Friday, July 29, 2011

110729 News: Wounded Cadel that Roo...HFT favour, MTF, I/Op, Asian mergers, RBA Hey!

Well, the wounded Wallabies 39 beat SA 20; know the rest;

Hope that wasn’t a misleading headline.

Gotta dash, so what did I get a chance to observe?

Hirander moves from Algo. Best of luck and wishes to him. I don’t think his efforts in getting Chi-X Europe off the ground will ever be fully appreciated.
I though Robert Barnes, UBS MTF, quote odd in so far as it drew attention to a moot point.
With the controversy...oops ongoing debate...around dark pools, some people argue that once you reach a threshold, say 5% of ADV, then your flow should move out of the dark into the light.
I liked the Asian Merger Mania comments.
Australia gets a Bullion exchange! Fancy that.

Interoperability gets a started in Europe.

Australian RBA cries about the irresponsible US and Europeans. You big boys pay attention to us. We’re important! Look at the economist slides, we’re responsible for 1% of world debt. 1.29% of carbon pollution. 1% of interest rate swap exposure. Etc.
(What are they thinking? Who cares about us?)

Amazed at how green Iberdrola and power generation in general has become.

Eat more of our national logo, Roo, is good for you!

Have a great w/end all.



The World Federation of Exchanges today published market data for the first half of 2011.
Compared with the first six months of 2010, volumes were stable (-0.8%), but this relative stability conceals significant regional differences as the Americas’ trading decreased by 9.3% whereas Asia-Pacific’s volumes rose by 13.8%.

Hirander Misra, has quit with immediate effect as chief executive officer of Algo Technologies, the fintech vendor he helped set up only a year ago.
Full story:

All our speculation aside we don’t expect to see much if any merger mania running wild in Asia. Let me ask you this would you rather pay US8Billion for Australia or US6Billion for both London and Toronto? The fact of the matter is that Asia’s exchanges have valuations based on monopolies and are not in line with competitive businesses.

Andrew Walsh, managing director of Australia's dominant share information and trading system IRESS Market Technology Ltd., says the entry of a second trading venue may attract other venues and further emphasise trading technology and order execution speed for fund managers and brokers.
IRESS is used by 90 per cent of desktops and interfaces that interact with the Australian stock market. The company has a range of products. It provides discounts based on volume.
IRESS competitor Bloomberg LP charges about US$1,800 a month. But Bloomberg has not become a significant competitor to IRESS, says Walsh. He described Bloomberg as “being very popular for its chat community”.

*** launches 19th Sept 2011

After the collapse of its plan to merge with the London Stock Exchange Group, TMX Group is thinking Maple.
The London Stock Exchange pulled out of its $3.5 billion merger with TMX when it failed to win two-thirds approval from TMX’s investors.
Before the collapse, Maple offered $3.7 billion in the hope of convincing TMX investors to keep the exchange in Canadian hands.
The Maple group includes CIBC World Markets, National Bank Financial, Scotia Capital and TD Securities Inc., as well as Alberta Investment Management Corporation, Caisse de depot et placement du Quebec, Canada Pension Plan Investment Board, Fonds de solidarite des travailleurs du Quebec (F.T.Q.) and Ontario Teachers' Pension Plan Board

The success and growth of liquidity within UBS MTF, says Barnes, is measured in terms of the number of times the dark pool matches 5% of the daily activity in a stock, relative to continuous and auction trading on the primary market.
The dark pool executes trades at the mid-point price of the primary market of a stock’s listing and charges 0.1 basis points for execution, which Barnes says can make other brokers more comfortable in joining UBS MTF without feeling as though they are “unduly enriching a competitor”. By comparison, BATS Europe’s dark book charges 0.15 bps, while Chi-Delta, the dark pool operated by Chi-X Europe, charges 0.15 bps for certain (i.e. non immediate-or-cancel) order types and 0.3 bps for all other non-displayed executions.

HKEx reportedly is interested in buying LSE
Several newspapers reported that Hong Kong Exchanges and Clearing might be interested in acquiring London Stock Exchange Group. LSE CEO Xavier Rolet said recently that the exchange group will "look both West and East" to expand, after withdrawing a bid for Canada's TMX Group. However, market insiders said the merger is unlikely. "The possibility is low," said Alex Au, director of Richland Capital Management. "There are political issues. I don't think the UK government will let its exchange be controlled by them." Bloomberg (22 Jul.), Reuters (21 Jul.), The Standard (Hong Kong) (22 Jul.), The Independent (London) (20 Jul.)


Clearing will be charged at CHF 0.01 per clearing transaction if the total current volume of a client exceeds 1.5 million clearing transactions per month.


UBS MTF, the multilateral trading facility operated by UBS, today announced the activation of EuroCCP to join SIX x-clear Ltd as clearing counterparties for cash equity trades executed on UBS MTF.


Members will recall that with the transfer in market supervision from ASX to ASIC last August, ASIC was given the power to charge market operators for market supervision. For the 2011 Financial Year, ASIC is recovering $7.74m in fees, including a contribution of $4.2m from the NGF for ‘transitional costs’, $3.4m from ASX and SFE directly, with the balance coming from the other small market operators. The Government is expected to announce shortly its proposals for cost recovery after the commencement of Chi-X. Consistent with other Government arrangements (for example, AML), it is expected that market supervision costs will then be recovered not only from market operators, but in addition, from market participants directly. Consultation is expected in July on these proposals, and we will be endeavouring to minimise this further impost on Members.

HFT – Dispelling the myths
Contrary to popular belief, evidence from markets globally proves that high-frequency trading (HFT) adds value to securities markets, according to Alex Frino, CEO the Capital Markets Cooperative Research Centre (CMCRC), an Australian-based research body.

ECB SETS T2S FRAMEWORK AGREEMENT DEADLINE; UK LOOKS TO OPT OUT The European Central Bank has set an October deadline for its final offer to central security depositories (CSDs) on a framework agreement for the Target2Securities (T2S) system. However, the UK now seems certain to turn its back on the project.
Full story:

Glenn Stevens, governor of the Reserve Bank of Australia, said that "in both the US and European cases, the process of allowing things to go right to the brink of a very disruptive event before an agreement is reached on the way forward has been a source of great uncertainty and anxiety around the world ... [and] that anxiety has extended to Australia". MarketWatch (25 Jul.)


ESMA Issues Consultation on High Frequency Trading
The European Securities and Markets Authority (ESMA) published a consultation that outlines proposals for detailed guidelines for trading platforms, investment firms and competent authorities to address challenges of a highly automated trading environment. The guidelines seek to clarify the obligations of trading platforms and investment firms under the existing EU legislative framework. They also cover four areas: electronic trading systems; fair and orderly trading; preventing market abuse and in particular market manipulation; direct market access and sponsored access. ESMA will host an open hearing on September 27 to discuss the topic further. The deadline for comment is October 3 and ESMA expects to publish final guidelines at the end of 2011.

Australian Regulators Meet to Discuss Issues Facing the Industry
The Board of the Finance Industry Council of Australia (FICA) held talks with the APRA Chairman and Members, and the Australia Securities and Investments Commission (ASIC) Chairman and Commissioners, on regulatory and other issues facing the industry. International developments that have the potential to have an impact on the Australian industry were discussed, including the Basel III capital and liquidity standards, the influence of technology on securities markets and US tax law. Domestic issues around banking reform, superannuation reform, competition in exchange-traded markets, and the recent superannuation and insurance reviews were also covered.


SOUTH CHINA MORNING POST: HSBC Plans to Set Up 'Dark Pool' for Retail Investors
Local regulators are expected to closely scrutinise HSBC (SEHK: 0005, announcements, news) 's plans for a retail version of a "dark pool" stock market amid concerns about investor protection and the competitive impact on the city's main bourse.
HSBC has already abandoned plans to switch by default thousands of existing securities clients to the "dark pool" platform, instead the bank will allow investors to choose to sign up for the new service.

Deborah Fuhr, BlackRock
Leaving BlackRock will be Deborah Fuhr, "who made a strong contribution to ETF research during her tenure," according to Christine Hudacko, a corporate communications specialist in the company's San Francisco officer.


Wounded Wallabies meet Springy Boks.
I expect the game plan that the South Africans will bring will be similar to the Bulls: put boot to ball and chase hard. Morne Steyn will send the ball high into the night sky, making sure it lands outside the 22, with Bjorn Basson and Lwazi Mvovo chasing hard to get a touch.
If the ball falls right for the Springboks, they are in a position to play the ball. If they knock the ball on and the scrum is in favour of the Wallabies, it will be outside the 22, which means they will have to run the ball - and that is what the Springboks want.
They want to apply pressure to the Wallabies and make them attack from a long way out. If the Wallabies make a mistake, Steyn steps ups and boots three points.

As of the end of March, the federal government owed $14.27 trillion to a wide variety of holders of U.S. Treasury securities. This graphic depicts who those creditors are and the amount they have bought in treasuries. Click on the arrows next to a category to expand its subcategories.

Green boost to Iberdrola
A sharp rise in production from its renewables portfolio has underpinned the first half earnings of Spanish energy giant Iberdrola. The company, which is the fifth biggest electricity company in the world by market capitalisation, said non-hydro renewable energy produced 15,017 million kWh in the first half, mostly from wind, and accounted for 20.1 per cent of its overall production. For the first time, this exceeded output from nuclear plants (16.4 per cent) and hydro (14.4 per cent).

Kangaroos: From pests to profits
Kangaroo populations are robust and abundant. In 2010, for instance, there were an estimated 25 million– among the largest populations in the world of large vertebrates.
Though it takes about one and half kangaroos to provide as much usable meat for human consumption as a sheep (around 12kg from a kangaroo, and around 18kg from a sheep), kangaroos need less feed and water.
Recent estimates suggest that it takes almost three kangaroos to eat as much as a sheep. Kangaroos’ soft feet mean that “growing” a couple of kilos of kangaroo meat in Australia’s fragile rangelands has much less impact on native vegetation than a couple of kilos of sheep or cattle.
Cows and sheep burp methane, a greenhouse gas at least 25 times more potent than carbon dioxide. These emissions from stock make up a significant proportion of Australia’s annual emissions (10-25%, depending on method). Kangaroo digestion uses a totally different chemical pathway from sheep and cattle, and produces virtually no methane.
... the idea that ‘roos are simply pests to be removed runs deep in the culture.

The Old Balloonist joke:
A man in a hot air balloon realized he was lost. He reduced altitude and spotted a woman below. He descended a bit more and shouted, "Excuse me, can you help me? I promised a friend I would meet him an hour ago but I don't know where I am."
The woman below replied, "You're in a hot air balloon hovering approximately 30 feet above the ground. You're between 40 and 41 degrees north latitude and between 59 and 60 degrees west longitude."
"You must be in Information Technology," said the balloonist.
"I am," replied the woman, "how did you know?"
"Well," answered the balloonist, "everything you told me is probably technically correct, but I've no idea what to make of your information and the fact is, I'm still lost. Frankly, you've not been much help at all. If anything, you've delayed my trip."
The woman below responded, "You must be in Management."
"I am," replied the balloonist, "but how did you know?"
"Well," said the woman, "you don't know where you are or where you're going. You have risen to where you are, due to a large quantity of hot air. You made a promise, which you've no idea how to keep, and you expect people beneath you to solve your problems. The fact is you are in exactly the same position you were in before we met, but now, somehow, it's my fault."

How can you say luck and chance are the same thing? Chance is the first step you take, luck is what comes afterwards."
--Amy Tan,
American author

Figuring out who you are is the whole point of the human experience."
--Anna Quindlen,
American journalist and author

Scott Riley
Business Development

8th Floor 50 Bridge Street Sydney Australia 2000
(Off)+61 (0)2 8916 9634 (Mob): +61 (0)418 117 627

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