117 Exchange Invest Weekly Podcast October 23rd, 2021

Transcript:

This week in the parish of bourses and market structure:

NASDAQ results rock the week as DB1 has an outbreak of growth, and CBOE buys a digital arm in ErisX while in listings, Bakkt SPAC a Go Go, and Nigeria’s NGX is listed too.

My name is Patrick L. Young.

Welcome to the bourse business weekly digest.

It’s the Exchange Invest Weekly Podcast Episode 117.

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 during the course of the past seven days 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.

NGX listed its stock on its own Nigerian bourse this week, while Indonesia’s Commodity and Derivatives Exchange announced an intention to go carbon neutral while the Indonesian Stock Exchange pushed its members to educate potential investors.

Effective 6th December 2021, the opening of the Moscow Equity Market has moved to 6:50 am Moscow time. Russia’s primary stock market will thus run for 17 hours every day.

The LME (London Metals Exchange) has asked its members to be prepared in case the European Union cuts off clearing access due to its ongoing Brexit tantrums.. metals clearing is one worry but then again is the EU really serious about the single currency suicide approach that can play out if it takes a protectionist move against euro clearing and clearing houses in the world’s largest, most cosmopolitan financial centre?

Your loyal correspondent PLY, that’s me Patrick L. Young reports with joy that thousands tuned into ArawakX’s inaugural Ecosystem Investor Conference in Nassau, where 100 socially distanced folks were joined by viewers of countless numbers into their 1000s from around the Bahamas, and indeed far beyond the archipelago across the world. It was an honour to be the morning keynote speaker while my brilliant wife Beata Young rocked the evenings of session, discussing Women On IT as the lady sought to hack the future in diversity.

Don’t forget Wednesday evening, you can catch Beata’s PHD (Positivity Hacks Delivered). Coming to you on YouTube, Facebook and LinkedIn.

Meanwhile, back in the boss world, there was unfortunate news from Uganda this week where ALTX, the first privately owned Securities Exchange, was clearly in frustration being driven to seek an investigation into the Capital Markets Authority.

In results news this week, NASDAQ they reported a 17% increase in revenue for the third quarter 2021 compared to the prior year.

Excellent news as NASDAQ impresses again, and plaudits to Adena Friedman and her team.

Meanwhile, there was an outbreak of growth at Deutsche Börse. Is the previously becalmed DB1 going to maintain this streak of revenue growth after they increased net revenue in Q3 through secular growth and M&A by some 18%?

Interactive Brokers, they had a more mixed quarter diluted earnings per share were up $0.43for the quarter ended September 30, 2021 compared to $0.58 for the same period in 2020. At the same time, adjusted diluted earnings per share, rocketed to $0.78 for this quarter compared to $0.53 for the year ago quarter.

Speaking of asset values, interesting to hear that investor in the parish of exchanges par excellence Urbana Corporation, their net asset value per share has reached a new all time high, breaking through $7 per share.

It was a busy week for new markets in the parish of bourses, all the information was in Exchange Invest’s 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.

East African countries they’re looking to integrate their securities markets. Geoffrey Odundo, the CEO of the Nairobi Securities Exchange (NSE) has stated that Kenya, Uganda and Tanzania will soon be unveiling a digital platform linking the three securities markets.

Meanwhile, in Zimbabwe, very exciting news. The Victoria Falls Exchange (VFEX) which started trading US dollar denominated stocks just a few months back. They have exciting plans for a commodities exchange in partnership with Dubai’s Gold and Commodities Exchange (DGCX). Watch this space.

In deals news this week similarly a very busy news week for deals in the parish. All of those were in Exchange Invest daily. For the sake of highlights, here is a brief resume of key deals this week.

Silver Lake announced a strategic investment in Euroclear. They’re buying the Intercontinental Exchanges 9.85% stake. It was flagged by ICE in the last quarterly call that the Euroclear stake was up for sale. ICE therefore is not going to be part of the great game of rationalising European clearing and settlement. But Silver Lake has a fascinating opportunity to be either a spoiler of sorts… or a kingmaker.

Then again, ICE has sold out for 709 million euros ($821.7 million), and we know that their first stake of 4.7% was purchased for a mere 275 million euros. So it’s hardly stellar, but far from a loss of either. The five tiers of Belgian middle management doubtless sigh with relief in Euroclear towers, as they avoid being rationalized into efficiency for just a while longer at least.

Elsewhere, ICE had a busy week, they announced the completion of the merger between Bakkt and VPC Impact Acquisition Holdings. That SPAC stock promptly debuted on the New York Stock Exchange, having a troublesome first day dropping 6% on the public trading debut.

Elsewhere, the S&P-IHS Markit merger looks to be inching its way towards completion at last. European Union regulators are suggesting that they are at least in private conversation close to agreeing the deal while the UK Competition Markets Authority (CMA) said in public that they will clear S&P’s merger with IHS Markit, if competition concerns in certain commodity price assessments are addressed.

CBOE – they’ve jumped in and acquired ErisX, they’ve entered the digital asset space with a spot derivatives and clearing platform. Very interesting moves, CBOE adds a whole digital platform business to its multi asset and increasingly global offering.

Elsewhere rumours of a deal DFM (Dubai Financial Market), ADX (Abu Dhabi Exchange) and NASDAQ Dubai. Rumours have owned more than a decade on from when it was first announced that DFM, ADX and NASDAQ we’re merging in divided least. The idea has been brought to life again between the Emirates so that could be an interesting unification of Dubai Financial Market, Nasdaq Dubai and the Abu Dhabi Exchange.

Back in the Caribbean, ArawakX exchange whose conference of course, Mr. And Mrs. Young were speaking out just last week, they’ve been awarded $400,000 in financing from the Bahamas Development Bank in a push to increase crowdfunding investment across the Bahamian economy. Great news all together. And it was a pleasure to meet the Bahamian Development Bank just last week when we were in Nassau.

Meanwhile, if you’re looking for some reading, ladies and gentlemen, don’t forget “Victory or Death” – Blockchain, Cryptocurrency and the FinTech world. My latest tome is in shops now available via Ingram publishing on Amazon.com. It’s published by DV books.

Don’t forget IPO-Vid will be back on Tuesday evening. We’re gonna be talking to crypto dad himself the honourable J.Christopher Giancarlo, he’s going to be joining us on the day his book is officially published. So join us on Tuesday at 1pm Eastern, where we will be talking with the crypto dad, the honourable Christopher Giancarlo, the former chairman of the Commodity Futures Trading Commission in the USA.

Speaking of regulators, Coinbase, fresh from a tussle with the Securities and Exchange Commission. They’ve called for the creation of a new US regulator to oversee digital assets.

Probably difficult to see how the Biden administration which is already struggling to raise the funding for as many other extra programmes is going to find the additional cost to manage to create a whole new regulator on top of the SEC, CFTC et al.

In product news this week, a Euronext news, their Borsa Italiana arm has launched a new MIB ESG index. The index’s methodology, reflecting a ranking of the top 40 of Italian listed companies based on ESG criteria.

Finally, the week was over as well on the New York Stock Exchange, the first ever Bitcoin ETF debuted in what was described by the Economic Times as a ‘landmark moment’.

In Hong Kong, the Hong Kong Futures Exchange division of the Hong Kong exchanges, their new ChinaA shares 50 index futures created bourse history with the best single day launch in the history of the futures arm of the Hong Kong exchanges group. Nonetheless, they’re still lagging the rival in Singapore which has been trading a similar index for many years. Then again, nobody except the naive folks of the media surely expect a volume upheaval miracle on day one.

In technology, the Pakistan Stock Exchange is set to launch their new trading system acquired from the Shenzhen Stock Exchange, and ProMEX, the new digital platform for commodities based in Hong Kong, trading through China. They’ve selected Exberry as their core matching engine for their digital marketplace for physical commodities.

In the UK, Archax, the digital platform which is regulated with the UK FCA have completed their first money raise using their own platform deploying a DLA Piper compliance product, they garnered $1.5 million for the Archax Montis digital subsidiary run by Martin Watkins, which was announced a few weeks ago with the intention to create a full clearing and settlement structure for digital transaction regulated markets. Congratulations all round to the team at Archax and Montis.

In crowdfunding, we have a new unicorn Zopa announced with a £220 million funding round, that’s essentially $300 million ahead of their upcoming IPO. And that falls in at a $1 billion valuation making the P2P Lending and Savings Neobank the latest UK FinTech unicorn.

In regulation, Tether and Bitfinex, they fell foul of the CFTC and they’re paying fines totaling $42.5 million for what one might sportingly describe as, well, not so much breaking the barker’s perhaps never even making it to the buck for their allegedly dollar backed stable coin.

Elsewhere, the Bank of England has launched a first public CCP Supervisory Stress Test. Interesting to see what the results are there.

Charles Randell, the Chairman of the FCA will step down in spring 2022. Ahead of his term ending he’s already asked the UK finance minister to find his replacement.

Over at the London Stock Exchange Group, they’ve announced the appointment of Ivan Gilmore as the London Clearing House’s head of Cash Equities.

And finally this week in the jobs news, the CSCS board (board of directors of the Central Securities Clearing System of Nigeria) have renewed the contract of Mr Haruna Jalo-Waziri as the Managing Director/Chief Executive Officer Jalo-Waziri was previously Executive Director, Capital Markets at the Nigerian Stock Exchange before moving over to the settlement engine.

From the middle of Africa to the Northern part of the continent, the Middle East no less into the darkness Lebanon’s generator mafia warns it will switch the lights off when the headline in the Daily Telegraph of London this week, and truly Lebanon is on the brink. The currency collapse has ripped the economy asunder in a way where the economic depression terminology vastly understates the national lack of wealth. Hyperinflation is eating at the soul of the state and leaving its citizens with desperate choices. A gruesome entry from the big world, some 82% of all Lebanese residents can no longer afford at least one essential utility bill every month, according to the United Nations statistics.

And on that mysterious and far from magnificent note, ladies and gentlemen, my name is Patrick L. Young. Thank you for listening to this episode 117th of the Exchange Invest weekly podcast.

I wish you a great week in blockchain, life and markets.

LINKS:

LME Asks Members For Swift Plans In Case EU Cuts Off Clearing
Reuters

Moscow Exchange To Add Equity Market Trading Hours
MOEX

NGX Listing Won’t Address Liquidity Crisis, Says Brokers
InsideBusiness

Thousands Tune In To ArawakX Inaugural Ecosystem Seminar
EyeWitness News

ALTX Calls For Probe Of Uganda Capital Markets Authority
The East African

Nasdaq Reports Third Quarter 2021 Results; Delivers 17% Increase in Revenue Compared to Prior Year

Deutsche Börse On Growth Path As Planned
DB1

Deutsche Boerse Q3 Net Profit Up 32%, Beating Expectations
Reuters

Interactive Brokers Group Announces Q3 2021 Results
Business Wire

Urbana Corporation Net Asset Value Per Share Above $7 – Sets New All-Time High
Urbana Corporation