Tuesday, June 7, 2011
The queen visits EMCF!
LCH in play. WooHoo! The LSE bid? Nah, don’t believe it. The valuation is preposterous and they’d be more anxious to leverage their own business (CC&G). Euronext? I can believe it. LCH.CN at the time of the merger valued at 1.2byn, and Euronext now offering under .5byn. That I can believe. Of course it is all about cherry picking the OTC Clearing business. I think NYSE.Euronext may as well keep on building their own CCP and fuelling it with their own liquidity. Markit / ICAP would be an interesting combination to go after the OTC Derivnet swap clear business.
The Nasdaq bid makes the most sense to me in terms of consolidation and value creation for both owners and users. Same old problem. Will users follow commercial logic or commercial vested interests.
The Reserve Bank of Australia issued the Index of Commodity Prices for May 2011. You can view this statistical release at:
This was going to be the piccie of the week. My feeling, and in the words of a couple of Aussies largest fund managers, Commodities are ‘minutes to midnight’. One look at this graph screams ‘bubble’ to me. I also think Glencore, with all their experience, would know when to sell out of commodities.
NIEDERAUER IS OPTIMISTIC ABOUT MERGER, SAYS ASIA NEEDS MORE TIME
NYSE Euronext CEO Duncan Niederauer said feedback from European regulators on the exchange operator's proposed merger with Deutsche Boerse has been "very constructive". The deal is on track for a decision this year, he said. Niederauer, who was recently in Asia, said it's too soon to go after any major acquisitions in that region. "One of my take-aways from Asia is they want to be part of it; they just need time," he said. "It's going to be a while. I think it's five to 10 years out. Most Asian exchanges have not demutualised yet and do not have a public currency." Bloomberg (31 May.)
INSTINET LAUNCHES AUSTRALIAN DARK POOL
Electronic trading and brokerage giant Instinet has launched a liquidity pool for Australian equities.
More on this story: http://www.finextra.com/news/fullstory.aspx?newsitemid=22607
AUSTRALIAN DARK POOLS UNFETTERED BY REGULATIONS
The expected introduction of dark pool trading rules in Australia as part of market-wide regulatory changes should not pose major obstacles to the future development of these off-exchange liquidity venues, market participants say. However, the impact of planned regulation may depend on the kind of flow – and particularly the size – that the pool attracts
CHI-X AUSTRALIA STARTS SIGNING UP PARTICIPANTS.
Among the 15 banks and brokerages to sign up include Citigroup, UBS, Deutsche Bank, Credit Suisse, Goldman Sachs, JP Morgan, Macquarie and Merrill Lynch. Combined these trading houses provide the biggest turnover for the Australian Securities Exchange.
CHI-X AUSTRALIA SAYS 15 BROKERAGES WILL PARTICIPATE IN LAUNCH
Chi-X Australia, which is owned by Nomura, said Citigroup, Goldman Sachs Group, UBS and other brokerages will participate in its late-2011 launch. Australia approved Chi-X's entry last month, ending ASX's monopoly. However, Chi-X could face challenges in the market because of ASX's dominant position, analysts said. Reuters (01 Jun.)
ASX TAKEOVER RISK CAN BE SOLVED: FIRB
besides the risks identified by the board other aspects of the merger could also stand in the way of a future tie-up. Parliament must approve any change to a 15 per cent ownership cap on the ASX.
SEBI GIVES GREEN LIGHT TO BOMBAY SME EXCHANGE
India’s Bombay Stock Exchange (BSE) has received an ‘in principal’ approval from regulator the Securities and Exchange Board of India (SEBI) to launch SME Exchange, which will list at small and medium enterprises (SMEs). The SME Exchange is expected to launch ‘imminently’, though the BSE declined to give an exact date
LSE’S TURQUOISE TAKES FIRST STEP IN DERIVATIVES OFFENSIVE
Turquoise Derivatives will be the first European derivatives venue to offer a maker-taker pricing tariff. Members will be charged £0.20 for taking liquidity and receive a rebate of £0.05 for adding liquidity. Clearing, by Anglo-French central counterparty (CCP) LCH.Clearnet, will cost £0.02 per trade.
LONDON STOCK EXCHANGE GROUP PLC - PUBLICATION OF CIRCULAR AND PROSPECTUS - LONDON STOCK EXCHANGE GROUP-TMX GROUP MERGER
On 9 February 2011 London Stock Exchange Group plc ("LSEG", "LSEG Group" or the "Company") and TMX Group Inc. ("TMX" or "TMX Group") announced a proposed recommended merger (the "Merger") to create a new international exchange leader (the "Merged Group"). Today, the Board of LSEG announces that LSEG's shareholder circular (the "LSEG Circular") and prospectus (the "Prospectus") relating to the Merger have been approved by the UK Listing Authority ("UKLA"), published and will be posted to LSEG shareholders as appropriate
INNER MONGOLIA OKAYS RARE EARTH BOURSE
The government of North China's Inner Mongolia autonomous region has given green light to the establishment of a rare earth exchange in the city of Baotou, local authorities confirmed
EXCHANGES FIGHT FOR LCH.CLEARNET
By Jeremy Grant in London
The LSE has offered €21 a share for LCH.Clearnet, valuing it at €1bn, one person said. However, the LSE on Saturday distanced itself from any move, saying it noted “recent press speculation” regarding it and LCH.Clearnet and “confirms that it is not engaged in any discussions with LCH regarding a possible transaction”.
NYSE Euronext has teamed up with Markit, a financial information company specialising in OTC derivatives, in a €10 a share bid that values LCH.Clearnet at under €500m, the first person said
Nasdaq OMX has tabled a bid that would value LCH.Clearnet at €350m, the first person said. “The offer’s a bit low and complicated,” that person said, referring to how Nasdaq has proposed to include in its cash offer the existing clearing businesses it owns in Europe
a takeover of LCH.Clearnet would be complicated because it has 98 shareholders, including NYSE Euronext with 9 per cent and the London Metal Exchange with 8 per cent.
The DTCC deal collapsed after the emergence of a consortium of 11 banks – many of the same ones affiliated with the SwapClear service – joined forces with Icap, the world’s largest inter-dealer broker, in 2009 for a €11 a share cash offer valuing the UK clearer at about €830m
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NYSE EURONEXT PLANS DUAL CLEARING VENUES WITH LCH
Exchange wants parallel European clearing services
LCH to handle OTC trades, Eurex to clear listed products
NYSE BID FOR LCH WOULD GIVE MARKIT OTC BIZ –SOURCE
NYSE Euronext's bid for European clearinghouse LCH.Clearnet would give Markit a majority stake and control of the lucrative over-the-counter swaps business, a source familiar with the plan said on Wednesday.
Who are the owners of Markit?
Markit is a private company headquartered in London. The company is owned by employees, private investors, private equity investors and numerous buy-side and sell-side financial institutions. Our single largest shareholder is an established private equity firm and no single institution or individual owns 15% or more of the company.
CREDIT SWAPS INVESTIGATED BY U.S. JUSTICE DEPARTMENT (UPDATE3)
JPMorgan is Markit’s largest shareholder, with at least 1.67 million ordinary voting shares out of a total of 14.38 million, according to filings at U.K. Companies House. Bank of America Corp. is the second-largest, with more than 1.52 million shares held through its own units and those acquired in its purchase of Merrill Lynch & Co. last year. Royal Bank of Scotland Group Plc owns at least 1.35 million shares after its purchase of ABN Amro Holdings NV, while Goldman Sachs Group Inc. has about 1.11 million shares, the filings show.
CLEARINGHOUSES OPPOSE EMIR CLAUSE ON ACCEPTING COLLATERAL
The European Market Infrastructure Regulation text contains a clause that appears to require central counterparties to accept certain liquid assets, such as gold and high-quality corporate bonds, as collateral. Clearinghouses are voicing concerns about the clause, saying collateral must meet their risk-management standards. "A CCP should not be forced to accept collateral that does not fit with its risk-management regime," said Marcus Zickwolff, head of system design at Eurex Clearing. Risk.net/Risk magazine (subscription required) (30 May.)
BOE OFFICIAL SAYS CLEARERS COULD MONITOR MEMBERS' ROBUSTNESS
Paul Tucker, deputy governor of the Bank of England, said securities clearinghouses could bolster awareness of weaknesses in the financial system. He also said clearers should have clear, specific plans about how they would wind themselves up if they were on the verge of collapse. Reuters (01 Jun.)
CLEARING HOUSES AS SYSTEM RISK MANAGERS
Speech given by
Paul Tucker, Deputy Governor Financial Stability, member of the Monetary Policy
Committee and member of the interim Financial Policy Committee
POLISH CLEARING HOUSE PREPS FOR LAUNCH
WALL STREET CALLS FOR MORE DELAYS TO DODD-FRANK RULES
Financial market trade groups have written to industry regulators asking for more time to review new swap trading rules.
More on this story: http://www.finextra.com/news/fullstory.aspx?newsitemid=22616
DARK POOLS, HFT AND COMPETITION
A speech by Shane Tregillis, ASIC Commissioner, at the Stockbrokers Association of Australia Conference 2011, Hilton Sydney, 26 May 2011
CINNOBER APPOINTS ULF AXMAN SALES EXECUTIVE
WE'VE ALL GOT GOOGLE-VISION
Ross HillTwo people can type the same word into Google and get completely different results – that's filtering. But is it up to us or the search engine to broaden the vista?