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233 Exchange Invest Weekly Podcast February 24th, 2024

This week in the parish of bourses and market structure: TCS Falls Over Again, Sound CME Results, And ASX In Shambles, While EU Fin Mins Blame The Exchanges For Their Woes…


This week in the parish of bourses and market structure:

TCS Falls Over Again 

Sound CME Results 

And ASX In Shambles

While EU Fin Mins Blame The Exchanges For Their Woes…

My name is Patrick L Young 

Welcome to the Bourse Business Weekly Digest Episode 233 

Good day, ladies and gentlemen, this is a very brief reduction of highlights amongst the key headlines from the world in market structure this past week. 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  

Over in Bitcarnage:

According to a series of headlines, and admittedly after some rather impressive results, Coinbase Is An Unstoppable Crypto Giant

Suddenly the talk is of Coinbase being the unassailable leader of the pack. That sounds good until you remember, so too were the now deceased Mt Gox and FTX while last year it was just impossible according to conventional wisdom to see criticism of Binance as anything but “4:FUD!” 

If you enjoyed this excerpt you may be interested to know you can read Bitcarnage every day in Exchange Invest. 

Alternatively, if you want to follow a Bitcarnage the daily update on happenings in the world of crypto digital assets, you can find it as a standalone on Substack

From Bitcarnage to the world of conventional exchanges and we lead with a story where the blithering nonsense of the European Union's acolytes often knows no bounds and is clearly bereft of self-reference, ‘plus ca change plus c'est la meme chose’ in this case, it was a story in Reuters.

Finance ministers say Stock Exchange mergers can deepen the EU capital market.

Frankly, the temerity of it all: Exchanges are being blamed for not being competitive in a free market.  

The crass imbecility of these finance ministers is not overly surprising, I would imagine, given the dismal state of politics the world over, but it is a pathetic example of why the European Union has no idea that it is the problem driving European declined through the ongoing Brussels-driven centralized sclerosis of enterprise in favour of corporate socialism. The US, meanwhile, has more large stock markets than the European Union and dwarfs, the EU on every level. That's not because DB1, Euronext et al are at fault, but because top-down corporate socialism with a precautionary principle just doesn't work. Why not stimulate markets by trimming the 5000 European Union banks down to a more manageable number? (For instance, the European Union has 5000 banks the US has 4300 while European Union GDP is barely 72% of the US). What about helping the capital markets go more at 80:20 in funding provision like the US as opposed to the 80% being done by the EU banking blob? 

Evidently, the Brussels blob cum EU27 governments collectively have no idea how to deliver prosperity to stressed citizens. This blamestorming is the order of the day because nobody knows what to do to help the EU27 recover from their lost decade and a half (and remember, of course, those statistics 2008-2023 US GDP +82%, European Union27 +6% ). 

Rafael Plata made a fabulous point the other week on IPO-Vid #132.

The European Union is sitting on 14.3 trillion euros in bank deposits. Why don't the FinMins have a proper plan to get that invested instead of lying quasi-fallow in the 5000 banks?    

Also the European Union, the Commission finally blinked but nobody wanted to admit it as a milquetoast CCP regime was introduced to ooze a little more Euro clearing towards the continent but without hugely upsetting the free market preferences of users who wish to clear in London in particular.

Karel Lannoo, CEO of the Centre for European Policy Studies, a deep thinker who supports the EU but is unafraid to criticize the blob, deserves huge accolades for being willing to speak out here (as he has long done). And I quote: “LCH (London Clearing House) is the tip of the iceberg….you can only have a clearing business if you  have the rest of the iceberg, ” describing the European Union's moves as engineered by the profoundly underwhelming Commissioner McGuiness as “face saving for their stupidity.” I'm delighted to be “outpithed’ by the excellent Karel Lannoo. 

Over in Hong Kong, quite remarkable, Morgan Stanley Stephen Roach or formerly of Morgan Stanley’s Stephen Roach has made remarks that Hong Kong is over, quite almost surprising as he is truly an August Asian commentator but I can't help but side with Laura Cha in this case, Roach is in her words “utterly wrong.” 

In results, it was a fringedly 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, we're only going to have time for a couple of edited highlights. 

First up CME, the CME made a leap in profits this quarter joining DB1, NASDAQ amongst the top 7 markets, providing excellent results, of course, another one being Intercontinental Exchange, the leaders of the pack in Young’s Pyramid at the moment. Alas, if only things were as good as that “down under.”

ASX reported their 2024 half year results and it caused us to ponder, in Exchange Invest:

“Did anything go right for ASX Friday? Presumably, somebody clicked the ‘end call’ button by that stage, it was already far too late. The aftermath of another unmitigated disaster when reality rudely intruded on the ASX management's  somewhat quixotic worldview of their own abilities and achievements yielded a share  price in freefall. A 4% loss was absorbed by all the time the audio was clear but feet were evidently in mouths. It's not the first time either but once again, tragically, the Australian market monopolist embarrasses the parish with a display of what might be  deemed outright amateurism” undeserving of position retention amongst the C suite. 

New markets this week, BGC announced that their results - which were overall very firm by the way - they're going to be launching FMX futures exchange in the summer of 2024. 

I'm really not sure why Howard Lutnick reckons this competitor succeeds where his previous initiatives - have so clearly failed to defeat the CME interest rate monopoly but he remains optimistic. 

Chittagong Commodity Exchange they're awaiting their maiden registration and regulation but they hope to go live by December. 

In deals this week, a couple of refundings. The TMX announced and closed a $1.1 billion private placement debenture offering. 

ASX went to the note market for the first time. A debut corporate bonds issued by ASX with 275 million Australian dollars in medium term notes being up for offer. 

If you don't understand just what's going on in the world of financial technology, exchanges, blockchain, cryptocurrency, and the FinTech world, then why don't you pick up a copy of my most recent book “Victory or Death?”, published by DV Books and available via Ingram world wide. 

While you're waiting for your copy of “Victory or Death?” to arrive check out our live stream Tuesdays at 5 o'clock London time, midday New York time - the IPO-Video Live Show. 

This week we have a spectacular discussion Unlocking Namibian Growth with our special guest, the boss of the Namibian Stock Exchange, Tiaan Bazuin

And next week, we're looking forward to IPO-Vid 135: The Holistic Exchange & Operational Resilience with our guest Hamish Adourian

Our “Finance Book of the Week” which by the way, you can get previewed if you go to ExchangeInvest.com and sign up for our free EI Weekend, that is our weekend macro magazine read. The “Book of the Week” this week is Fiasco: The Inside Story of a Wall Street Trader by Frank Partnoy. A fascinating if somewhat remarkable, read  about some of the incredible practices of Wall Street within the course of the last generation or so. 

Don't forget our next book of the week will be unveiled Saturday in the EI Weekend Edition and equally do not forget if you want all the news on the bourse business and daily your inbox subscribe to Exchange Invest via ExchangeInvest.com. It's only $375 per annum to join the Exchange of Information. 

In technology news, well it was error corner this week, the new TCS system fell over again at MCX while MOEX had a couple of hours downtime after a server error and Euronext miscalculated a few indices for a few hours.

In career paths, the biggest news of the week was the announcement of the replacements for two departing board members of Hong Kong Exchanges. Benjamin Hung is retiring and most significantly, Chairman Laura Cha is going to be standing down at the 2024 AGM in a couple of months time. Congratulations to new appointments, they are going Chan Kin Por and Mr. Yan King Shun as members of the Hong Kong Exchange Board. No news yet on who is going to be getting the hot seat of chairman. At the same time, of course, as the CEO position is changing on March 1st

And that leaves us to think back 20 years ladies and gentlemen, it's remarkable to consider that 20 years ago on May 1st 2004, the European Union was still quite the go-go thing. It appeared to have growing power and purposes, particularly so with its largest ever accession day, as 10 nations simultaneously joined the European Union on May 1st 2004: Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia were the new members with a heavy bias towards the central and eastern European region of then, very, very recently post-communist nations. 

Of course, it's worth also reflecting that in a somewhat ironic move, most EU nations excluded many of the Eastern European accession nations from free movement of labour at that time, other than the UK, then in the grip of Tony Blair's somewhat demonic regime. 

…And on that mysterious and magnificent note, thank you for listening to this Exchange Invest Weekly Podcast 233. Join us daily via ExchangeInvest.com, the watercooler of the bourse business or if you have a new exchange you’d like built, get in touch!

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


Finance Ministers Say Stock Exchange Mergers Could Deepen EU Capital Market

Finance Leader Defends Hong Kong Stock Market After US Economist Claims It Is 'Over'
Hong Kong Free Press

CME Group Inc. Reports Q4 And Full-Year 2023 Financial Results

ASX 2024 Half-Year Results

BGC To Launch FMX Futures Exchange In Summer Of 2024
Markets Media

Chittagong Commodity Exchange To Go Live By Dec
Daily Sun

TMX Group Prices $1.1 Billion Private Placement Debenture Offering

ASX Announces A $275 Million Medium Term Notes Issue
Fool AU

Government Appoints Directors To HKEX Board
Government Information Centre

Hong Kong Exchanges and Clearing Limited Announces Executive Appointment