Feb 9, 2024 11 min read Exchange Invest Weekly Podcast

231 Exchange Invest Weekly Podcast February 10th, 2024

This week in the parish of bourses and market structure: Nasdaq Outperforms, SiX 36 Months To A Deal?, NYSE Reddit?, And A GPW Management Shake Up As Expected…

Transcript:

This week in the parish of bourses and market structure:

Nasdaq Outperforms

SiX 36 Months To A Deal?

NYSE Reddit?

And A GPW Management Shake Up As Expected…

If you are reading Exchange Invest

My name is Patrick L Young

Welcome to the Bourse Business Weekly Digest Episode 231

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 and happenings from the past 7 days can be found in Exchange Invest Daily subscriber newsletter, the unique guide to the bourse business sent daily to your inbox.

More details at ExchangeInvest.com

In Bitcarnage this week:

It was a case of Death But No Transfiguration as FTX is close to remarkably a full repayment of creditors but the FTX Exchange - as Exchange Invest / Bitcarnage has always argued - is absolutely dead.

For those who wonder why they subscribe to Exchange Invest or Bitcarnage, we prove our worth once again - having made it clear from the very earliest talk of a resurrection that FTX V2.0 was not a viable entity. It was always a pipedream and I suppose the liquidator can now say their conscience is clear as no investor would come forward. However, this process was always a massive hot air waste of time with navel gazing idiocy, believing there was a way to bring back a platform which had not merely broken the trust of its user base but in fact amounted to essentially a sleazy casino betting against its perceived “mug punters” AKA anything but a sound exchange model.

Elsewhere in Bitcarnage the OPNX debt claims platform run by the jailbird Su Zhu and his 3AC co founders has closed down - or at least it will close down by St. Valentine's Day, not before time, some may argue.

Meanwhile, Binance is struggling with redemption as regulators such as in the UK prove uncomfortable with a convicted criminal enterprise.

This week in Bitcarnage, we also discussed the ongoing institutional failure of crypto and even DLT. Treasury Secretary Janet Yellen testified to Congress concerns about the crypto economy specifically “StableCoins” this week for instance.

Then the first US Bank to let customers keep cryptocurrency in checking accounts exited crypto. The fabulously named, if not perhaps entirely balance sheet representative, Vast Bank has distributed itself back to fiat only mode.

This reminds me of the excellent Chris Edmonds’ of ICE’s article from last year: The Failed Promise Of Unregulated Crypto - which I still find true with the exception of some pockets within banks, where folks are employed to ‘do’ crypto or DLT and hence are religious zealots for its promotion. Or: talking their own book - distribute your interpretation as you will!

The good folks of GARP (the Global Association of Risk Professionals) published many excellent pieces and with Is Institutional-Grade Blockchain Ready For Its Great Leap Forward? They raise questions to which the answer appears to be a rather resounding - “no not really.”

If you enjoyed this excerpt you may be interested to know that you can read Bitcarnage everyday in Exchange Invest. Alternatively, if you want to follow Bitcarnage, the daily update and happenings in the world of crypto and digital assets, you can find Bitcarnage as a standalone on Substack.

A wondrous event this week where I was honored to be the opening keynote speaker was the 26th Association of Futures Markets Annual Conference in Bangkok, Thailand hosted by TFEX (Thai Futures Exchange), a subsidiary of SET (Stock Exchange of Thailand). The Thai exchange has proved magnificent hosts for what was a magnificent opportunity to talk about emerging markets exchanges.

Meanwhile, lots of bearishness in London and let's just leave it at that. Endless bearishness, everybody concerned and as we'll see later in the career path, even the COO has left the London Stock Exchange coupe.

Slightly more optimistic news from Johannesburg, the JSE has launched an initiative to help South Africans get their 4.5 billion South African Rand in unclaimed dividends.

Then there was a rush of IPO optimism during the course of the week NYSE had been optimistic last week, NASDAQ the week before ASX reckons it will have a better second half, Moscow was looking at over 20 IPOs in 2024, and Bursa Malaysia thinks 42 is a ‘realistic’ target. 42 the ultimate answer to life the universe and not merely everything but happy bourse too, it seems.

It was an incredibly busy week for results in the parish all the details 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 let's look at some edited highlights.

There were terrific results this week from NASDAQ, MSCI, MarketAxess and Bursa Malaysia with DFM in Dubai up a staggering 124% and the privately held Euroclear net profit was a whisker under a billion Euros for the year +63%.

The Fabulous quarter for NASDAQ raises the key question when will investors re-rate the company's stock price after a fundamentally precipitated downgrade following the acquisition of Adenza last year. At least post results the stock moved above the level it was trading when Adenza was acquired but there is still a fundamental case for considerably more upside for the NASDAQ group.

In new markets this week, competition is afoot in Nairobi, Kenya for the fixed income market with the East African bond exchange licensed to take on the incumbent stock and bond exchange the Nairobi Stock Exchange.

In deals, not a terribly busy week, but two fascinating transactions. Well, one not even a transaction yet but nonetheless, there's several interesting strands to the Bloomberg headlines, Swiss bourse CEO eyes sizeable acquisition in the next 3 years. For one, it's a clear move by Jos Dijsselhof, the CEO of Swiss Exchange, to stomp on speculation he might not be around in office in the short to medium term. By the way, I have no opinion on this whatsoever, it's just rumors we keep hearing from different sources. At the same time, the process of managing the Swiss Exchange shareholder base is a tricky diplomatic act, particularly given the previous consensus balance between the smaller banks and the UBS-Credit Suisse duopoly, which has been (through no fault of SiX) undermined, or at least destabilized, by the UBS acquisition of Credit Suisse. Hence, this messaging is arguably as much for the ‘broad church’ of SiX shareholders as it is signaling intent to the wider world: Watch This Space within 36 months.

The one deal that has been announced this week, a non-renounceable issue, in other words, non-transferable rights on a one-for-two basis. 5 million Australian dollars in fundraising is being sought by the NSX (National Stock Exchange of Australia) one of many competitors to the ASX monopoly.

If you want to understand where the world of monopolies stock exchanges first competitive stock exchanges is and is going in the future you want to consider my latest book “Victory or Death?” Blockchain, Cryptocurrency, and the FinTech World, which will help you understand how technology is affecting life and markets. “Victory or Death?”is published by DV Books and is distributed by Ingram world wide.

While you're waiting for your copy of “Victory or Death?” to arrive, check out our live stream Tuesdays 5 o'clock London, 12 o'clock midday New York time - it's the IPO Video live show. Catch the back episodes on Linkedin on Youtube via IPO-Vid.

Our most recent episode was a cracking show From the Floor To The Future with Brad Schaeffer talking all about many different developments in and around the wonderful world of pitch trading and now electronic markets.

Our next show is going to be all about clearing, we're going to be talking to Rafael Plata, the boss of EACH (European Association of Clearing Houses) a great central counterparty show. Join us on Tuesday, 5 o'clock London, midday New York Time, 6pm Central European Time - IPO-Vid on Facebook, Linkedin and Youtube.

Our “Finance Book of the Week” this week was written by Carmen M. Reinhart and Kenneth S. Rogoff.

This Time Is Different, it was a breakthrough study exposing centuries of financial missteps, a comprehensive look at the varieties of financial crises, covering through eight astonishing centuries, government defaults, banking panics and inflationary spikes.

Our next book of the week will be unveiled on Saturday in EI Weekend Edition, which is our more macro read for the weekend. You can get that free, if you want to sign up at ExchangeInvest.com.

And don't forget, if you want all the inside track on the Exchange of Information, the parish of bourses marketplaces, exchanges market infrastructure, then you can also subscribe to Exchange Invest via ExchangeInvest.com for $375 per annum.

Product news this week, Reddit has apparently, according to Bloomberg, picked the New York Stock Exchange for its IPO, that's a big win for NYSE on an IPO first mooted at $15 billion market cap in 2021. However, Reddit management themselves may find their IPO in the crosshairs of angry keyboard warriors as indeed there's already been somewhat of a pushback in various chat rooms on Reddit itself.

Risk reported a possible shock a huge expansion of clearing mandates which may hook more funds into clearing within the Eurozone area. Risk reckons there's a compromise text rattling around the Euro Parliament which tries to further isolate the Eurozone through protectionism, I mean, induce more clearing into the continent of Europe making EMIR3.0 alterations that could even include Exchange Traded Derivatives under mandatory clearing. In other words, forced expansion to make the Euro less fungible.

In technology news this week rather shaking vendor news, we wondered was ION struggling with its bond leverage model after years hacks at the end of last week as they delayed their $1.8 billion leveraged loan sale?

Then they actually pulled the $1.7 billion leveraged loan repricing, they still got $120 million deal that apparently they got away. That's apparently to pay dividends to shareholders but anyway, the major $1.7 billion chunk must be viewed as somewhat of a humiliation in the open market for the bond savvy Andrea Pignataro and his FinTech vendor empire, perhaps following last year as a hack mess as we discussed previously in Exchange Invest - his offer was first pulled as a result of investor apathy and then cancelled as ION sought to reduce their coupon on $1.7 billion of their $3 billion in debt. It's certainly not the beginning of the end of ION but it is a wake up call.

Regulation news this week, the SEC have set new SPAC rules. They're seeking to limit rosy projections. Now there's a thing.

At the same time political refers to the ‘minefield’ Wall Street challenging Gary Gensler’s SEC in court.

Where the Gensler SEC has failed is an explaining or bringing widespread backing for what amounted to a fundamental expansion if not perversion of the original simple mandate for the SEC. The expansion into activism such as greenery as the apotheosis of control freak interventionism (masquerading as government) by what might be described as the educated stupid class in the modern world. Vastly expanding regulatory fiat doesn't make a better world - nor does it achieve the key aims those control freaks like Gary Gensler seek. There are key messages which need to be pushed back for being overly prescriptive and beyond the remit of the agency. The problem is those over zealous policies of Chairman GG can be used to push back on the areas where he needs (and has sought) to coherently enforce, particularly in the ethically dubious, criminally rampant arena of crypto and ill-titled ‘digital assets.’

Career news this week, quite a shock turner on that Eurex, the new CEO of Eurex Frankfurt, succeeding the retiring Michael Peters will be Robbert Booij, a Dutchman, no less at the heart of the German futures market. That's interesting as it comes, of course, in the same year as DB1 ought to be naming a new group CEO as well.

Over the S&P Global, they've appointed Christopher Craig as Interim Chief Financial Officer (CFO) and there's been a reshuffle within the LME clearing house that follows a reshuffling of the board just recently.

LME Clear’s new operations chief is Chris Jones, who was previously LME Group's chief risk officer, while Matt Wade steps up from head of clearing risk to become chief risk officer. His replacement as head of clearing risk is Paul Kirkwood, formerly the head of market risk with the firm.

One of the reasons why people subscribe to Exchange Invest is of course because they want to be ahead of the news and our incisive analysis. One thing we could tell you absolutely clearly when the government of Poland changed a few months back was that the CEO of the Warsaw Stock Exchange and the board would be replaced - hey presto, slightly faster than expected that came only days after the big oil energy monopoly Orlen so their CEO replaced.

The Warsaw Stock Exchange has a new CEO Tomasz Bardzilowski, who was previously MD at Polish finance house Ipopema Securities, he's replacing Marek Dietl, who has managed to survive a remarkable 7 years or almost 7 years in situ since 2017 on the bard of the Warsaw Stock Exchange.

The most interesting and most welcome appointment on the new board slate is Iwona Sroka, who requires no introduction to the parish having served as KDPW CEO (the fully state owned CSD) from 2009-2017. And indeed formerly used to be Director of Marketing Communication & Advisor to the Management Board to the GPW itself from 2000-2009 prior to moving to KDPW.

And then there was even bigger shock news of the week, finally in career paths, we had the LSEG’s chief operating officer leaving for an insurance broker.

A remarkable move LSEG COO David Shalders is leaving Paternoster Square for a new role in the insurance industry…some might infer it's almost as if even in the C-suite confidence in the Refinitiv hail Mary of LSEG and the ODD CEO’s abilities are low.

Last weekend, I flew from Bangkok to Miami returning from the AFM conference. Once again the AFM Conference was magnificent and we wish the retiring President Paul Constantinou a very happy retirement and congratulate Chris Sturgess on becoming the new President of the organization alongside Chairman Pat Kenny. Anyway, I have my own variation on the theme of Groundhog Day 25 hours of flight curving within the earth time zones.

When I arrived somewhat jet lagged, the US media headlines last weekend were dominated by excitement about Taylor Swift heading straight from a Tokyo conference to Las Vegas for the Super Bowl on, as I record this, coming Sunday. Frankly, I'm aghast. Simply seems there's no end to the Taylor Swift pool of talent even after breaking records with a 4^th best album Emmy this week. I appreciate La Swift is a tall woman but I hadn't even realized she could play football, let alone make her pro debut at the American football finals. There was me not appreciating when she's saying “I could build a castle out of all the bricks they threw at me”. Taytay must have been referring to the hard graft of gridiron training.

What an amazing woman. Presumably, the next step is Barbie playing the World Series, pitching in heels.

…And on that mysterious and magnificent note, thank you for listening to this Exchange Invest Weekly Podcast #231.

Join us daily via ExchangeInvest.com for the bulletin of the bourse business, the watercooler of the exchange industry itself, or if you have a new exchange or marketplace you'd like built, get in touch.

My name is Patrick L Young and I wish you all a great week in life and markets.

LINKS:

FTX Plans To Fully Repay Customers But Not Restart Exchange, Says Bankruptcy Lawyer
CoinTelegraph

Crypto Derivatives Exchange OPNX To Shut Down In February
(The Block)

26th Association Of Futures Markets (AFM) Annual Conference
Pattaya Mail

TFEX Hosts AFM Annual Conference During February 1-2
ASEAN Exchanges

JSE Initiative Will Help South Africans Get Their R4.5bn In Unclaimed Dividends
News24

Bigger IPOs Earmarked For Second Half, Says ASX
AFR

Moscow Exchange Hoping For Over 20 IPOs This Year As Retail Investors Rule
Yahoo Finance

Bursa Malaysia’s Target Of 42 IPOs For 2024 Is ‘Realistic’, 24 Already In Pipeline
The Edge Malaysia

Swiss Bourse CEO Eyes Sizeable Acquisition In Next Three Years
Bloomberg

Non-Renounceable Issue - NSX Limited
Listcorp