Feb 1, 2024 12 min read Exchange Invest Weekly Podcast

230 Exchange Invest Weekly Podcast February 3rd, 2024

This week in the parish of bourses and market structure: Ackmans’ Parish Boost, Aquis Powers Ahead, LSE Atrophies, And There's Good Results From IEX and JPX

Transcript:

This week in the parish of bourses and market structure

We have background noises of mopeds and traffic chaos, as this episode comes to you from Bangkok in Thailand

This week in the parish of bourses and market structure

Ackmans’ Parish Boost

Aquis Powers Ahead

LSE Atrophies

And There's Good Results From IEX and JPX

My name is Patrick L Young

Welcome to the Bourse Business Weekly Digest Episode 230

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:

Crypto lender Nexo is seeking $3 billion in damages from the Government of Bulgaria over an aborted investigation. That's a lumpy first fightback to the crypto market structure week, as Yahoo Finance notes: Binance case again testing extent of SEC's power over crypto while Mt. Gox confirms addresses for BTC repayment plans.

On Nexo, that's a staggering sum, more than 3.5% of Bulgarian GDP after a huge read reported on January 13^th 2023 in Episode 2558 of Exchange Invest.

Meanwhile, following on from the Trumpy ones remarks to the same end, Presidential candidate but from the Democratic side of the equation, albeit I think he's going to run as an Independent, Robert F. Kennedy Jr. pledges to end US efforts to move towards CBDC at the same time as Coinbase has been passing the lucre around an election year and hey presto, they say 18 US Senators now ‘stand with crypto’ according to the Coinbase Lobby Group.

Not so much a sting in the tail but something leaving behind a heady whiff which I suppose might knock out the heavy lifts of durian on the streets of Thailand amongst other remarkable flavors. At least for once this is a whiff not of pure criminality in the world of crypto but it is clearly a touch of hype, Decrypt goes: Inside the perfume DAO that's creating a ‘scent of the Metaverse’ - “London-based fragrance house Rook Perfumes is shepherding an NFT-based DAO that's creating a scent for the digital world.”

If you enjoyed 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 standalone on Substack.

In the mainstream of the parish of exchanges, over at the Asian Financial Forum: Hong Kong Exchanges are going CEO Nicolas Aguzin has been underscoring Hong Kong's ‘superconnector’ role. Noting that China and the rest of the world are ‘massively underinvested’ in each other.

Nicolas Aguzin is enjoying a barnstorming spell on his way out of HKEX and it's good to see that unlike the tedious western practice of shunting a retiring exec out to pasture ASAP, Hong Kong Exchanges Group are showing their integrity and continuity which will pay dividends as the next, exciting phase of the Group's Development becomes much more apparent as this year goes on.

Meanwhile, LME, the Hong Kong Exchanges subsidiary are apparently targeting Hong Kong as an option for warehouse expansion.

Probably no great surprise there, given the ownership structure of LME these days, and indeed the move would be a sensible one emphasizing the core point of contemporary Hong Kong, as a gateway between East and West. Clearly, there are issues of course, not least of which is the cost of real estate in Hong Kong but this is an interesting potential development.

And a third exciting piece of news this week from Hong Kong, the HKMA (Hong Kong Monetary Authority) and the People's Bank of China (PBoC) have announced measures to deepen financial cooperation between Hong Kong and the mainland.

From those win-wins in Hong Kong, we move to India, the National Stock Exchange (NSE) marked a 2 million month, that was 2.1 million new account registrations in December coming on the back of 1.4 million account registrations in November. Yes, 2.1 million clients were added to the burgeoning Indian stock exchange in a single month. Fastly more than many other nations have in their entire investor pool.

SIX (the Swiss Exchange) has apparently been running slide rule over Allfunds. That's Allfunds, which was the subject of a putative bid from Euronext, which was abandoned in early stage just over a year ago.

Elsewhere, South Korea is considering shaming companies into boosting their company valuations. They're claiming that they will name and shame companies with poor corporate governance structures, seeking to replicate Japan's success in boosting stocks via corporate reforms. This of course, comes from an arm of the same Korean government, which also bans short selling. I wonder, is there any chance of extending the ‘name and shame’ to the blob itself?

In Thailand, from where we're actually recording this show today in Bangkok, SET (Stock Exchange of Thailand) has revealed a very exciting three-year strategic plan to raise confidence in the Thai capital market.

Meanwhile, I'm looking forward to giving the keynote speech which will take place just before you get the ability to listen to this podcast as we're recording a day early in order to facilitate my being the opening keynote for the 26^th Annual AFM Association of Futures Markets which has been hosted by TFEX (Thai Futures Exchange) subsidiary of the Stock Exchange of Thailand. I'm looking forward to catching up with many readers during the course of the conference.

Colombia is moving to fend off frontier status for its fading stock market.

The government, pension funds, traders, the exchange itself, and some of the country's largest companies are working on a plan to bring more liquidity and trading volume to the market after a JPMorgan Chase & Co. report last year flagged that the MSCI could drop Colombia to frontier status.

That's of course a headache for Colombia as a pivotal element in the new NuamX Exchange, which has been uniting Colombia, Lima, and Santiago.

Our IPO-Vid guest last week was John Fildes on this topic, by the way, IPO-Vid #129 Disruption and Growth with John Fildes can be found online at Facebook, Linkedin and Youtube just go and search IPO-Vid.

Finally, in the big news stories of the week, Germany's Chancellor Schultz is calling for the completion of the EU Capital Markets Union. I have to agree even if it is more than a decade late.

Over in parish results, 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.

Great numbers from Japan Exchange Group at the point when of course their stock market is within sight of managing to regain the all-time highs of the Nikkei last seen in 1989.

Meanwhile, on the quarterly numbers, operating revenue at Japan Exchanges Group +11.1%, net income +32.4%

Over the Indian Energy Exchange not quite as spectacular but still scintillating results net income for the latest quarter +20.34%.

Good news also from the UK, at least one stock markets going places, Aquis where insiders, it was recently announced have been active buyers of their own stock. Well, it's not surprising given the results they just announced. Net revenue +12%, profit before tax +16% as Aquis sits firmly on the green side of the ledger having built itself up over the course of the last 10 years.

Aquis show what a well managed set of priorities can do to deliver a stock market as the London Stock Exchange itself is 25% smaller than a decade ago, according to a recent report from Bloomberg.

The drift as a result of an obsession with M&A at group level in place of focusing on the core business of the London Stock Exchange has finally caught up with LSE Group which remains broadly incapable of reform due to its to its sclerosis masquerading as management.

In new markets this week, delay to the launch of the Ethiopia Stock Exchange. We mentioned this before, Ethiopia's new stock exchange, seeking around their frothy insta unicorn valuation reckoning it was worth more as a startup than any other exchange in Africa. In fact, it was worth more than most of the rest of the exchanges in Africa put together despite for example, the Johannesburg Stock Exchange having more than a century of history and considerable profitability to boot. No wonder the fundraising is delayed, the valuation is rather delusional for the Ethiopian Stock Exchange. And all those advising the government have been embarrassed including some hapless UK quango.

Over in Nepal, the government there is forming a committee to study the necessity of a second stock exchange. The very decision to have a government committee decide on competition and exchanges will not be lost on those who advocate for free markets.

Deals news this week, Tel Aviv Stock Exchange are looking to develop their tech stack further.

Massive confidence boost to TASE, which has changed inexorably since the investment by former ASX directors / hedge fund managers Shane Finemore and Russell Aboud in 2018. A very very high profile boost for TASE and a very strong boost for the Israeli economy at a difficult time following the horrific Hamas terrorist attacks of October 7^th last year. And of course, the biggest boost of all core investor in this round: Mr. and Mrs. Bill Ackman placed $25 million into the coffers of TASE for a 4.9% stake in a very successful fundraising round.

If you're trying to understand ladies and gentlemen, the dynamics of what's going on at the moment in markets and market structure consider getting yourself a copy of my most recent book “Victory or Death?” Blockchain, Cryptocurrency, and the FinTech World published by DV Books and distributed by Ingram worldwide.

Don't forget while you're waiting for your copy of “Victory or Death?” to arrive, check out our livestream Tuesday, it's 5 o'clock London, midday New York time it's the IPO Video live show. You can catch the back episodes on Linkedin and Youtube via IPO-Vid.

Most recently, we offered our Part II of 2023 A Review of The Year show.

Coming this week we've got From the Floor To The Future with Brad Schaeffer, an accomplished author.

Another great accomplished author is none other than Roger Lowenstein, his probably most famous book, it was certainly a national bestseller and an International bestseller was When Genius Failed: The Rise and Fall of Long-Term Capital Management capturing the gripping roller coaster ride of an epic fund entity. If you haven't got time to read the book, just remember PLY's contemporary recounting of the crisis: “LTCM had impeccably perfect maths, and alas the universe displayed slight flaws.”

Don't forget if you want all the bourse business news sent daily to your inbox. Think about signing up to Exchange Invest. Our sub rates have just gone up now at $375 per annum. Join the Exchange of Information and be amongst the markets, leaders, and visionary managers who understand what's going on in the parish of exchanges.

Meanwhile, if you want a free weekly edition, on a Saturday, we have our bigger macro read the EI Weekend. You can also sign up to that via ExchangeInvest.com and indeed, get a week's notice ahead of this podcast on what is our “Book of the Week”.

Technology news this week, Vermiculus, the Swedish upstart startup vendor has delivered microservice-based Vericlear Solutions to OCC (Options Clearing Corporation).

BMLL historical datasets are now available via the Snowflake marketplace.

At the same time, Equilend had a rather traumatic week coming days after they were taken over by a private equity firm. They were subject to a cyberattack and it took them several days to manage to get themselves reorganized.

Regulation news this week, SEBI is allowing promoters to offer shares via stock exchange mechanisms to staff.

The SEC in the USA has adopted new rules to enhance investor protections relating to SPACS, shell companies and projections.

Career paths, the OCC (Options Clearing Corp) has appointed former Optiver Executive Massimo Cutuli as Chief Financial Risk Officer-Elect who will succeed the current Chief Financial Risk Officer Dale Michaels upon his upcoming retirement.

Over at FINMA, the Swiss regulator, they've got a new boss, the government has selected Stefan Walter, a German national who was Director General of the ECB for the last decade to head the Swiss regulator which has been embroiled in some degree of controversy since the UBS Credit Suisse merger on the shenanigans relating to that.

Sad news in the crowdfunding, Seedrs have laid off 15% of their European workforce, as they withdraw from Spain and Sweden.

And finally, in career path this week, Horacio Velutini is the new President of the Bolsa de Valores de Caracas.

Speaking of something that may be rather Caracas, but hails from Europe, it's 25 years on from the original Euro currency launch - worth remembering it was a digital currency only for the first years of its life, without a blockchain, and yet, it worked…

Anyway, there were multiple things that we could say about in the 25th anniversary of the Euro, the fascinating point about the Euro, though, is that lots of people proclaim its magnificent ubiquity but…

When we look at SWIFT payments by country and currency in 2023, the data shows that the US is still way ahead with 47.08% of all payments. The Euro despite being the unified currency of at least 27 nations and a few other stragglers besides, weighs in at less than half this at 22.95%.

That sounds rather encouraging that it's more than a fifth of the world's payments after 25 years. But think about it another way, the dear old Great British Pound comes in third in global payments at 7.15% usage for SWIFT payments. Given the 20 plus nations of the Eurozone, which includes France, Germany, Italy, and Spain… doesn't it seem a bit puny (even before we factor in the states/stateless that are also using the Euro like Kosovo) that the Euro is only slightly more than 3x the amount of payments from the GBP despite encompassing more than 20 countries?

What's worse is, analysis by the European Centre for International Political Economy, as reported in the Telegraph, has found the GDP per capita in 14 EU member states, collectively representing 89% of EU GDP and all on the euro, they actually overall had lower levels of wealth than when the Euro was launched.

Pretty scary numbers to consider France and Germany were as rich as the 36^th and 31^st states in the US in 2000 but 21 years later, French GDP per capita is lower than the 48^th poorest state in the United States of America, Arkansas, while German GDP per capita had fallen to become no more prosperous than the 38^th state of the United States, Oklahoma.

And on that mysterious and magnificent note ladies and gentlemen, thank you for listening to this Exchange Invest Weekly Podcast #230. Join us daily via ExchangeInvest.com Or if you have a new exchange you’d like built, get in touch.

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

LINKS:

Crypto Lender Nexo Seeks $3 Bln In Damages From Bulgaria Over Aborted Investigation
(Reuters)

Robert F. Kennedy Jr Pledges To End US Efforts To Move Toward CBDC (CoinTelegraph

Asian Financial Forum: HKEX's Aguzin Underscores Hong Kong's 'Superconnector' Role, Says China, Rest Of The World ‘Massively Underinvested’ In Each Other
South China Morning Post

Inside The Perfume DAO That's Creating A 'Scent Of The Metaverse' NFT
(Decrypt)

Exclusive: LME Targets Hong Kong As Option For Warehouse Expansion
Reuters

The HKMA And The PBoC Announce Measures To Deepen The Financial Cooperation Between Hong Kong And The Mainland
HKMA

NSE Sees New Investor Registrations Hit 3-Year Peak In Dec, West Leads The Pack
Moneycontrol

SIX Group Considers Bid For Allfunds, No Offer Imminent -Sources
Reuters

South Korea Considers Shaming Companies Into Boosting Valuation
Yahoo Finance

SET Reveals 3-Year Strategic Plan To Raise Confidence In Thai Capital Market
Thailand Business News