147 Exchange Invest Weekly Podcast June 11th, 2022

Transcript

This week in the parish of bourses and market structure:

ASX pick their first female CEO.

NASDAQ acquires the ESG platform Metrio.

Elliott amongst a wave of people suing the LME.

CBOE launch a new floor. Yes, the CBOE launch a new floor, it’s not 1987 it’s 2022 and Eurex displays CCP pragmatism.

My name is Patrick L. Young.

Welcome to the bourse business weekly digest.

It’s the Exchange Invest Weekly Podcast Episode 147.

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.

We lead this week with news that Elliott Associates sues the LME for $456 million, according to the headline from Reuters. That’s a pretty staggering number and of course amounts to no less than almost twice the $250 million ‘moat’ being floated by FTX, which will allow them to apparently operate a safe version of CCP for crypto.

Nonetheless, US hedge fund Elliott Associates is suing the London Metals Exchange for $456 million for cancelling nickel trades after the chaotic trading during March that forced the London Metals Exchange to suspend its nickel market that was added to by another suing just a couple of days later and indeed we’re now to it believe 3 major litigants in this whole sorry affair.

CBOE as I trailed also at the start of the show, they’ve opened a new trading floor. “Why? Why? Why?” I hear you ask. The new trading floor is located in the Chicago Board of Trade building and takes up the 7th and 8th floors occupying more than 40,000 square feet. And once again, I say why why why a brave new digital world? Nope, I just don’t understand why we have this new trading floor opening either.

One thing which is good was the reopening in Shanghai this week, Stock Exchange staff they had their D-Day on June 6th. It wasn’t invasion, it was actually quite the opposite. They were able to return to their homes after being locked up in the Shanghai Exchange building for several weeks.

The Luxembourg Stock Exchange and the INX in GIFT City (the new financial centre in India) they’re strengthening their cooperation. While in an entirely logical move, the BME, the Swiss exchanges clearing arm is connecting itself to the Swiss Central Securities Depository aka the CSD of the parent company SIX Swiss Exchange.

The Caracas Stock Exchange, while the agony and the ecstasy it’s been over the course of the last few weeks after all of those decades of communist rule, the Caracas Stock Exchange had the ecstasy of possible value by seeing the government selling various steaks however, it’s now actually difficult to buy county shares due to a shortage of bolivars in the local economy.

So there you go, once again, even when they try capitalism, the usual Communist inefficiency plagues even their attempts to sell stocks from their nationalised portfolio of corporate assets.

Russia meanwhile, they stepped up their sanctions as part of their crazed invasion of the Ukraine. Quite amusing, actually, first of all, I think Adena Friedman has doubtless garnered huge kudos amongst her Baltic staff by being added to the Russian sanctions list and Jeff Sprecher of the Intercontinental Exchange was also sanctioned although amusingly he was sanctioned due to his position as chairman of the New York Stock Exchange, which is a position that he passed on to Sharon Bowen on December 6th of last year.

Clearly, Russian record keeping looking pretty much as poor as some of their strategic decisions in recent weeks.

One mega story in Brexit news this week, leave post-Brexit shift in Euro clearing to the markets – and that was the message not just of the industry during the course of a conference this week but actually the head of Eurex clearing Erik Mueller.

Good to see Mr. Mueller strengthening his reputation and the reputation of Eurex as seeking quality central counterparty clearing and not mere partisanship in a post-Brexit world.

Not much news in results this week, the Vietnam Stock Exchange however, they’d have good news that their after tax profits rose to $57.91 million.

New markets this week, all of the news on the many new markets was in Exchange Invest, the daily bourse business newsletter which you can get by subscribing via ExchangeInvest.com. We’re even offering a free 30-day trial at the moment.

One fascinating headline, the first futures exchange aimed at healthcare economy has filed for regulatory approval. That is no less than the Intelligent Medicine Exchange (IMX) which announced its plans to launch the first financial exchange focused on the healthcare economy. They’ve gone for regulatory approval with the CFTC to be a DCM (Designated Contract Market) – a futures exchange and they’re gonna be focused on contracts that will enable individual and institutional market participants to manage risk and invest in multiple components of the healthcare ecosystem.

It’s an exciting, fascinating new innovative exchange with which I look forward to learning a great deal more. The good news is they’re not even seeking to modify the basis of CCP while claiming these objectives. Moreover, they’re in very safe hands with their strategic advisor, none other than the excellent former CME Group CEO Phupinder Gill, all the very best to Gill on the IMX team.

Deals this week, the CBOE they completed their acquisition of Jos Schmitt’s NEO, strengthening their global equities and listings offerings. Very exciting all together.

Well, the big take over the week was NASDAQ acquiring Metrio – a leader in sustainability software based in Montreal. Metrio’s SaaS platform can analyse CO2 emissions, waste, gender equality, community investment and more.

Meanwhile, Schwab they face an antitrust lawsuit seeking to unwind their acquisition of TD Ameritrade.

The Zagreb Stock Exchange, they’ve boosted their stake in their Skopje counterpart to 9.92%.

Of course, you were able to catch this week the boss of the Macedonian Stock Exchange Ivan Steriev on IPO-Vid. Catch the highlights at Youtube.com search for IPO-Vid. Meanwhile, if you’re waiting, as you’re waiting for next Tuesday’s edition of IPO-Vid which will have the excellent Max Butti as guest don’t forget you can also pick up a copy of my book “Victory or Death?” Blockchain, Cryptocurrency and the FinTech world, published by DV books and distributed by Ingram world wide.

The Cum-Ex news this week, the Cum-Ex scandal had a little bit of a shake up Sanjay Shah who’s been hiding in plain sight in Dubai has been arrested and charged with defrauding Danish tax authorities for as much as $1.04 billion during the “cum-ex” dividend trading schemes.

More worrying news still was the fact that the finance minister of Luxembourg noted that the overall “Size, scope of cum-ex tax fraud still mystery”. Well, ladies and gentlemen, this certainly does not engender confidence in tax raising governments that they actually don’t have any form of functional audit mechanism it seems.

In crypto news this week, well def doom and despair the crypto winter is on just about every platform seems to be either cancelling new hires or outright removing staff in the case of some places they’ve been taking a month, just 10% of the headcount. Nonetheless, the one place that still hiring is FTX despite Coinbase, Gemini and others or reducing their headcount.

In product news this week, Magellan, Enterprise and ICE had some updates on terminal transfers of Midland WTI AGC futures. Well, pipelines across Texas are gurgling the message “Blood! Blood! Blood! While the valves hiss “Cushing!” I suppose.

At the same time, the Vice President of Ghana, Mahamudu Bawumia has challenged mining companies operating in Ghana and the West African sub-region to work with government and regulatory bodies to establish a mining index on local stock exchanges.

Technology news this week, there was an incredible letter from a series of tech experts. They urged Washington to resist the overarching influence of the crypto industry. A very illuminating letter indeed, it seems not everybody agrees with West Coast ‘bro’s that they’re always on the right track, despite their incredible self confidence.

Good news for Vermiculus -they’ve announced their deal with CERC. They’re delivering a real time clearing system to the Brazilian receivables market and finally, in technology this week Trading Technologies and Talos have entered into a strategic partnership, vastly expanding the TT crypto offering. You can catch my interview, it’s also on the archives YouTube.com IPO-Vid from a couple of weeks back with the CEO of the Trading Technologies organisation.

Career news, the biggest news as of the week Helen Lofthouse has been appointed as Managing Director and CEO of the ASX. A fascinating internal appointment while I suppose one might say that given the half-baked chaos left behind by leaving a bunch of “white blokes talking to white blokes about being white blokes” as the incomparable Cindy Gallop terms the prevailing management status quo in so many companies, the ASX has stayed inside the organisation (after searching “outside” proved to be a lost decade and more…) of progress for the exchange. We welcome the new female CEO Helen Lofthouse and wish her all the very very best and hope she has the courage to make the brave decisions her male predecessors shirked. It’s the perfect moment for a mega ASX reset.

Another power woman with good news this week, Ant Group have appointed the Hong Kong Exchanges Chairman Laura Cha as an independent director as they continue their restructuring to meet certain state regulatory concerns. And that only leaves us to finish on a triumvirate of power woman this week ladies and gentlemen.

For over the course of the last week HRH Queen Elizabeth II has been celebrating her incredible reign. A long weekend was devoted in the UK to her service to Great Britain and the British Commonwealth. 70 years in any job is pretty impressive – in one as all-encompassing as a professional monarch, it is all the more remarkable. We’re saluting Her Majesty on this stunning benchmark and wish her “Long to Reign Over Us” as the national anthem itself notes. God save the Queen.

And on that mysterious and magnificent note, ladies and gentlemen, my name is Patrick L. Young. I wish you a great weekend blockchain, life and markets.

We’ll be back with another episode of this podcast next week, that of course will be episode number 148. Thanks for listening.

LINKS:

Elliott Associates Sues LME For $456 Mln Over Nickel Trading Halt – HKEX
Nasdaq

LME Faces Elliott International’s US$456 Million Law Suit For Suspending Nickel Futures Trading
South China Morning Post

LME In Court Again, Faces US$15.3 Million Suit Over Nickel Trades Cancellation
South China Morning Post

Why The London Metal Exchange Is Fighting A Lawsuit For Cancelling Nickel Trades
Nasdaq

Cboe Opens New Trading Floor, Begins New Era Of Open Outcry
Cboe

Cboe Keeps Old-School Pit Alive With New Chicago Trading Floor
Bloomberg

Shanghai Reopening: Stock Exchange To Let Staff Return Home On June 6
South China Morning Post

Luxembourg Stock Exchange, India INX Strengthen Cooperation
Times of India

BME Clearing To Be Connected To The Swiss Central Securities Depository
BME

Caracas Stock Exchange Warns It Will Be Difficult To Buy Cantv Shares Due To Shortage Of Bolivars
JournalTime