Oct 15, 2022 11 min read Exchange Invest Weekly Podcast

165 Exchange Invest Weekly Podcast October 15th, 2022

Bombay Stock Exchange‘s SME platform has achieved a milestone of no fewer than 400 listed companies.

Transcript:

This week in the parish of bourses and market structure:

A new technological architect for Hong Kong Exchanges

Half a billion dollars were hacked at Binance

New York Stock Exchange and Johannesburg Stock Exchange announced their co-operation

Meanwhile, the Nickel nightmare lawsuit against LME is given grounds to proceed

…and the New Zealand Exchanges Chairman succession plan has been announced

My name is Patrick L. Young

Welcome to the bourse business weekly digest

It’s the Exchange Invest Weekly Podcast Episode 165.

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 events and happenings of the past 7 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

And indeed, we had a very special issue this week to boot:

In memory of reaching the 60 years plus 007 days milestone since the movie “Dr. No” launched the world’s most famous espionage movie series, we proudly presented a special edition of Exchange Invest on Wednesday 12th of October, Issue# 2478.

This tradition follows on from our Yogi Berra tribute edition EI 596 On (September 24th, 2015), where the unique polymath ‘quote machine’ baseball star offered his exchange insights from beyond the grave.

This time around, “PLY” did not add any further comment to the day’s newsletter, but instead cede the ‘pithtaker in chief’ role to various cinematic highlights of 007 bon mots, as well as a few carefully curated snatches of Ian Fleming’s own words from the Bond novels.

After all, as Ian Fleming noted:

“Never say ‘no’ to adventures. Always say ‘yes’, otherwise you’ll lead a very dull life.”

In the end last week, we didn’t reach 78 parish notes a la Martin Luther to kneel to anything but by the time CNBC had an interview with the chairman of Chicago Mercantile Exchange, Terry Duffy, they’d quite forgotten to already ask about his mooted brokerage subsidy within CME Group. Exchange Invest has laid the groundwork research here that is not being seen elsewhere about the business of brokerage and how CME might or might not fit into that model with the help of our resident Exchange Invest superhero “Captain Conflict of Interest!”

More from Exchange invest to catch our back issues there if you’re a subscriber.

Finally, we’re escaping the COVID era and travel is normalising across the globe. Conferences are reconvening and companies are organising more in person meetings.

After that rather epic week where I think it was fair to say Exchange Invest has an advantage at the apex of insight and pith that was unseen elsewhere. You might like to consider yours truly PLY, as a booking for your next event.

We’ve published a sub one-minute promo video: Patrick L. Young Showreel You can find it on YouTube, and gives you some idea of how we can discuss the new frontiers of digital finance and every possible angle, the legacy of TradFi, and indeed, if you have a motor sporting event needing commentating. Well, you know where to call.

In news this week, the Hong Kong Exchange’s CEO blog opened a new chapter by Nicolas Aguzin, the HKEX CEO, not his new chapter, of course, he’s been blogging for a year or so now since he took office, but rather talking about the future of Hong Kong now that it’s gradually working its way towards lifting its COVID restrictions.

As he noted:

The Hong Kong superconnector role is unique, not because there is no alternative, but because Hong Kong adds value on so many levels. And nowhere is this more apparent in capital markets.

Bravo! A great comment and hopefully the SAR will be much more open for visitors as it has been for business during the course of the pandemic.

Over in the UK subsidiary of Hong Kong Exchanges, the LME is seeking a market opinion on a possible ban for new Russian metal entering the warehouse system. At the same time, slightly less pleasing news for LME, although altogether not surprising, a UK court has said that various plaintiffs including Elliott and Jane Street can sue the LME over their canceled trades during what Exchange Invest terms the ‘nickel nightmare’.

Collaboration of the week, the New York Stock Exchange, they’ve now managed a trifecta of such MoU’s the course of the last 3 months alone, New York Stock Exchange and the Johannesburg Stock Exchange announced collaboration on dual listing. Of course, what we saw previously was the end of July there was an agreement with SGX and then also Tokyo Stock Exchange, which followed last month.

The issue, of course, is how much NYSE can benefit from what amounts to an MoU formal structure, which traditionally in the bourse parish have proven mostly not to be worth as much as the frequent flyer miles earned in their creation. Then again, NYSE is a different breed to most of the parish. So if anybody is going to make cooperation turn into core business, I’m sure they will.

Incredible numbers out of Interactive Brokers this week, they have doubled their client accounts in no less time than 24 months to 2 million people.

In fact, Paul Conn in IPO-Vid was discussing the retail revolution just the other day, unless you’re struggling to believe this, IBKR having 2 million clients is a good enough piece of evidence for me to believe that Paul’s protestations that the retail revolution is real, genuinely is very, very real indeed.

Hong Kong bourse, they took a sensible and sustainable view on climate disclosure. They’re saying that a one-size-fits-all approach is not desirable when it comes to disclosure standards. In fact, Hong Kong Exchanges executives noted:

“It would be irresponsible for us to force firms to prepare disclosures that they don’t have the bandwidth for.”

Pragmatism and not hot air. Very very welcome from Hong Kong Exchanges.

Meanwhile, Tadawul Group has awarded the $37 million fit-out contract for their new headquarters.

Plaudits to Aquis Exchange CEO and founder Alasdair Haynes, who produced excellent Op-Ed for The Daily Telegraph this week, asking for a more sensible tax regime to help the UK stock markets maintain their prime listing venue and secondary market position.

It was a busy week for new markets in the parish, all the information were in Exchange Invest daily, the newsletter no person can afford to be without in capital markets and market structure. For the sake of this podcast, here are a few edited highlights:

The Bombay Stock Exchange have received SEBI’s in-principle approval for their Social Stock Exchange (SSE) as a separate unit.

Meanwhile, Piyush Goyal has urged the BSE to set up an interface with the startup ecosystem.

Something PLY firmly believes is a great idea for the right sized/scaled/managed exchanges.

Egypt is planning a new derivatives market for currency hedging and that came in the same week that it was rumored that Egypt and other African and Asian exchanges have been discussing carbon trading platforms.

Finally this week in new markets, the Uzbek Commodity Exchange is planning to open a trading platform in the United Arab Emirates.

Deals news this week, the Australian takeovers saga, that became an epic battle seems to be going from epic to farce the 2 year-long attempts to buy Australian share registry firm Link Administration (LNK.AX) is turning into a farce. One day which is not turning into a farce it seems to be headed towards closure rapidly Chinese crypto Mogul Leon Li has sold his controlling stake in the exchange firm Huobi to the Hong Kong-based About Capital Management.

As stated previously in Exchange Invest Issue 2429 Leon Li was reportedly seeking $3 billion for his 60% stake in Huobi.

Finally this week, a little bit of news from Central Europe, the Warsaw Stock Exchange main parent body has granted a revolving loan of up to 100 million Polish Swati, that’s Towarowa Giełda Energii S.A, which is better known as of course, the energy market division of the Polish exchange trading electricity as PoIPX, etc. that’s 100 million Polish Swati (circa $25 million in today’s money).

If you’re trying to work out what to do about today’s money or indeed the money of the future, then you ought to be considering reading my latest book “Victory or Death?” – Blockchain, Cryptocurrency, and the FinTech World. It’s published by DV Books and is distributed by Ingram worldwide.

Meanwhile, while you’re waiting for your copy of “Victory or Death?” to arrive, check out our Livestream IPO-Vid, it’s on at Tuesdays at 6pm London time, 1 pm New York time. The live video show is available also in back issue on LinkedIn, Facebook, and YouTube by searching IPO-Vid.

This week, we had a marvelous guest Olivier Gueris: Building Better Markets All Over The World talking about his experience being a leading team member amongst no fewer than 7 major exchange builds on 4 different continents, and we’re gonna be talking about Delivering New Parish Tech in Episode 81 coming next Tuesday with Mack Gill.

Product news this week, it’s been a good news week for single stock futures. ADX in Abu Dhabi, they added 5 more single stock futures to their derivatives markets, while similarly, the Turkish derivatives exchange part of the Borsa Istanbul group was adding new single stock futures contracts and changing the spec of various this week.

China will include eligible dual-listed shares in the Stock Connect scheme which is welcome news for parties at either end north or southbound all of that unique connector between the special administrative region of Hong Kong and mainland China.

GlobalConnect GPW (Warsaw’s stock exchange’s new international market) is scheduled to launch on the 4th of November, while Tokyo Exchange has confirmed their topics restructuring nearly 500 firms have been removed from the Topix index as part of the cash market reorganisation.

Exciting new carbon listing rules have come from the London Stock Exchange this week, while the Bombay Stock Exchange‘s SME platform has achieved a milestone of no fewer than 400 listed companies.

Technology news this week, the SEC had a technical glitch, having to reopen comment periods that the technology had closed off an embarrassing technical glitch for the SEC after they have been berating various practitioners for errors.

Meanwhile, BMLL have launched an intuitive no-code data visualisation tool for US and European equities, and ETFs.

We just love low code, no-code, we use it all the time between exchange apps within our offices. And indeed, it’s very exciting to hear BMLL combining no-code with data visualisation in an exciting sandbox in which I’m sure many of us will want to play.

ICE global network have expanded their wireless services in Europe.

Binance had a mega hack, at first, they said it was just $100 million in the Financial Times but in the end, it turned out to be some $570 million. Hackers, in this case, not stealing the money, they literally made it out of thin air. An embarrassing more than half a billion dollars worth of Binance coin tokens were created and promptly stolen due to a software issue

Regulation news this week, the SEC staffers have been annoyed about Gary Gensler self-promotion over the Kim Kardashian case. At the same time, the Wall Street Journal was saying the SEC should leave Kim Kardashian alone.

I disagree. Yes, the SEC is trying to do too much during the Gensler era chairmanship, and some of it is now appearing somewhat slapdash. However, when there’s one rule for influencers and another for hoi polloi – well down that road madness lies even if the USA does have a weird plutocratic indulgence facility, or so it seems on occasion.

A Second Crypto Group are objecting to the CFTC’s use of chatbots to serve legal papers. This, of course, all relates to Ooki DAO’s, where in some cases, participants are saying that fear may be keeping the Ooki DAO voters from mounting a defense against the CFTC. And at the same time, the chairman of the CFTC Chairman Rostin Behnam said that the case against Ooki DAO was so egregious, the CFTC had no choice.

It would appear that in the haste to endorse the simplistic juvenalia of millennial DAO thinking, a lot of brains got left behind, and thus we have a mess. CFTC has elegantly and ruthlessly exploited this in the hope of getting a starter precedent, which they can in a future tweak to decimate the DAO cult. I wasn’t sure it would work out exactly this way but it was always clear DAO’s didn’t share the first two letters of the word “daft” without some coincidence.

Of course, it wasn’t just youth rushing to embrace DAOs, a lot of middle aged folk get caught up in the unthinking upending of corporate structure which doesn’t correlate with umpteen millennia of legal civilization (in any code). Now, it’s a rock-hard place repo for the DAO holders. Don’t vote and the President is made. Vote to influence the running of the organisation and the CFTC will seek to come after you. An elegant regulatory syllogism for our approaching post analogue times.

Career news this week, big news from the New Zealand Exchange. Rob Hamilton has been appointed New Zealand Exchanges Board Chair-elect following the announcement in February that current Board Chair James Miller is to retire after next year’s annual shareholder meeting. It was also announced that Rachel Walsh would be joining the NZX Tax Board effective immediately.

That’s major parish news about the succession plan and I wish to applaud the excellent efforts of James Miller and wish him and his successor all the very best as they look forward to interesting pastures new.

Hong Kong Exchanges we’re pleased to announce this week that Mark Carr has joined the group as Managing Director and Chief Enterprise Architect. Given that Mark Carr previously operated in a similar role for that behemoth of e-commerce and concentrated low latency, high volume speculation the Hong Kong Jockey Club, it looks like a very sound HKEX hire to me.

Former head of equities at LCH Alex Crunic, he’s taken on the CEO role at the Kuwait Clearing Company (KCC).

NGX Group in Nigeria have announced Umaru Kwairanga as the new chairman, and Erica Bourne is going to join the London Stock Exchange Group as Chief People Officer.

In “big world” this week, it’s interesting or perhaps scary to note ladies and gentlemen that the total assets of China’s securities firms hit 1.49 trillion US dollars. (10.5 9 trillion Yuan), i n the same week, US government debt surpassed $31 trillion.

And on that mysterious and magnificent note ladies and gentlemen, my name is Patrick L Young, builder of exchanges the world over, and publisher of Exchange Invest.

I wish you all a great week in blockchain, life, and markets.

LINKS:

HKEX CEO Blog – A New Chapter Begins… Written By Nicolas Aguzin, HKEX CEO
HKEX

LME Seeks Market Opinion On Possible Russian Metal Ban
Reuters

LME Potential Russian Metal Supply Ban Discussed In Paper
Bloomberg

UK Court Says Elliott, Jane Street Can Sue LME For Cancelled Nickel Trades
Reuters

Hedge Fund Elliott, Jane Street Can Sue LME Over Nickel Trades, Court Rules
Bloomberg

The New York Stock Exchange And The Johannesburg Stock Exchange Announce Collaboration On Dual Listings
ICE

Interactive Brokers Doubles Client Accounts To 2 Million In 24 Months
FinanceFeeds

Climate And Sustainability: Hong Kong Bourse Says One-Size-Fits-All Approach Not Desirable When It Comes To Disclosure Standards
South China Morning Post

Tadawul Group Awards $37mln Fit-Out Contract For New HQ
ZAWYA

The Tax Cut Needed To Stop Britain’s Businesses From Flying The Nest
Daily Telegraph