102 Exchange Invest Weekly Podcast July 10th, 2021

Transcript

This week in the parish of bourses and market structure:

As Wise comes to market in London, the RobinHood bandwagon is rolling along. How much is the meme-meister of Payment for Order Flow (PFOF) worth?

While over in Cryptoland, the Binance Crackdown continues. And back in London, the death of the financial centre has been exaggerated once again...

My name is Patrick L. Young,

Welcome to the bourse business weekly digest.

It's the Exchange Invest Weekly Podcast Episode 102.

Good day ladies and gentlemen, this is a very brief reduction of highlights amongst the key headlines from the weekend market structure. All 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.

London reclaims top trading status from Amsterdam trumpeted rather the their headline in the Financial Times the other day... as that permanent move of liquidity to the European Union looks to have been somewhat of a chimera.

Had “the Brussels Bugle” been credible at any time in the past five years + with its Brexit coverage, then we could have clearly perceived the city streets of London now resembling one of those tension building Sergio Leone spaghetti western scenes, where a wisp of straw wheedles along in a light breeze or lifting sand in its stead.

However, rather than resembling Dodge City redux, the simple truth is the City of London is resilient, and a fair whack of business headed to the EU while waiting to find the path of least resistance has promptly bounced back. That it returned within mere months ought to be a humiliation to the shameless dullards who have always seen Brexit as a British disaster zone. But having been consistently wrong to date, why should we expect the stubborn to stop now?

Another Brexit scare story dies. The shameless incompetents ride on blithering doom without substance... Next up back to the Harridan Irish EU Finance Chief and her endless threats which can only be credible when married to a very low brow understanding of how finance actually works.

Meanwhile, with the new new thing garnering increasing headlines, the European Union moves at the pace of a knackered pachyderm:

EU Crypto Regulation Goes Live In Three Years went the headline in Finance Feeds this week.

Reasons why Europe’ EU project dies volume umpteen. Another three year wait for crypto regulation is simply ludicrous and leaves the European Union 27 once again in a super slow lane of innovation.

I mean, the only positive here is that it's not a decade-long wait with an ultimately unsatisfactory series of results (“dog's dinner” being I think the technical term in Brussels wonk speak) which has been the case in crowdfunding.

Why do we really need a Markets in Crypto Assets Directive (which I suppose is MCAD).

Personally, I would have preferred Markets in Crypto Related Asset Products. But anyway, why we need this three year delay for such a Markets in Directive is a whole separate area for debate. But the European Union has never met an innovation it can't regulate into oblivion.

Via Beijing to the USA, a lot has been made during the past week of the Chinese regulatory intervention into Didi Chuxing apparently over cybersecurity issues within hours of its successful New York IPO.

Chinese regulatory interventions have significant potential to impact markets around the world, which is one issue. But at the same time, the Wall Street Journal made clear in this story this week that Chinese regulators didn't seek to destabilize the US market, they were asking Didi to delay their IPO due to the accusations pending.

That - given a 19% share plunge just after the Independence Day holiday last Tuesday alone - strikes me as a very large open door upon which the massed ranks of the US legal fraternity and likely, Gary Gensler’s colleagues at the SEC will be rushing through to deliver all manner of legal actions and impediments, respectively.

Meanwhile, in a suggestion the Chinese regulatory crackdown could be bad for public markets all the same. Reuters ran an exclusive: Weibo Chairman, State Firm are planning to take China's Twitter private.

Back in the USA, the swingeing $70 million record fine of RobinHood by FINRA helped us appreciate just why the “no commission” (one might add no commission ‘by obfuscation’) broker opted to delay its IPO during the course of the past week or two. However, with the fine paid...

Just like Coinbase before it, RobinHood promptly made big noises that its IPO is back on, which some say is shaping up to be a $20 billion listing valuation.

Meanwhile, in London, biggest FinTech IPO there, ever, in fact, biggest tech IPO there ever, as the FinTech giant Wise (formerly known until a month or two ago as Transferwise) went public in a Spotify style direct public offering.

It was a big test for London and London sailed through $8 billion dollars being the market cap at the end of the first day's trading, marking an excellent week for the London Stock Exchange group.

Meanwhile, in results:

We saw the rise of domestic retail investors’ helping increase profits of the Indonesian Exchange (IDX) by 9.5%.

In new markets this week:

Great news from the Global Stock Exchange Group, one of the world's leading players for driving next generation capital markets infrastructure, they've invested in CSX Limited in Hong Kong.

With the Channel Islands Stock Exchange now taking the moniker “International Stock Exchange” as briefly favoured by the LSE way back when, now Gibraltar Stock Exchange's parent company is taking the “Global Stock Exchange” brand by osmosis - or at least I suppose we could call it a G-swap.

Don't forget ladies and gentlemen, if you're looking towards a holiday this month, if you're in quarantine or perhaps you just locked in a queue trying to get through the airport in order to manage to go somewhere, arrive somewhere, show your PCR test or prove that you're vaccinated.

Don't forget to pick up some reading “Victory or Death” - Blockchain, Cryptocurrency and the FinTech World, that's been my latest tome, which came of course, 20 years on from the excitement of the original FinTech bestseller “Capital Market Revolution”. And indeed Capital Market Revolution marked just last week, not merely its 20th anniversary, but in fact it's 22nd anniversary since publication.

It's a binary world your career will sustain or collapse in the next stage of digital transformation, 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 it's distributed by Ingram world wide.

In Cryptoland this week:

When the dust started to clear it felt a bit like we had witnessed a first wave of Binance crackdown.

Japan and Singapore appeared unhappy with the crypto exchange of no fixed abode. While the Cayman Islands banned it - probably not a huge impact per se, but the UK gave the platform a short shrift, and that began an unravelling of some banking services too. First from the UK cards giant Barclays, and subsequently, at one point in time, Binance had to temporarily suspend in their own words, payments from the European Union's entire SEPA network.

In product news:

The National Commodity Derivative Exchange (NCDEX) of India launched two new Indian agri-indices, while Sofia's Bulgarian Stock Exchange launched the International market powered by Deutsche Boerse’s T-7 system.

“Confusion reigns as the US prepares for Libor’s end” went a credible headline in Risk Magazine and the European Union threw its weight behind new Green bonds standards.

In regulation:

The British Chancellor of the Exchequer (that's the finance minister to you and me) Rishi Sunak is promising to sharpen the city of London's competitive edge. That of course coming in the same week that the UK managed to wrest back the majority of business in European Union securities.

In career paths this week, people news:

Martin Maloney has been named as the IOSCO Secretary General.

And we had the sad news that the founder of Telerate Neil Hirsch died at the age of 74.

Dow Jones had of course sold Telerate to Bridge Information Systems, which famously imploded in 2000 A.D. and was thereafter divided between Reuters, SunGard and Moneyline.

The Cyprus Securities Exchange, the regulator there, they're searching for a new boss, If you're interested.

As is indeed TP ICAP, they're on the search...not for a new boss but they're looking for a head of investor relations.

Perhaps this is the job ad of the century in the parish of bourses and market structure. TP ICAP seeks a ludicrously qualified individual to become a head of their secret police, oh, no, sorry, to run their investor relations albeit frankly experience in, say, the KGB or the Stasi during the Warsaw Pact era would be sublimely helpful, as the role appears to revolve around ensuring the analysts / investors understand “your truth” and nothing but “your truth”.

Frankly, the levels of delusion from the utterly discredited C-suite and board of TP ICAP knows no bounds. This advertisement would be laughable in any listed company. In a regulated listed company it just looks absurd.

Speaking of the absurd: Duncan Niederauer (Duncan, “the value destroyer”) who ran the NYSE ...some say almost into the ground. A former Goldman Sachs banker with, well, a chequered pedigree in M&A over the long term. Duncan Niederauer is on a steep learning curve, the News reported this week as he runs the club from Venice preparing to play in Serie A football (the Italian Premier League no less) when the season starts next month.

It's a move perhaps beyond parody, even for what has been a highly lucrative path of career ladder inflation cum failure in the actual entities he ran. Duncan, “the value destroyer” is now involved with a Italian soccer. Expect the popularity of say rugby or cricket to skyrocket? Oh, yes, sorry, we should offer the benefit of the doubt clause ‘past performance, yada, yada, blah, blah, and all that, as if this time might be different…’

Meanwhile, there was quite a fanfare over the inauguration of the Israeli Embassy in the United Arab Emirates, (Israel told the region: ‘We're Here to Stay’) including the new Foreign Minister Yair Lapid appearing in the UAE on his First Official Visit, a less documented side effect of the wonderful Abraham Acords is that the UAE’s embassy in Tel Aviv Israel is temporarily located in the Tel Aviv Stock Exchange building.

And on that mysterious and magnificent note ladies and gentlemen, my name is Patrick L. Young.

Join me Monday through Saturday for the Exchange Invest daily newsletter. More details on how you can sign up for a Free Trial at ExchangeInvest.com.

All it remains for me to say is, I wish you a great week in life and markets.

LINKS:

London Reclaims Top Trading Status From Amsterdam
Financial Times

EU Crypto Regulation Goes Live In Three Years
FinanceFeeds

China Launches Review Into US-Listed Chinese Tech Companies
The Wall Street Journal

China Takes Aim At More Tech Firms, Hours After Action Against Didi
South China Morning Post

Didi Shares Plummet After China Bans It From App Stores
CNN

Didi Crackdown Shows 'Beijing Wants Greater Control'
RTHK

Didi Handed Bosses Stock Options Worth Billions Before IPO
Bloomberg

Chinese Regulators Suggested Didi Delay Its US IPO
The Wall Street Journal

EXCLUSIVE-Weibo Chairman, State Firm Plan To Take China's Twitter Private -Sources
Nasdaq

Robinhood Files To Go Public. What to Know.
Barron's