062 Exchange Invest Weekly Podcast 12 September

TRANSCRIPT

This week in the parish of bosses and market structure, ICE close the Ellie Mae purchase. And Thoma Bravo are selling ICE stock from that Ellie Mae deal in a follow on offering.

Meanwhile, Aquis exchange edges into profit as expected.

My name is Patrick L. Young. Welcome to the Borst business. Weekly digest.

It's the Exchange Invest Weekly podcast.

In this, ladies and gentlemen, the era where the water cooler has had many, many fewer users over the course of lockdown times, even if you're returning to the office: news flow, information flow is key. Just let me add this podcast is a very brief reduction of the key headlines from the week in market structure.

All of the analysis of the week’s many events and happenings can be found in Exchange Invest’s daily subscriber newsletter: the unique guide to the bourse business, sent daily to your inbox. More details. at ExchangeInvest.com.

“Controversy from the SEC”. Well, common bedfellows, those words, I suppose.

...Shrouding money managers in secrecy: The SEC is proposing an amendment to the form 13 F that would eliminate most investment managers’, quarterly filings. I can see the ‘money logic’ of the SEC’s inflation shuffle here, but surely in an age of spreadsheets and all that digital desktop malarkey, it's easier than ever to disclose what your holdings are?

...Curiously analogue move by the SEC, which seems to be clumping down on issuers to provide ever more detailed data on the other side of the coin.

Elsewhere, BMLL, sponsors of Exchange Invest: They won the best data service application using cloud technology at the 2020 HFM European technology awards.

...Wearing presumably a virtual bow tie and tuxedo, Paul Humphreys was there, well virtually, to collect the award on behalf of the BMLLl team.

Elsewhere, Robin hood, they're facing multiple SEC investigations as we first trailed last week, into their business practices. Those investigations are from the SEC and indeed also the regulatory body FINRA.

As I have repeatedly noted for years, this was highly likely. The weird thing is what took these regulators so long to get their acts together. Fair enough, it must be a baptism of fire for their new general counsel, the former SEC commissioner, my old friend, Don Gallagher... At the same time. Also many have pointed out the fact that well, a $10 million fine is surely only a drop in the ocean to Robin hood.

...But I would argue if it opens the flood gates to greater and greater litigation, what can the class action mavens actually do to Robin hood given for many years, it's claimed to be free when it's actually been selling your order flow elsewhere?

“FQR” that's the first question, Richard Repetto of Sandler O'Neill has reduced ratings for this CME.

That's a very bad sign. Will CME punish him by stopping him from running first on the road at the next earnings call when it's open to questions? Frankly, could be the highlight of the earnings call if it's as syrupy as the last one.

Ratings news: B3 Brazil, Bolsa, Balcao: Moody's have announced the completion of a periodic review of their ratings.

No change there just as there was last week with ICE. Indeed. Equally Liquidnet holdings: Moody's announced their completion of a periodic review of ratings. no action on ratings. And that reminds us that there appears to be, well, inaction on the bids for the Liquidnet business, having issued debt to get rid of its PE shareholders some years back. The business was on the block at an auctioneer's estimate of circa a billion dollars, which was a lot lower than Liquidnet at its peak. I must admit to not being surprised the bidding has been so lukewarm: Liquidnet may be just a market leader if you squint and add the more emollient KPIs, but the truth is the business failed to heed warnings of what it needed to pay attention to BIDS BATS or CBOE whatever it's called - Large In Scale? - whatever that thing is...Anyway, the. Up and coming and indeed rapidly arriving on the rails fast moving block trading venue in Europe using the US bids technology. That was a hammer blow to Liquidnet when they simply refused to believe that this could ever happen to their European cash cow. Margins are in decline across the board and the block businesses now pretty mature.

There's more, but while it justifies the ratings position, it is perhaps unsurprising that Liquidnet bidding has not been more brisk when the company tried to sell itself in recent months.

in Results news this week, the Ho Chi Minh stock exchange in Vietnam: They increased their profits by 19% year on year in the first six months to 238 billion local dollars, which is 10.3 million US dollars.

Aquis Exchange, they've nudged into profit as they were anticipating for the six months to end 30th of June, 2020 Bravo to Alasdair Haynes and the team: revenue increased 42% to 4.9 million pounds compared to 3.4 million in the first half of 2019.

EBITDA therefore reaches 0.54 million versus a first half of 2019 0.18 million. With integration synergies ahead of plan for the NEX exchange, which was originally amongst other things, Plus markets. That purchase is starting to look very encouraging, and these are great results for Aquis and its future.

In Deal's news this week, Intercontinental exchange, they've completed the acquisition of Ellie Mae from Thoma Bravo. And indeed with that $11 billion, Ellie Mae deal finalized. ICE can prepare to unleash a fully digital mortgage ecosystem while meanwhile, a secondary issue has been announced through the Intercontinental Exchange itself by the selling stockholder Thoma Bravo. Given that ICE stock promptly closed up 2.42% on the news, a bigger gain than any other major bourse group during the course of Wednesday's trading... that brushes off the worry about the overhang of the Thoma Bravo stick. And presumably Thoma Bravo, can manage to seek the cash to distribute or reinvest at, at least the book value of the stock, or possibly even a marginal premium.

The Minneapolis Grain Exchange, their membership has approved the demutualization of the Exchange ahead of the merger with Miami International Holdings. Elsewhere, the Financial Times was noting the test of Rome's appetite for intervention in the hometown stock exchange issue. Where of course the London stock exchange is seeking to divest a profitable asset in its rather crazed quest to acquire Refinitiv.

Elsewhere, the Swiss exchange SiX, they have exercised the squeeze outright for the remaining BME shares undergoing to therefore be delisting the company, which I still think may be a strategic error in the future.

Good news for the LSE. In part, at least, the European Union they've come back from their holidays and presumably having left the bucket and spade in the wardrobe cupboard, they're now looking once again at the Refinitiv deal probe, a decision expected by December the 16th.

In new markets, Egypt will launch a commodity exchange for wheat vegetable oils are rice and sugar in the early part of 2021 elsewhere. The Long Term Stock Exchange, a marketplace in the United States of America, driven by an afterword in “The Lean Startup” book years back, Eric Reis's brainchild for a long term holding stock exchange has now launched.

That's of course in the midst of a very exciting September, the Members Exchange MEMX will begin its phase launch on September the 21st and the Miami Exchange owned Pearl equities will open on September the 25th.

While you're waiting for those stock exchanges to open, or if you were looking for some reading during what may be a continuing challenge of time, remember COVID-19 is a killer.

How do you possibly fight back in this digital age? Well, try understanding the dynamics of FinTech through my new book, “Victory Or Death, blockchain cryptocurrency, and the FinTech world”. An easy read, explaining the differing and diverging roles of banks and exchanges. And how the winning business models of the new world order will place digital markets in context.

...And therefore provide us with perspective on just what Bitcoin, blockchain and cryptocurrency mean for markets. Following up on my original trailblazing first best seller of the FinTech genre “Capital Market Revolution!” in 1999. Remember ladies and gentlemen, it's a binary world. Your career will sustain or collapse in the next stage of digital markets.

And it's 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 distributed by Ingram world wide.

Meanwhile, while you're waiting for that to arrive, next Tuesday, the 15th of September “from Brussels without love.” There's the headline. We've got the first of our second series of IPO video live streams: former MEP and longstanding capital markets specialist, Jake Pugh. Don't miss it. That's coming Tuesday, 15th of September, 1800 London time, 1300 New York time. On a live stream near you, namely Facebook, LinkedIn, and YouTube.

Meanwhile, in crypto land this week Binance have continued their ready running stream of memberships this month. I mean, the memberships of different industry bodies, despite being an apparently itinerant, or at least an entity with an undisclosed HQ. The crypto exchange Binance has now joined a third industry lobby group in no less than three weeks.

It's now joined blockchain for Europe, which is a first in two ways. I haven't actually even heard of it before. Let alone, before Binance joined.

In product news this week the Nifty 50 Singapore trades are ready to move to GIFT city in Gujarat. That ends a long standing disagreement, which was provoked by crazed Indian regulatory protectionism. The special purpose vehicle, therefore is a new exchange in GIFT city, the Gujarati international financial center, overseen by prime minister Modi, who is himself, of course from Gujarat.

What a coincidence there in that financial center, we're going to see this SPV between Singapore exchange SGX and the National Stock Exchange of India. The owner of the Nifty 50 brand itself. They're going to be trading futures and options which will be open to the world. They're similar to the existing SGX product, which has been pushed into this new arrangement through that rather embarrassing spate of Indian protectionism, full marks to SGX.

They stood their ground and ended up at least with a shareholding in this new venture. Elsewhere Singapore exchange are aiming to become Asia’s benchmark for Bitcoin pricing while in the Middle East, the Saudis fresh from the successful launch of their Tadawul, exchange, traded derivatives market and clearing house, MUQASSA, ...the Saudi regulator: they've announced they're going to open debt instruments in the kingdom to foreign investors.

Technology news this week, there've been some fleeting attacks once again, on the New Zealand stock exchange website, those are signs of hacks which have been ongoing, an ongoing theme of the last few weeks. However, trade has continued.

Elsewhere IHS Markit and the Tokyo Stock Exchange are going to combine their data sets, creating a unique Japanese security finance pool of data.

In people news this week, the Hong Kong exchanges they've appointed a new group Chief Risk Officer.

John Killian is retiring and Credit Suisse veteran Richard Wise will be moving from his Asia Pacific berth in Singapore, over to Hong Kong to take up the post in November.

Elsewhere RIP lady judge who as Barbara Singer Thomas was named an SEC commissioner by President Carter in 1980 and more recently, Lady judge had been serving on boards, such as Liquidnet and most recently the Astana Financial Services Commission until just before her death from pancreatic cancer.

In endpapers this week. Well, a tale of two fintechs. In Poland, Allegro their private equity owners are trying to list the Polish equivalent of eBay. However, the efforts that they're pressing ahead with may yet hit a buffer because the Polish regulators are investigating the auction site Allegro over the fees that they're charging to the users. That potential bump in the carpet contrasts with efforts in China, to make sure that Ant Financial can reach the STAR market as soon as possible... everything being thrown, but the kitchen sink... possibly including the kitchen sink! ...in an effort to make sure that the Ant financial IPO can go ahead in the next few weeks.

And on that mysterious under magnificent note, ladies and gentlemen, my name is Patrick L. Young. Thank you very much for joining this the 62nd Exchange Invest Weekly podcast. I'll be back daily in the Exchange. Invest Newsletter: ping us an email via ExchangeInvest.com... We’ll be happy to add you for a free trial so you can understand all the bourse business news that's fit to pith, as it happens every day.

Thanks for listening. Have a great week in markets. My name is Patrick L. Young.

LINKS:

How A Controversial SEC Proposal Could Shroud Money Managers In Secrecy

Business Insider

BMLL Wins Best Service Or Application Using Cloud Technology At The 2020 HFM European Technology Awards

BMLLTech

Robinhood Facing Multiple SEC Investigations Into Its Business Practices

Forbes

Q3 2020 EPS Estimates For CME Group Inc (Nasdaq:CME) Lowered By Piper Sandler

MarketBeat

B3 Sa - Brasil, Bolsa, Balcao -- Moody'S Announces Completion Of A Periodic Review Of Ratings Of B3

Yahoo Finance