September 21 2016

elb2In Today’s Exchange Invest


Jignesh Shah has been arrested. Does the Indian justice system aspire to be third time lucky?


ASX on notice from government, Crest celebrates 20th anniversary, ICAP is indeed the prettiest date at the prom while IEX are seeking listings. NSX trails $6.7 valuation ahead of IPO, and there’s more, including Andrew Hauser’s well-received speech to the event celebrating 20 years of the UK’s Crest CSD system.


In Bigworld


Meanwhile in Bigworld, Angelina Jolie is divorcing Brad Pitt…you mean to say they were married? Gosh they kept that quiet.


Seriously, though, who would have thought assassin movies could be so perilous to marriages?*


*If you think this Bigworld intervention is needlessly simplistic, try the US campaign trail where last week’s discussions on a green frog have given way to Skittles candy apparently being Democrats, or something. Electoral politics can be arcane in their complication.



Public Markets

Indian Police Make Arrest In Widening Exchange Probe
CBI Arrests Jignesh Shah
The Hindu


PLY: A third arrest for the FTIL founder, sorry, 63 Moon man, will provoke another wave of ‘Shahdenfreude’ in some areas of the parish while the plot thickens, as it appears there may be evidence linking even Sebi staff to the licensing of MCX-SX (now MSEI).


Spencer’s ICAP Seen As Next Deal Target In Exchange Merger Boom


PLY Zero surprise to advisory clients here. You have heard this message for years and the TNT deal only provided the pure pricing impetus. NEX is now like an investment trust trying to raise its NAV discount to whatever may be paid for it. I think this stock is spectacularly undervalued still on a breakup pricing basis (which may be the story soon but for now folks are just spotting the macro possibility).


NB I don’t think anybody wants to break NEX up but if you start valuing the sum of the parts it is a bit like DB1 without the monopoly incumbrance of LSE, albeit Michael Spencer is actively working to enhance value in his business. Clients will recall the core questions arising on the future of NEX/ICAP – my thoughts continue to develop here.


QV In March, Premium discussed the The Deal The LSE Ought To Do


ASIC Confirms Investigation Into ASX Trading Failure As Outrage Mounts
The Australian Financial Review
Traders & investors Furious Over Monday ASX Technical Glitches
International Business Times AU
Treasurer Scott Morrison Puts ASX On Notice After Meltdown
The Australian


PLY: Fair dinkum disasterwatch day 3 opened with the fascinating intervention from the Treasurer Scott Morrison. That Mr Morrison also oversees the agency whose technology resulted in the Australian census being about as smooth as a process carried out by a drunken possum is a sideshow (albeit saying something about the broader hypocrisy of the political classes). However the undertones here are clear: ASX cannot rely on the old conviviality of times past and the monopoly is now under threat – due ultimately to its own petard hoist repo transaction.


Moving Euro Clearing To Continent Would Be Huge Task – ISDA


PLY: Am I alone in being reminded of of the Werner Herzog classic Fitzcarraldo when we hear stories about Euro clearing moving to the continent?


Brexit Backer Says Bank Freedom Starts With Embrace of EU Rules


PLY: Article also features ICE CFO Scott Hill but centres on the cerebral Jacob Rees-Mogg, MP and fund manager who essentially adopts a ‘best of frenemies’ approach – comply with MIFID II now, with future pragmatism.


DTCC to Reduce Trade Repository User Fees For MAS & ASIC Transactions By Up To 20% – Growth In The Global Trade Repository’s User Community Enables Firm To Extend Cost Reductions To Clients Through Efficiencies Gained Via Utility Approach


PLY: After that headline what can one add?


Three International Banks To Set Up Shop At GIFT IFSC
Hindu Business Line


PLY: A vague link to CME via its MOUs is currently the only international exchange presence. Unsurprising, as noted when NYSE and LSE were said to be kicking the tyres of the development in 2015. Nevertheless GIFT City is material and has BSE about to launch a bourse there which is great progress.


TMX Group Updates Organizational Transformation
TMX Group Cutting 10 Per Cent Of Staff
The Globe and Mail


PLY: Messaging and communication is vital, particularly in the digital age (which makes you wonder why some of the largest exchanges are at best, clumsy, if not singularly inept at it). Whoever wrote the TMX release above…well their blushes should be spared alongside whoever thought it a good idea to release this dire missive. Once the body corporate has descended into management gibberish it is always a clear sign that the entity is in mortal danger from the top down.


Just what is going on at the top of TMX I know not. After reading their missive, nobody can.


However, I see Luc Bertrand has been buying stock recently and he is a man of impeccable excellence in the parish but the executive looks muddled, despite the talent to be found amongst the management ranks.


Private Markets

NSE IPO Values It At Rs45,000 crore ($6.7 billion)
India’s Biggest Bourse NSE’s IPO Values It At $6.7b


PLY: Good story by the Livemint team. For those talking liquidity event, this could be a golden one with an IPO price being trailed at 30 times projected FY 2018 earnings, or 2.5 times the last transaction (when State Bank of India (SBI) sold a 5% stake in NSE to Mauritius-based Veracity Investments Ltd for Rs911 crore, valuing the exchange at Rs18,200 crore last July).


At least 20% of stock likely to be offered (if this price is achieved it may be more as the payday ought to be great for my PE friends who have held this stock for some time).   Multiple a bit shy of MCX and also on a par with Helex and CBOE. For market cap, a $6.7 billion valuation would place NSE  9th in the publicly traded parish, just shy of ASX.


IEX Plans Corporate Listings On “Flash Boys” Exchange In 2017


PLY: IEX has a cachet which could make it a “people’s champion” in the country club wars of IPO listings…this will be a fascinating battle.


Ruling Nears On Chinese Bid For Chicago Exchange
Nikkei Asian Review
The Sale of the Chicago Stock Exchange
ChicagoNow (blog)


New Dynamic In HFT Wars: Intelligent Speed


Stock Exchanges Yet To Derive Benefits Of Demutualisation
Financial Express Bangladesh


Multinationals To Be Listed On Ghana Stock Exchange – SEC
Raising Equity On Capital Market Just Became Easier

Business Today


PLY: A brace of stories from Ghana.



Special Section: FTI, NSEL, India at the Crossroads


PLY: FTIL down 1% on Jignesh Shah’s latest arrest, MCX up 1.5%.




Eris & Cassini Systems Partner To Offer Margin Savings Analysis – Identify Margin Savings By Replacing OTC Swaps With Eris Swap Futures
PR Newswire


PLY: Fascinating stuff, and a good riposte to yesterday’s tales of non-transference of swaps to ETD proxies. Try it here: Eris Margin Optimization


Misys Unveils Platform-as-a-Service Strategy



Sebi Allows Comexes To Modify Futures Contract Specifications
Business Standard


PLY: Some welcome flexibility from the Indian regulator.



Career Paths



Forex Magnates note Sam Ruiz has become CEO of Institutional Services at Tullett Prebon while Financial News reports that Russell Investments Europe CEO Pascal Duval  has resigned.



Fig CEO Justin Bailey Wants To Change The Way We Crowdfund Video Games
Yahoo News


PLY: A kind of syndicate led approach which may help the management hiccups which plague game dev crowdfunding in particular. A sensible approach which will hopefully prove more successful than the status quo where many games are semi-interminably delayed.


National Crowdfunding Association of Canada Criticizes Integrated Crowdfunding Exemption
Crowdfund Insider



Other Stories



Speech by Andrew Hauser (Bank of England) at the Crest 2020 Settlement Event
Bank of England
PLY: And lo they came from far and wide to praise Crest, not to bury it. To a background of “Wannabe” by the Spice Girls (number one in UK when Crest launched 20 years ago), Mr Hauser’s speech drew a lot of plaudits from attendees.

ESMA Consults On Trading Obligation For Derivatives


Special Address By The Guest Of Honour Ybhg Tan Sri Dato’ Seri Ranjit Ajit Singh, Chairman Of Securities Commission Malaysia, The Malaysian Private Equity Forum 2016, “The Impetus For Growth And Innovation”, 20 September 2016, The Majestic Hotel, Kuala Lumpu

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