131 Exchange Invest Weekly Podcast February 12th, 2022

Transcript

This week in the parish of bourses and market structure:

ICE Aces FY 2021, NSE 5X Profit Growth and CBOE up 90% as the mega results for Q4 2021 continue to roll in.

My name is Patrick L. Young.

Welcome to the bourse business weekly digest.

It’s the Exchange Invest Weekly Podcast Episode 131.

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 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.

Banks have Opened a Fixed Income Front In Europe’s Data Price Battle, went the headline in Reuters. I quote: “The price of bond market data has risen by over half over the past five years, which could prompt some users to quit the market and damage liquidity industry body AFME said”.

So in other words, ladies and gentlemen, exchange data is bad say banks because of those pesky exchanges, but bond data which grows more in the wild is worse? Presumably, “The Onion” would paraphrase this as “Banks Desperately Seek More Costs To Complain About While Charging Customers Egregious Fees?”

The Moscow Exchange – fabulous news there we have reported in the past in this podcast that they had three and a bit million investors on the platform just a couple of years ago that reached a giddy 8.8 million traders last year. Wait for it by the end of 2021 they had hit 17.4 million investors that’s quite a milestone.

The Tokyo Stock Exchange boss he’s telling Japan they must embrace activist investors not quite hug hoody, but he’s saying that companies should be opening a dialogue with activist investors instead of trying to shut them out. He added the urgency to decision making that can be added by activist investors could lift the value of Japan Inc.

Athens Exchange they’ve been doing a couple of interesting little deals for cooperation. The first one up the Romanian Commodities Exchange (BRM) they’re going to be providing post-trading services for transactions on Romanian natural gas. That’s a product we announced was being launched just a week or so back. It’s another neat incremental expansion by the Greek Exchanges group who also announced post-trade cooperation with the Cyprus Stock Exchange this week in addition to CSDR.

The Nigerian Exchange – they plan a ‘NASDAQ’ with attractive conditions for tech firms. That is of course not to be confused with the Nigerian NASD platform, which itself is not related to the folks with the wondrous 7 storey screen on Times Square, New York.

In results this week: when ICE dropped a 15% dividend rise it was clear the results were going to be good. Demonstrating that mature companies don’t have to be moribund, this was an example of solid growth pretty much everywhere, albeit a bit of stock/stock option stasis in a bull market had already resulted in a changing of the Wall Street guard.

The overall mortgage numbers year on year remind us that when given a few billion grains of data, ICE doesn’t just make bread, they deliver the finest caviar on top of the best blini with your choice of excellent champagne or the prime iced vodka of your dreams…

Following those results, CBOE announced a spectacular 4th quarter profits surge of 90% also topping Wall Street estimates. But that was later trumped by the news from the National Stock Exchange of India their consolidated net profit rose no less than 545.5%. Okay, to be precise, it was 545.46% to $180.5 million. That’s going to be great news to all the people looking forward to the long-awaited IPO of the National Stock Exchange of India, which looks finally to be reaching a point where it might actually happen only a decade or more since it was first discussed.

If you’re looking for some reading, ladies and gentlemen, don’t forget to check out “Victory or Death” – Blockchain, Cryptocurrency and the FinTech world, with a foreword by Jeffrey Sprecher, the CEO of the Intercontinental Exchange. This is a book where you can understand how technology is affecting life and markets, 20 years on from the excitement of the original FinTech best-seller “Capital Market Revolution!”. “Victory or Death” – Blockchain, Cryptocurrency and the FinTech world, is an easy read and it’s available from DV books and is distributed by Ingram world wide.

Glad to see so much excitement around the IPO-Vid Livestream. Last week we had the fabulous “Two Diverse Tech Musketeers” Julia Streets and Eliza Filby. This week, we enjoyed a great show “From First North To Infinity & Beyond!” talking about the incredible growth of the first North stock market for SMEs and NASDAQ’s Nordic franchises. And we were doing that with their Head of Listings Erja Retzen. Coming up next week, we’ve got Henrik Hasselknippe, we’re going to be talking about XBL and the world of carbon markets. That’ll be again, be with my preferred green expert for all of these carbon market discussions Steve’s Zwick, the presenter of the Bionic Planet Podcast.

Crypto land this week: Binance hired NBA star to warn against celebrity ads, the same time Binance’s CEO warned of a ‘massive’ SMS phishing attack which was a scam for various customers. Binance indeed secured two crucial regulatory approvals from Bahrain and Canada.

The Crypto platform Wormhole was hit by a $320 million hack on its DeFi systems. The High-Frequency Trading company jump trading jumped in to bail out the unfortunate Wormhole DeFi Platform.

Crypto exchange FTX, of course, fresh from that news that there were $32 billion in the latest private round, they’re going to be buying Japanese rival Liquid which adds to their Asian expansion. And the social media platform Stocktwits is said to be about to add crypto trading. Crypto exchange FTX is going to be providing the infrastructure for that. Trading and fees will be the same as they are on the main FTX platform.

People are starting to worry about what happens if a cryptocurrency exchange files for bankruptcy? And indeed there was also a fascinating move this week by Kraken – they’ve launched a proof of reserves. Something that actually a lot of cryptocurrency exchanges used to do back in 2014 following the bankruptcy of Mount Gox. Kraken leading a revival preceptive them to realize the next phase of crypto like involves a spot of blood on the streets and thus many worries will emerge about who might be swimming without a fully clothed balance sheet.

Product news this week: LCH SwapAgent completed the first year of swaption trade under ABF/FBF rules. Those are French rules, a French Master Agreement no less and the counterparties were in Texas CIB and Credit Agricole CIB so in other words to French counterparties that have a big Brexit ramification. It suggests the EU has an uphill struggle corralling the many counterparty cats. Let alone herding them into the pens of Brussels protectionism that coming in the week when of course, the EU said it was the last chance saloon, there would be no expansion to Euro clearing coming out of London by 2025 which of course flies in the face of, well, what we might call civilization. But when has that ever worried the European Union?

The UK tech sector, they’re seeking more listing reforms to keep the IPOs rolling on to London’s exchanges. Canada’s TMX group, they’re planning cryptocurrency futures in the near future for institutional investors.

Technology news this week: given that, out west EquiLend has just reported a record year for securities lending. Kenya is inching closer to a securities lending platform after successful testing. And then perhaps the biggest shock news of the week from Academia, “Humans still trump Artificial Intelligence at making money in financial markets according to a recent study”.

Regulation news this week: Brexit Britain is looking to smooth the ‘rough edges’ of MiFID II why they can’t just scrap the whole thing is beyond me, given it’s a complete waste of space. Same time, the SEC says their response to the Meme-Stock Mania is coming next week, according to their chairman, Gary Gensler. Well, here’s hoping it’s not like one of those cheesy bar signs which promise free drinks tomorrow.

The European Union watchdogs they’ve suddenly called for rapid action to catch up with digital finance. That’s merely more their inability to catch up with digital finance after 20 something years rather than actually anything to do with what digital finance has been doing. It’s a perfect synopsis of why the European Union feels the ‘precautionary principle’ at the heart of European Union doctrine renders every new invention a cause for concern and a reason to regulate. Thus, Liberty dies quality is strangled as a plutocracy of multinationals own the loying process and any hint of fraternity with the people who need a dynamic economy to improve their lot tragically withers. That the European Union blob only knows how to be afraid and seek ever more stringent regulations demonstrates the ugly truth they’re throttling Europe, ensuring a once pride continent become the new Argentina of the next century. In other news, Argentina this week was of course home to a series of protests over the latest possible IMF bailout there.

As I mentioned earlier, the European Union has said that Britain’s Euro clearing extension will be its last. Not quite clear, though. Does that mean it’s going to be the last before the Euro dies or because the European Union still holds on to the remarkably old concept that they have a protectionist right to only be the sole clearing venue for their own currency? The world doesn’t work that way Brussels.

Career paths this week: the government of Nepal has appointed the new Chief Executive officer of the Nepal Stock Exchange (NEPSE). Congratulations to Krishna Bahadur Karki. And of course, that leaves us to the world of interest rates. Oh my goodness two rises in as many Bank of England meetings and the old lady of Threadneedle Street is burning borrowers while savers are saying “so what” to 0.5% interest rates. I mean, that’s it. Interest rates are now at 0.5% after two consecutive monthly raises. I don’t even mean they went up by 0.5% in one rise, which was actually the standard integer for those of us who are slightly longer in the tooth with their interest rate trading.

Smoke and mirrors to mask the panic is the case here, the fox is not merely in the henhouse. It’s carrying rocket-propelled grenades and is digging in to take out the farmhouse, the barns and generally lay waste to the farmyard as a whole the chickens are just the first collateral damage.

Anyway, stay with this story for a few percentage points, there’s a yield curve resurgence coming. Oh, and perhaps the funniest millennial trader strop of all time could be on the verge of happening here, as it becomes clear that the younger generation will think the world is melting down (at 1% or so) interest rates. Well, we have an older generation are waiting for the B movie warm-up, which is the current plotline playing out to lead into the proper matinee.

And finally this week: India’s first blockchain wedding, a punic couple has exchanged NFT vows in the presence of a digital priest. The priest bestowed his blessings: “And know by the power vested in me by Ethereum, it is my honor and delight to declare your married.”

Readers may muse that registration on a blockchain is immutable in final settlement terms, a concept many married couples seem to find increasingly difficult to realise long term.

And on that mysterious and magnificent note ladies and gentlemen, my name is Patrick L. Young, Executive Director of Valereum PLC and the publisher of Exchange Invest, the weekly digest of the bourse business coming to you daily through a newsletter in your inbox. I wish you all a great week in blockchain, life and markets.

LINKS:

Banks Open Fixed Income Front In Europe’s Data Price Battle
Reuters

Moscow Exchange Has Well Over 17 Million Retail Investor
FinanceFeeds

Tokyo Stock Exchange Boss Tells Japan To Embrace Activist Investors
Nikkei Asia

Agreement Between Athens Exchange Group (ATHEX Group) And The Romanian Commodities Exchange (BRM) For The Provision Of Post-Trading Services For Transactions On Romanian Natural Gas
Athex

Nigeria Exchange Plans ‘NASDAQ’’ With Attractive Conditions To Tech Firms
Premium Times Nigeria

Intercontinental Exchange Reports Fourth Quarter & Full Year 2021

Intercontinental Exchange Announces 15% Increase To Its Quarterly Dividend
ICE

Cboe Global Markets Reports 2021 Q4 And Full Year Results
Cboe

Exchange Operator Cboe’s Quarterly Revenue Tops Views On Higher Volumes
Reuters

National Stock Exchange Of India Consolidated Net Profit Rose 545.46% To Rs 1348.69 ($180.5m) Crore In The December 2021 Quarter
Business Standard

Binance Hires NBA Star To Warn Against Celebrity Ads
Blockworks