133 Exchange Invest Weekly Podcast February 26th, 2022

Transcript:

This week in the parish of bourses and market structure:

New Zealand Exchange making liquid expansions, they’re successfully raising money after reporting an excellent deal to buy a third of the dairy auction platform GDT while Tradeweb’s founder and CEO Lee Olesky will be chairman alone from next January, as Billy Hult becomes CEO.

ICE strategy guru David Goone to head tZero and NSE struggles to regain the narrative that has now spiralled into parody while in other news, which is surely comedy, the London Stock Exchange Groups PRs have won awards – for PR!

My name is Patrick L. Young.

Welcome to the bourse business weekly digest.

It’s the Exchange Invest Weekly Podcast Episode 133.

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 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.

The longest awaited parish IPO – a saga lasting a decade and more of almost mythical enormous proportions this IPO, it now looks to be further delayed as the National Stock Exchange of India (NSE) farago moves from co-lo via guruto all manner of accusations of payola and more. It’s increasingly difficult to see how the NSE can rapidly recover to get to market soon, even though management will claim they cleaned house years ago when the previous team moved on.

Here’s a brief review of the past week’s high drama or was it a low farce?

The tax authorities raided Chitra Ramkrishna’s home amongst others following on from the low latency lust yogi fines by SEBI. That has piqued a lot of political interest and clearly the Ministry of Finances is now very interested in what has been happening. Whether this is the “very interested” of nothing doin’ akin to NSEL or actually go into your mind to doing something or possibly even doing much remains to be seen. Perhaps the appending of “flight risk” status to all the parties involved suggests this investigation is now in a higher gear and clearly not resolved post-Sebi resolution. Quite why we can’t have the same level of interest in resolving the NSEL fiasco escapes me.

The NSE itself is eager to note it has hugely overhauled procedures in the 6 years since Chitra Ramkrishna exited and presumably to occur spiritual guru virtually with her. Then again, lauding her out the door and allowing her laptop to be destroyed suggests a certain lax attitude that may yet come back to haunt the once poster child of Indian bourses.

Tempting as it is to seek the last word on the mystic guru affair that has gripped the parish…things have an odd way of continuing the dialogue in this AAA grade tabloid cum Netflix fodder. Albeit how the latter can cast somebody that nobody has ever met – sounds more like that retro Kingsman movie (QV the Chitra email we’ll be talking to avoid in a moment) It seems the guru may yet have revealed himself despite her denials. Then again, it seems the same person Chitra never met spent a fortnight with her in the Seychelles #It’sComplicated.

On the face of the correspondence, there are some gems. An email dated October 8th, 2015 for instance, is a little short of epic: “The company runs solely for THY Grace and my G blessing, Swami” Chitra Ramkrishna apparently wrote. Can anybody imagine a similar message via the offices of say – choosing a C-suite parishioner at random – Terry Duffy?

Ultimately, the ongoing fester here may soon be affecting the IPO plans – if it is not already, another sorry chapter in the tale of going public where NSE has already been by far the most delayed IPO in the history of the exchange parish.

As a footnote, it may be ironic but it is worth reflecting that Exchange Invest Issue 596 marked our Yogi Berra special tribute edition on the death of the baseball great. From paying tribute to one yogi, I spent the same conference with my Burgenstock Crossfire panel being graced by one Chitra Ramkrishna.

Meanwhile, in London, a hearty welcome to Sigma Broking Limited, they become the first new LME ring dealer in 15 years. On the other side of the city of London, the London Stock Exchange Group PRs manage something which I think are beyond parody. They had prizes for organizing so many Zoom calls. Nobody did any work for 6 months being just one of the most farcical it seems. Exchange Invest usually doesn’t bother covering such prizes as generally they seem to be the product of some form of advertorial inducements so similar, but I had the pulse this week within the newsletter to make mention of the fact that PR week is surely delusional that the London Stock Exchange Group even has a competent PR team day to day. Let alone the idea that they could win a first 100 Days campaign, an employee engagement campaign, the best corporate internal comms campaign, amongst other things for their allegedly “impressive” work.

Something which is impressive on the other hand, the London Stock Exchange Group noted this week in Growth Business, the AIM (Alternative Investment Market) that’s the SME centre of the London Stock Exchange and is bigger than Europe’s other Junior stock markets combined. Read that and weep EU.

In Brexit news this week: Cut-Tax or ARM wouldn’t be the last to a US float warned Xavier Rolet in the Evening Standard. Xavier Rolet was always impressively in the public domain promoting the London Stock Exchange Group or indeed inaccurately suggesting Brexit was a disaster. Stay tuned for that bit. However, the fact he is still the only face of the LSEG in the public domain several years after his departure from the C-suite is surely a damning indictment of LSEG’s current management (Do you remember who is Chairman? Me either) indeed, of course, one could talk about well, the award-winning – allegedly PR department of LSEG at this point in time given their remarkably low profile for management in the press. Xavier Rolet demonstrates Out of his Depth Dave’s weaknesses? It goes without saying the recently PR week garlanded comms department is doing a brilliant job here? Oh, wait..

Alas elsewhere it seems Xav is still in max-remoaner mode – and thus spouting drivel as such folks tend to – in this case, claiming that Euro clearing is already sailing away to the continent from London, which is backed by nothing other than EU hubris and desperation right now. The perma-Damoclean sword of Euro clearing will continue to be swung by dismal apparatchiks like Commissioner McGuinness. She may even believe her own balderdash. But surely XavRol must have learned more than that when it comes to cross collateralizing his knowledge base alone?

Results this week: New Zealand Exchange they posted a 4% lift in operating earnings planning a $44 million rights issue which was going swimmingly well as we went to a pixel with Exchange investor at the course of this week and began recording this podcast.

New markets this week: the Ghana Stock Exchange, they’re going to establish two new markets on the Accra bourse. They’re going to be derivatives for a start and a Green Market coming to the Ghana Stock Exchange.

Hindu Power Exchange is the new entrant, the CERC has procured approval to the new power exchange proposal, and Incubex another carbon market they’re going to launch their voluntary climate marketplace at the end of March.

In deals news this week: the Intercontinental Exchange lead the exciting deals news with a strategic investment in tZero Group Inc. They didn’t declare how much money they were putting in, but they did declare that they were going to insert a spectacular asset. Just when tZero appeared somewhat becalmed along with news that David Goone will exit his chief strategy officer role at ICE and take on The Digital Asset platform as CEO, which is also receiving a nice investment of cash. That’s very, very exciting news.

Of course, for years we have noted a bunch of the ICE C suite could all make highly credible CEOs in their own right – here is a proof pudding eating repo that will be wildly exciting to watch!

The ICE Chief Strategy Officer meanwhile, we’ll continue to advise Jeff Sprecher over at ICE while forging what looks like a hugely exciting new venue now that David Goone is in command.

New Zealand Exchange, the reason they had that rights issue was partly to take 1/3 in the Fonterra GDT (Global Dairy Trade – an auction platform for milk)

IEX of DB1 firm they’re going to be taking the other 1/3 stake, in total New Zealand Exchange are paying around $8 million (12.5 New Zealand) for their stake. Very, very exciting news for GDT and particularly New Zealand Exchange. Snapping up a remarkably reasonably valued steak which is a natural fit for their agri-resources. Exciting times while the fundraising will add some further balance sheet heft as NZX expands its worldview.

Good to see that the New Zealand Exchange had already raised $16 million New Zealand ($10 million US) on their accelerated book build rights offering which was completed in less than a week. The retail component is ongoing as we record this podcast.

Don’t forget ladies and gentlemen “Victory or Death” – Blockchain, Cryptocurrency and the FinTech world. That’s my current book, you can pick that up from Amazon and good bookstores everywhere. It’s published by DV books and distributed by Ingram worldwide.

Don’t forget also to pick up YouTube and log in and listen to and watch one of our live streams. They’re usually live on Tuesdays at 6 pm, 1 pm New York time. The IPO-Vid live show. Recent shows included a spectacular discussion this week with the good folks of Horizon kinetics, who were discussing inflation.

Product news this week: the Saudi bourse Tadawul, they’re going to start options trading, they reckon they will have trading in 5 to 10 companies initially on their single name options book.

The New York Stock Exchange, meanwhile, has filed a trademark for NFT trading. And over at the Sri Lanka Exchange, the Colombo Stock Exchange, they’re going to be facilitating the ability to raise dollars and foreign currencies from the bourse.

Career path this week: It’s the end of an era co-founder and CEO Lee Olesky is going to be stepping down as Tradeweb CEO he is currently chairman and CEO having acceded to the chairman’s role just a few weeks back. He’s gonna be making way for Billy Hult, the current president who will step up to the CEO position by the end of the year. Congratulations to Lee Olesky, he’s helped redefine the bond business and driven Tradeweb from pretty much nothing to a major global electronic marketplace.

Elsewhere, about the news of somebody who was previously somewhat of a fixture in the pixels of Exchange Invest daily newsletter, Barry Cheung, currently serving a four-year jail term at Stanley Prison in Hong Kong over his attempts to keep the now-defunct Hong Kong Mercantile Exchange afloat. Unfortunately for him, he’s lost his appeal against a financial fraud conviction. Rather unfortunate, of course, but at least it brought HKMEX back into the limelight as Barry Chung’s infamously spendthrift approach to exchange management has lessons for today’s startup exchange ventures.

Over the CME some major changes to their slate of managers. Kevin Kometer is retiring as CIO in the middle of the year and will be replaced by Sunil Cutinho who leads CME clearing and has served in a variety of technology roles since joining the CME in 2002. Elsewhere, CFO John Pietrowicz he announced plans to retire in 2023. Lynne Fitzpatrick has been promoted to the management team as Deputy CFO and will succeed Pietrowicz upon his retirement.

Meanwhile, in ‘big world’ gosh, when the tinder swindler had his latest moment in the limelight speaking to US television this week, it was hard to believe anyone could do a worse job of defending their reputation.

Until that is of course Joe Brezhnev attempted to address growing macro-political issues and lead what passes for the free world this week. Elsewhere the US SEC, they have denied claims that they’re harassing Elon Musk.

I’m reminded in this whole affair of newsletter guru Harry Schultz’s magnificent rejoinder “I may be paranoid but that doesn’t mean they’re not out to get me” which appears to reflect feeling amongst those inhabiting the muskaverse, (which is a somewhat virtual space, which can often leave inhabitants with an ego that stretches to Mars)

And on that mysterious and magnificent note, ladies and gentlemen, this is Patrick L. Young presenter of this podcast, publisher of Exchange Invest (the daily watercooler of the bourse business via ExchangeInvest.com) and of course Executive Director of Valereum PLC wishing you a great week in blockchain, life and markets.

LINKS:

I-T Dept Raids Former NSE MD Chitra Ramkrishna In Tax Evasion Probe
Business Standards

MoF Officials Meet NSE Chief, Discuss SEBI Order On Lapses
The Economic Times

SEBI’s Order Points To Glaring Governance Lapses At Stock Exchange, Calls For Instituting Checks And Balances
The Indian Express

Ramakrishna: Board, Mgmt Overhauled In Last 6 Years, Says NSE
Times of India

The CEO, The Yogi, And The Stock Exchange
The Ken

Irresponsibility Or Worse? What SEBI’s Probe Of NSE Tells Us About Its Stellar Board Of Directors
The Wire

Board Knew Of NSE Chief’s Misconduct But Let Her Resign With Glowing Praise
The Indian Express

NSE Irregularities: CBI Questions Former NSE CEO Chitra Ramkrishna
Deccan Herald

LME Welcomes Sigma Broking Limited As A Ring-Dealing Member
LME

PRWeek UK Corporate, City & Public Affairs Awards Winners: Best In-House Team For Corporate Comms
PR Week

AIM Bigger Than Europe’s Other Junior Stock Markets Combined
Growth Business