alasdair Frederick Seton Haynes Acquires 1,482 Shares of Stock
Defense World

Swedish Traders Ask Nasdaq For Shorter Opening Hours
Bloomberg

Why Are Swedish Traders Asking Nasdaq To Trim Trading Hours?
Hindustan Times

Libya's Stock Market Resumes Trading After More Than 9 Years Of Closure
Reuters

Angolan Stock Exchange Wants To Launch Commodities Market To Finance Agriculture
Medafrica Times

PSE Allowed To Take Over PDS
Philstar

Euronext CEO Rules Out Another Allfunds Bid In Acquisition Hunt
Reuters