September 19 2014

elb2

LME Clear is on the launchpad for Monday while a packed field seeks to run the London Gold fix, probably delaying any decision, just as the Shanghai Free Trade Zone based Gold Exchange launches early. Alibaba priced so high it’s difficult to calculate without your neighbours fingers and toes and then some, while a new Scottish Stock Exchange seems less likely amongst somewhat bleary souls north of the West Lothian Divide still sponsored by the Barnett formula. In India, ICEX revival planned, IFCI NSE stake sale is on with three bidders as FMC and NSEL continue to argue in the eye of the forced merger storm while MCX-SX sues BSE over predatory (free) pricing.

Meanwhile as the Bravehearts of Scotland turn out to be whinging ninnies, the braveheart cry from BATS Europe is one of overpriced exchange data hindering the market’s development, to which I have added max-pith…

…Plus a few snippets more from all corners of the globe, besides as I said above, my pith on data comes later in the piece and that will amuse / entertain / intrigue or just make your blood boil depending on where you sit in the food chain – happy scrolling:

Oh but first, when I was in London on a startup safari, I recorded these comments about Bitcoin during the summer, happy viewing: Patrick L Young: The Future of Money is Cryptocurrency

Public Markets

LME Clear Gears Up For Monday Launch
Luke Jeffs – FOW

LME has confirmed it will migrate clearing to its new LME Clearservice this weekend.

At Least 15 Firms Seeking To Run New London Gold Benchmark
Reuters

At least 15 companies have expressed interest in replacing the century-old London gold benchmark, with a new system seen in place by the end of 2014.

PLY: CME and TR are seen as favorites to manage London gold fix, after they recently won the rights to manage the daily silver fix although this field looks very competitive and it is likely the expected October decision date may be pushed back.

Icap Exits Australian Agricultural Trading
Colin Packham – Daily Mail

PLY: The former MF Global Oz softs team moved to ICAP post Corzine apocalypse but a recent turndown in Oz ag future volumes has encouraged ICAP to look at other opportunities.

Alibaba’s IPO Priced At $68 A Share (subscription)
Telis Demos & Matt Jarzemsky – Wall Street Journal

Alibaba’s shares priced Thursday at $68, at the high end of expectations. The IPO will raise at least $21.8 billion.

Private Markets

SGE Launches International Board (subscription)
Chuin-Wei Yap – Wall Street Journal

Shanghai Gold Exchange launched its international board on Thursday night, based in Shanghai’s new FTZ.

Initially China announced this week that it will launch the international board of SGE at the end of this month.

MCX-SX Likely To Take BSE To Court Over Competitive Pricing
Moneycontrol

According to sources, BSE which is currently not charging any fees on trades in currency derivatives is a big reason why the volumes of MCX SX which charges Rs 110 per crore of turnover have been impacted.

PLY: Interesting case, although outside India alone there are many precedents of predatory pricing – DTB/LIFFE both waived charges during the famous battle of the Bund while CBOT was never going to reduce pricing – no siree – until the eve of the EUREX US T Bond launch at which point it slashed fees… MCX-SX remains a fading asset which needs a revolution in management approach to exploit the advantages before it:

MCX-SX Lives To Fight Another Day, But Will It Survive?
Moneycontrol

This week, Sebi granted a one-year extension to India’s newest bourse, MCX-SX, along with riders, but questions remain over whether it can continue over the long haul.

Expect To Complete NSE Stake Sale By Sept 30: IFCI
Moneycontrol

Malay Mukherjee, CEO & MD, Industrial Finance Corporation of India (IFCI) confirmed the company has received three bids for its 2.5% stake in NSE (reported yesterday) with the process expected to be concluded by September 30.

PSE Suspends Trading Due To Tropical Storm Mario, Habagat
Danessa Rivera – GMA News

Trading on the Philippine SE (PSE) was suspended Friday due to torrential rains brought by Tropical Storm Mario (Fung-Wong) and the southwest monsoon.

ICEX Shareholders Attempt To Revive Commodity Exchange
Dilip Kumar Jha – Business Standard

Indian Commodity Exchange (ICEX), the commodity derivatives trading platform which had frozen operations since April, plans to revive itself through a capital infusion from existing shareholders.

At a meeting last Friday of its board of directors, a resolution was passed in this regard, said Sam Ghosh, chief executive officer of Reliance Capital, which has 26% stake in the exchange. “The capital infusion from existing shareholders will be in the proportion of their stake,” he said. “We are also in talks with some players to get capital infusion from outside.”

PLY: Good luck to ICEX reviving their moribund market – there are ample opportunities in India (as elsewhere)!

No Plans To Privatize Egypt Stock Market: Chairman
Mohamed Abdu Hassanein – Asharq Al-Awsat

There are currently no plans to privatize Egypt’s stock market either in the near or distant future, according to Chairman of EGX Mohamed Omran who added that it was unlikely any such plans would materialize “in the next 25 years.”

PLY: Disappointing.

Special Section: FTI, NSEL, India at the Crossroads

PLY: Uber-flat day for MCX and FTIL, as the FMC continues to berate NSEL and vice versa:

FMC Censures NSEL For Misleading Public On Dues Recovery
The Economic Times

FMC has pulled up the scam-hit NSEL for making “deliberate” efforts to mislead public about progress made in the recovery of over Rs 5,689 crore dues from defaulters.

Vested Interests Behind FMC’s Call For Merger, Alleges NSEL
The Economic Times

Stating calls for merging NSEL with its promoter FTIL as legally untenable, crisis-hit NSEL said vested interest groups caused the commodity market regulator FMC to make such a suggestion.

PLY: There are a great many (qv my Twitter feed @FrontierFinance) creditors deeply frustrated at the stasis in the NSEL fiasco. I have considerable sympathy here but short term regulatory fixes with vast ramifications for corporate governance are not the way forward.

Technology

NYSE Tests Systems, To Brief Investors Before Alibaba’s Debut
Reuters

NYSE tested its trading systems over the summer to make sure Alibaba’s market debut on Friday goes without a hitch, after the Chinese e-commerce company’s IPO raised $21.8 billion.

PLY: In the nicest possible way, the folks of NYSE are exhibiting a modicum of methodical paranoia ahead of the Alibaba IPO. Whether it has got to the superstitious level of banning the management wearing polo shirts is not recorded but it is good to see the NYSE taking all feasible precautions.

Beware European Market Data Smokescreen (subscription)
Mark Hemsley, Richard Metcalfe, Rudolf Siebel & Helle Søby Thygesen – Financial Times

PLY: Exchange data is too expensive goes the argument and hence the European market landscape is not being helped. A laudable approach – for me the worry goes much deeper: market data which ought to be viewed as a temporary source of revenue that will erode over time, has instead become a crutch to prop up profits. That is unsustainable although the worrying issue is that the EU probably cannot manage to develop a system other than some horrible bureaucratic top down clunking fist response which – like much of the great waste of time which is MIFID II itself – probably won’t really help.

Data is the lifeblood of markets and ultimately legacy exchanges are only deluding themselves in charging so much for it.

Products

SGX To Offer More Asian FX Futures Contracts
Anita Gabriel – Business Times

SGX is adding new Asian FX futures contracts to augment its suite of FX offerings which will be available for trading from Oct 20. Bank of China will be the first Chinese settlement bank for its derivatives market as well as the market-maker for its yuan futures. SGX press release here.

NSE Eyes Trading Of Multi-Currency Bonds
James Anyanzwa – Standard Media

Plans are underway to introduce trading of multi-currency denominated bonds on the Nairobi Securities Exchange (NSE), paving the way for the Government’s $2 billion (Sh176 billion) sovereign bond listed on the Irish Securities Exchange to be cross-listed on the NSE.

EEX Exchange Council Approves Introduction Of Inter-Product Spreads
MondoVisione

EEX approved the introduction of Inter-Product Spreads on the T7 trading system, which will enable trading participants to trade price differences between different delivery areas. The three biggest European power markets (Germany, France & Italy) are to be connected as a first step.

Object Trading Provides DMA To ICE For NYSE LIFFE UK Derivative Products
Automated Trader

Object Trading announced it has received certification of conformance to the ICE for UK derivative products.

FSB Publishes Feasibility Study On Aggregation Of OTC Derivatives Trade Repository Data & Announces Next Steps
MondoVisione

Career Paths

MV reports that EEX appointed Timothy Neil Greenwood as an additional MD of the Exchange, in addition to Steffen Köhler and Dr. Tobias Paulun. Timothy Greenwood has been the Head of Sales Power & Emissions at EEX since 2009 and joined the company more than ten years ago.

Dr. Heiko Sanders, CFO, EWE Aktiengesellschaft, succeeded Raimund Otto, who resigned from the Exchange Council at the end of August. Additionally, Namesh Hansjee, Paul Goodhew and Brieux Raskin also resigned from the Exchange Council in the course of this year. Therefore, the Exchange Council elected Nicole Hildebrand, VP, Commodities, Morgan Stanley, and Raphael Brun, Head of European Power, Citigroup, as their successors as representatives of the group comprising banks and financial service providers.

SEC announced that James R. Burns, Deputy Director in the Division of Trading & Markets, will leave the agency in October.

Financial Calendar

Today

CBOE $0.21 quarterly dividend payment

Next week

ASX 89.9c dividend payment
CME $0.47 quarterly dividend payment
LSE rights issue – Final day for acceptances and the rump placing
NASDAQ OMX $0.15 quarterly dividend payment

All forthcoming exchange / investment related events are now listed in our Events page.

Share Notes

ICE General Counsel Johnathan H. Short sold 3,505 shares Monday, September 15th at an average price of $195.00 (bargain $683,475.00). He now owns 11,741 shares. All ICE insider stock transactions are chronicled here.

ICE Director Judith A. Sprieser sold 1,813 shares Tuesday, September 16th at an average price of $194.34 (bargain $352,338.42). She now directly owns 3,062 shares. All ICE insider stock transactions are chronicled here.

Charles Schwab EVP James D. Mccool sold 35,000 shares Wednesday, September 17th at an average price of $30.10 (bargain $1,053,500.00). He now owns 84,905 shares.

Interactive Brokers SVP Milan Galik sold 1,800 shares Tuesday, September 16th at an average price of $25.17 (bargain $45,306.00). He now owns 721,217 shares. Mr. Galik’s regular sales are chronicled on this specific page.

Analyst Notes

ICE “Outperform” Rating Reaffirmed By Keefe, Bruyette & Woods – $225.00 Price Target
AlphaValue Reiterated Their Reduce Rating On LSE – GBX 1,783 Price Target
CME “Outperform” Rating Reiterated By Keefe, Bruyette & Woods – $90.00 Price Objective
Credit Suisse Upped Their Price Target On Betfair From GBX 1,085 To GBX 1,200 – “Neutral” Rating

ICE Enters Overbought Territory
Zacks Equity Research

ICE has moved higher as of late, but there could definitely be trouble on the horizon for this company. That is because ICE is now in overbought territory with an RSI value of 74.

A full table of current analysis can be found on our Analyst Ratings page which is updated daily.

All Analysts, Banks and Brokers are welcome to contribute to this section.

Crowdfunding

SeedInvest Strikes Deal To Widen Its Reach
William Alden – NY Times

SeedInvest announced on Thursday that it would partner with Gust, a 10-year-old network that includes thousands of angel investors, in an effort to expand its reach.

Other stories

SEC 2014-2018 Strategic Plan
MondoVisione

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