Speaker 0 00:00 One year ago. How long it seems now on July the 31st 2018 I included this warning and exchange invest daily. Don't forget to ask your doctor if refinity IV is right for you. Clearly it's just the prescription for David Schwimmer and a story which dominated a big week in market structure news as the London stock exchange leapt towards the global Britain strategy as the UK sits on the cusp of Brexit. Welcome to the extension invest weekly. My name is Patrick L. Young
Speaker 1 00:32 <inaudible>
Speaker 2 00:36 <inaudible>
Speaker 0 00:52 with rumors of binding over the weekend, a London stock exchange group itself stoked the speculation with a statement of confirmation that talks were ongoing upon an acquisition of refinity IV. Most media missed the big point. The key pivot away from EU centric operations and a step towards global Britain. Hot Tip to Reuters. Well, they did ring me up and ask me. None other than the economist would have end up quoting my words without attribution. Before the week was out and even the FT itself noted the global expansionary nature of the deal, but us befits the Brussels bugle. It couldn't bring itself to actually utter anything that might be seen as less than 1000% favorable to the Brussels bureaucracy who remain such a key component of the subscriber income to the pink paper. Thus, the FTE said the deal mark to sign post. They just couldn't bring themselves to actually spell out the sign post, which clearly says, get the heck out of dodge city.
Speaker 0 01:46 We'll own here. This is a major pivot away from the EU for LSEG as indeed Europe parliamentarian and Exxon Committee member Jake Pew had also noted at the very outset of rumors about this deal. Anyway, thus when my article for the Center for policy studies via their cappex website this week, the London stock exchange is turning away from Europe and endorsing global Britain went the headline. It's worth a read dropped by cappex.co when you finish this podcast. Meanwhile, back in the parish, we soon had a clutch of analysts and journalists who appear to have missed the antitrust implications of NYC, your next dose Bursa and indeed db one LSC, the infamous merger of equal desperation, which failed of course comprehensively a year after I'd said it was doomed from the get go. At least it seems from the refinity case that the LSE has no learn some of the lessons from their past ill-conceived attempt at that merger of equal desperation as it didn't make it through antitrust under any circumstances whatsoever on the grounds that all the bidders who couldn't buy because the antitrust landscape is clearly putting it mildly challenging.
Speaker 0 02:53 After the clarity of the rejection of that merger of equal desperation, this sort of stuff, we're endlessly analysts and the media come out and suggest that more stock exchanges will merge with other stock exchanges to make bigger stock exchanges, which are completely and utterly going against. What antitrust wants to see actually makes me wonder if unbundling is really the crux of the paying for stock analysis crisis quite who can buy LSE was hopefully put to rest by the announcement Thursday morning, the David Schwimmer and his management at LSC and tend to spend the next few years with their antitrust lawyers and it is to be hope bevy a platoon or battalion. Well in fact, the division of integration managers, albeit successful exponents of the integration as to our tar currently as rare as Hen's teeth, that LSE or perhaps one might put it in their own group perspective. There is rare is a modern LCH computer system that might be a more opposite description after a year in the job, but it's clear David Schwimmer sees himself as another deal-maker, not a manager, which is a concern given that sooner or later a lot of things need to be integrated properly and indeed that 500 pound gorilla of a data vendor affinitive defeated three owners in a decade when it came to trying to turn it into a modern lean mean machine.
Speaker 0 04:07 There in lies part of the worry about the LSEG deal, and I will revert to this four subscribers in the daily newsletter exchange, invest with more information in due course. If you're not on the mailing list, send me an email,
[email protected] or drop by the exchange, invest.com website. We'll be happy to sign you up for a subscription and then you'll be able to get all the pith such as this every day in your mailbox from the exchange. Invest Daily newsletter back to the LSE, the Wall Street Journal. Well, they stated the LSE needs to prove the logic of buying refinity I would noon stop observation. LSE still needs to prove the logic. It can refinish <inaudible> integrate lots of teamwork. Talk to sweep away notions that David Schwimmer is merely many Zahav and management style does not convince that LSE has the ability to Tim this savagely bourgeois beast of on productivity which remains in long term decline, better known as Rif, any Reuters QVR.
Speaker 0 05:08 I read an article in Forbes this week, which coincidentally happened to catch my eye at the same time as Ellis GG. Refinity was making headlines what CEOs must do to avoid the 83% of mergers and acquisitions that fail coincidence. Meanwhile, for those pondering the fine art of investment during the week, I reproduced a single stock guide to investing as exchange invest explained the rules for trading LSE stock are as follows, one there will be a deal by two the deal has fallen through so that makes another deal more likely. Buy Three there hasn't been any talk of a deal for weeks, so one must be coming by. Four they're doing a deal by five in case of 0.5 none of the above. Naturally investors are advised to buy the stock and wait for something to happen between one and four. However, I'm going to leave the last word of this week for this deal will surely run and run and run on LSEG refinity give to David Mercer, the CEO of Al Max Exchange group who coincidentally produced a fantastic set of results this week. Record setting results for the foreign exchange trading platform. This is 100% a market data deal, which assumes that distribution will stay the same over the next decade. There you have a $30 billion risk. That was the emojis to the week amongst the many millions of talking heads. Bravo, David Mercer
Speaker 3 06:37 <inaudible>.
Speaker 0 06:39 I mentioned earlier the excellent results this week from the elmax foreign exchange platform. It was a huge week of results rather frantic every day we saw a bevy results amongst them. CBOE CME urine <inaudible> serve on the Japan exchange group. They produce their consolidated results and made a couple of interesting announcements. They commenced the tender offer for the shares of <inaudible>, the Tokyo commodity exchange, which we were awaiting. They said that the all in one bore set to open during the course of fiscal 2020 which should be a fascinating one stop shop across the Japanese islands. All the people reporting their results included the Johannesburg Stock Exchange, the London Stock Exchange. Of course. Did anybody actually remember what the results were once they said they were buying definitive Bursa, Malaysia, the crowdfunding platform, cedars, which continues to lose money, Thomson Reuters themselves, the old remaining Rumpole of what used to be a much larger entity before they go riff affinitive separated and also the Warsaw stock exchange of those that stood out well.
Speaker 0 07:41 Of course there was al Max as I mentioned twice so far, but there was also then the intercontinental exchange quite simply, nevermind Christmas, I wish it could be the ice quarterly call every day data rich, insight driven and with undertones of brilliance and a cool car masterclass. This is why the ice team remain years ahead of the opposition in terms of understanding their market and indeed communicating it. It was a classic Bravura performance for all of those who were trying to ascertain why on earth. Jeff hadn't managed to buy the wondrous incredible Reuters business. He made it absolutely clear that he bought IDC in 2015 so in other words, by the time the other guys get through antitrust, he's going to be well about eight to nine years down the road effectively. Once they've done any degree of integration whatsoever with his strategy. He also managed to buy very different asset, which gave him a different degree of functionality and more rover.
Speaker 0 08:32 He put to bed the absolutely silly assertions and I get prompt that the London Stock Exchange refinished of Dean wasn't being shopped and therefore somehow or other was an exclusive. The truth is everybody knows that multiple tiers of management over several generations, and indeed several owners of Thompson Reuters have Reuters and even of Ruffin <inaudible> have all had conversations with the major exchanges and clearly for many reasons as he put it himself, Jeff said he just couldn't make that deal work for the ice shareholders on the intercontinental exchange business. Anyway, if you haven't even better than this podcast by a country mile dropped by the investor relations site of the intercontinental exchange and listen to the one quarterly results review that is simply essential listening in the parish. Welcome. We have a new publicly listed perish piece of infrastructure. The Tel Aviv stock exchange. Tac had a very successful IPO this week.
Speaker 0 09:29 Local investors seemed fairly apathetic, but overseas interest was remarkably brisk. This was a business where of course they have a central core shareholding of a group of people led by Manoj k partners, the Australia Hedge Fund whose leading partner Houston deed to be directors of the Australian Stock Exchange until a few years ago. That syndicate must be looking very pretty now as ultimately the stock exchange itself tase managed to reach a $200 million valuation before the first day of trading, which saw a healthy 30% premium. Michael Spencer was in the headlines twice this week and he was praising the government of Boris Johnson, which has arrived in the UK and indeed we certainly have that outbreak of leadership carrying on who knows with a free port strategy and much else besides we may yet see an outbreak of government from the UK after well many, many years where it's been becalmed the same time Spencer launched a very, very appropriate attack.
Speaker 0 10:24 He was attacking politically motivated regulators and was thinking clearly about the UK where of course the eyeball crisis saw his company ICAP managing to win last week, even though Michael Spencer has no longer any involvement with it. But finally, logic and justice prevailed where they managed to overthrow previous rather dogmatic opinions where they'd sought to stitch up the brokerage company in the midst of the eyeball crisis. As you may have recalled, we were talking about how the banks variously folded almost instantly when they were accused of anything and the gritty brokerage company that became TPI capital photon and cleared its name and avoided any possible fines. We really owe Michael Spencer some debt of gratitude from the parish for this. Hopefully his knighthood, if not a peerage, is on its way to him soon for his many services to the parish. So from the fearless guy we moved to, well, an interesting aside, the fearless girl, the fearless girl's sculpture has been much discussed around the world.
Speaker 0 11:21 A replica has appeared even in Europe in recent months and visited various cities including London under Warsaw, well alone artist from Delaware who says he's the sole owner of the copyright to fearless girl Kristin visible. She's facing off against state street global who actually own the statue outright because state streets seem to be blocking use of the figure and the image by miss visible. The artist fearless girl meets a large blundering Stock Exchange Organization in the back office who also happened to be some form of bank has to be said in terms of diversity arguments, whatever the precise facts are here. This presents an ugly optic for state street whereas it sought to be a champion of diversity in people news. We began with the tragic case of the CEO of first derivatives. Brian Conlon, who several months ago had a nine stack. Clearly it may that he was suffering from cancer, but he intended to stay in situ while he beat the disease off.
Speaker 0 12:24 Tragically the disease beat him. During the course of the last week, he had a massive sendoff in Nuri, the city where the first derivatives organization as based with hundreds of mourners and a very, very substantial number of people already signing books of condolence. He was the CEO who as part of the key team, built a unique financial data business from a remarkably off the beaten track market time close to the border in Northern Ireland with the Irish Republic elsewhere South African bore CEO Nikki Newton King is going to retire after eight years running the Johannesburg Stock Exchange. I suppose it was always a challenge to be the anointed successor to the, well fabulously marmite, but in many ways highly effective. Russell Lube Schur who came before her, Nikki Newton king achieved various things. Perhaps she achieved more as part of the loop should team than in her own stead as CEO. Her successor is a very interesting figure.
Speaker 0 13:16 Layla furry will return from a spell in banking in Australia having previously been the executive director of post-trade and information at JSC between 2012 and 2016 all the very best to Nikki on her retirement and all the very best to later furry when she assumes offers in the autumn in product news curve global have launched some finer price ticks for inter commodity spreads is an interesting video. If you drop by the curve global site, they're reducing trading crosscuts in every possible way they can manage and they've managed to get, in this case, some of the ticks right down to one 10th of a tick where you're doing different kinds of spreads. Very, very interesting and innovative, competitive activity long may it continue. Meanwhile, in Egypt, they've taken significant steps to deepen their money derivatives and capital markets. The Central Bank of Egypt helped along by the EBR date have introduced the Cairo overnight interbank average, I suppose.
Speaker 0 14:18 They couldn't actually introduce the Egyptian overnight interbank averages. Somebody else already uses the name Leonia. On the other hand, of course, perhaps carrier can managed to deploy the EO new title, depending on how long the euro lasts. Of course, the one issue that we now have is this new CEO n I a acronym I think presumably has to be well pronounced carefully. I would call that Konya on the ground that if we don't call it Konya and pronounce it absolutely brutally with shorter space, then it sounds like something much, much, much worse than anything I bore ever brought us over at intercontinental exchange. They've launched nine further marine fuel contracts in advance of Imo 2020 actually, there was a stunning diagram, very, very simple about the nature of oil and gas trading in the intercontinental exchange results. I think it was slide number nine off the top of my head.
Speaker 0 15:11 Worth looking at so that you can better understand how the world of oil and gas has changed over the course of the last five, 10 or indeed 20 years. Meanwhile, over at Clearstream DB, one of launched a buy in agent surface for their CSD r doesn't sound terribly exciting, but actually it's another element in what is a very, very intelligent strategy. Gradually finding the sorts of services around the outside of the CSD, which actually makes more sense to offer from the CSD company rather than relying upon a potentially more expensive intermediary bank. Long may continue long may Clearstream carry on with these sorts of interesting innovations. Oh, and incidentally, no. We didn't hear anything from uriclear during the course of this week because of course as we know, Goldman Sachs and others are trying to shop the shares around at the moment to see whether there ought to be an IPO.
Speaker 0 15:57 Clearly they may be having a rethink after the LSEG refinished of deal over the Baltic exchange. They've started tracking shipping emissions and interesting new departure from their purely frit data, which they've been accumulating over the course of 265 years. The BRM, the Romanian commodity exchange had their first contract concluded on their gas forward CCP platform. Meanwhile, the first industrial grid hemp exchange for institutions has been launched by pan exchange out of Colorado and there was a story suggesting that predicted is the prediction market indeed, which owns the market for 2020 presidential election betting. Let's see, see how that goes. All the way through to November next year in regulatory news, some interesting snippets. The China FX regulator is seeking to relax, exchange rules for commodity futures markets. Hooray. Meanwhile, the European Union has been well playing the protections card. Again, why do we talk about Trump? I mean actually when it comes to financial protectionism, when it comes to parish protectionism and the world of exchangers, nobody is currently more active, more assiduously active than the European Union, terrified as they are paranoia candied that the United Kingdom might be a allied to Brexit and be actually might be successful in making Brexit.
Speaker 0 17:14 Therefore the European Union is looking to strip some five countries have market access rights, absolutely ludicrous there involving countries such as Canada, Brazil, Singapore, Argentina and Australia. Later I believe that Singapore actually put out a statement saying that they thought that they were going to skip scot-free, but this is truly an utterly pathetic piece of protectionism. It denotes the Brexit derangement syndrome, which has come from London right across various UK cities and it's an epidemic levels in Brussels. It is completely and utterly daft for the European Union to be cutting off its nose to spite its face by so anti trade in every possible way. And ultimately the euro and the eurozone and the EU 27 will be the losers in their sort of strategy and indeed actually as fast as the EU s we're trying to signal tighter financial market access after Brexit to all of these countries.
Speaker 0 18:07 Therefore, presumably throwing them into the arms of the UK to manage to make wondrous large free trade deals at the first possible opportunity once Brexit has arisen. There was also this rather entertaining story about the Swiss exchange. The Swiss exchange has had one of the most marvelous months in its history. Why not? Because the Swiss exchange did anything lead differently, you understand? But actually because of course, as we know from the 1st of July, the European Union blocked Swiss stock trading from taking place anywhere across the European Union. Net result, fabulous factory to the Swiss exchange and indeed a huge undermining of actually the European Union's best initiative and financial markets. The original method,
Speaker 0 18:52 the international swaps and Derivatives Association is Dar have selected Bloomberg as the fallback adjustment vendor. That was the biggest story in technology this week. Congratulations. Well, it was an excellent move by ISDA and didn't did great for Jonathan Seymour and his colleagues at Bloomberg to secure the deal in terms of securing deals, there was an interesting story about deals that haven't been happening. I own the rather private, some might say somewhat secretive Dublin headquartered vendor which has various different vendor assets across the perish on its books. They've been having difficulty managing to go to the public market to fund their purchase of a curist this year twice. In fact, they were unable to secure leverage loans in the broadly syndicated loan market and they're not looking around for private financing. Interesting to see if that story develops further
Speaker 0 19:41 and just before I go. It's great when a micro action work site, a while back, Josh King at ice asked if I could think of anybody who might be useful guests on the ice podcast. I had no hesitation in endorsing Mrs. Young suggestion of the brilliant Cindy Gallop. That podcast isn't about the parish, but it's worth listening to some thoughts on a much bigger tableau than just bourses inside the ice house. Featuring Cindy gallop is a terrific interview, elegantly compared by the isis to raise it to Luca. Thanks for listening to the exchange. Invest Weekly. I will be back next week. My name is Patrick Al Young. If you can't wait until the next weekend, don't forget, you could be reading extended fast daily extend, invest $200 per user a year. I'd be happy to welcome you as a subscriber anywhere in the world. Email mePatrick@derivativesvisiondotcomorindeedgotothewebsiteexchangeinvest.com finally, if you have a chance to please feel free to drop by the various websites and leave some feedback about this podcast, I'll be delighted to hear from you directly, Patrick Adrift as <inaudible> Dot Com or alternatively, feel free to say something on one of the appropriate sources where you might've been listening to this podcast next week. I'm sure there'll be more in LSEG and definitive, but much, much else besides as well. Thanks and have a great week in markets.
