13 min read

245 Exchange Invest Weekly Podcast May 18th, 2024

This week in the parish of bourses and market structure: CFTC All Politics No Markets, Yield Curve Connect Improves, Oz Parl collates Feedback On The ASX “CHESS Mess” LSEG Reckons Its IPO Pipeline Is Growing, As the US country club duopoly look unstoppable for IPO flow.


This week in the parish of bourses and market structure:

CFTC All Politics No Markets, 

Yield Curve Connect Improves, 

Oz Parl. collates Feedback On The ASX “CHESS Mess”

LSEG Reckons Its IPO Pipeline Is Growing, 

As the US country club duopoly looks unstoppable for IPO flow.

My name is Patrick L Young 

Welcome to the Bourse Business Weekly Digest

It's The Exchange Invest Weekly Podcast Episode 245 

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

Welcome incidentally ladies and gentlemen to Exchange Invest 11th year. Are you gaining a daily seat at the watercooler of the bourse business, the exchange of information? If not, you should be thinking about subscribing right now. This podcast is only the barest of testers of what we have in pith every single day of the working week from Monday through Friday, 52 weeks a year. That is the exchange of information itself, Exchange Invest, which has surpassed its 2968 edition this week with readers from all over the world. 

The parish readership continues to grow but likewise we're always keen to add more. Pop over to ExchangeInvest.com today. Celebrate our 11th anniversary and get yourself a subscription to Exchange Invest at ExchangeInvest.com only 375 US dollars per user year. 

Meanwhile, in Bitcarnage SBF finds himself still in pure play guilt denial and is busy giving himself some sustenance by trading rice in jail. 

You may recall we discussed the fiscal outlook for SBF’s dealings during his sentence in our free Exchange Invest Weekend Edition 2898, which looked at mackerel, stamp books, and more being discussed as the currency of prisons even if tobacco has been reduced in importance, thanks to smoke-free jails in the United States of America, leading to the great ramen noodle swap post US prison tobacco ban in 2015…

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

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

Bitcarnage | Exchange Invest Bitcarnage | Substack
“Bitcarnage” by fintech pioneer Patrick L Young, is a spinoff from the daily bourse business bulletin “Exchange Invest.” Subscribe to understand crypto market dynamics from a team which successfully predicted the decline of FTX etc…. Click to read Bitcarnage, by Exchange Invest Bitcarnage, a Substack publication. Launched a year ago.

This week in the big world of exchanges, China and Hong Kong of enhanced Swap Connect a scheme for the 1st birthday easing access to mainland interbank derivatives. 

No scheme could hope for a better first birthday present - a handy expansion of linkage with reduced complexity and serial potential benefits to all end users with significantly more steps being made towards the Yuan holy grail, the RMB yield curve in a full suite of Exchange Traded Derivatives, which will be a most exciting launch for the Hong Kong Exchanges Group. 

Good week all round for Hong Kong, hot on the heels of a terrific inaugural Tadawul - Hong Kong Exchanges cooperation and a mega conference in the SAR was another MOU being signed with the Qatar Stock Exchange while there's optimism that Big IPOs are on their way back to HKEX after a period relatively in the doldrums. 

Over in Europe, CBOE have launched a push to attract retail investors across the European continent. 

The lesser spotted continental European retail investor makes up what 14% of EU stock business and is broadly herbivore. The US Greater spotted retail investor is a significantly larger appetite carnivore and takes up to 40% of the significantly larger in its own right US share trading capacity. 

Good luck to CBOE. Here's hoping the Europeans can manage to find their risk Mojo. Although, I'm rather pessimistic in the current circumstances. 

The London Stock Exchange says their IPO is building up but at the same time in Britain pension folks are worried about more lax listing regulations were a panicked LSEG notes nothing has improved in listing rules in 40 years. The realpolitik is the investors risk off and the brokers too short term. The exchange has made a muddle of leading thought and thus London is becalmed. 

At the same time, we can compare that to the US which still has frankly onerous rules as a result of the toga party years during the 1990s when Bernie Ebbers and others partied as an American “Rome” burned but thanks to all the other advantages of the USA - sunny optimism, walls of money, or “risk on” attitude oh plus a wall of money that can be stacked at a meaningful width into orbit... 

The problem is the US pipeline just keeps going. Every day the chasm between the UK and the EU grows in capital markets but at the same time, an even greater chasm is growing while the US reigns supreme between itself and anything across the Atlantic. 

The City of London is now a bickerfest between a group of risk averse investors and a short-termist rather limited mindset group of brokers, with the most dismally oblivious to markets LSE management team perhaps in its history. Something has to give - the worry is with Argentina fighting to be a proper economy these days, the UK may be ideally placed to be the next Argentina, although it does faces tough competition to the east within multiple European Union nations. 

In results, very busy week results in the parish all the details were in Exchange Invest, the 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 edit highlights. 

Ducks for the week, the Tadawul stunned the market with net income up no less than 122%. 

Pretty decent numbers all around at the same time from the BSE (the Bombay Stock Exchange) they added their name to the 20% + club in Q1 alongside of course not just Tadawul but CBOE, ICE, NASDAQ, MCX of India and more. 

In deals, it was not such a busy week for deals per se but one interesting note the Japanese Stock Exchange Group or at least I should call it the Japanese Exchange Group, JPX, they are having a stock split to 2:1 to end up with 1 billion and change outstanding shares effective from October 1st. The exchanges are retaining headroom as well, with authorized shares also doubling up to over 4 billion shares. 

At the same time, there's some sad news emerged that turned out a report in the AFR told us that tragically a group of Australian super fund managers blinked and didn't go about buying the ASX just as the ASX’s credibility continues to plunge. The only optimism might be the funds group say putting in a bid for FEX global and competing with the ASX, that way Australia desperately needs a proper exchange leading the nation's capital markets as there is a painful void at the top with Chi-X/Cboe doing a great job pushing the shambolic incumbent, albeit from very, very difficult standpoint. 

If you're trying to understand what are the dynamics, it's very difficult standpoints for competing in markets with regulatory affairs you ought to consider a copy of my most recent book “Victory or Death?” Blockchain, Cryptocurrency, and the FinTech World. That's published by DV Books available in good book shops everywhere as well as being online distributed via Ingram worldwide. 

Victory or Death?: Blockchain, Cryptocurrency & the FinTech World: Young, Patrick L, Sprecher, Jeffrey: 9788362627059: Amazon.com: Books
Victory or Death?: Blockchain, Cryptocurrency & the FinTech World [Young, Patrick L, Sprecher, Jeffrey] on Amazon.com. *FREE* shipping on qualifying offers. Victory or Death?: Blockchain, Cryptocurrency & the FinTech World

While you're waiting for your copy of “Victory or Death?” to arrive, check out our live stream Tuesdays 5 o'clock London, midday New York time. It's the IPO video live show. You can catch the back episodes on Linkedin and Youtube via IPO-VID.

Now online, we've got Episode #143 with our guest Thapelo Tsheole, we were discussing Botswana Rising with the former CEO of the Botswana Stock Exchange. A man who in 8 years managed to take the amount of retail investors, total quantity it was a paucity of 23,000 originally, he took that up fivefold in excess of 100,000 investors from population 2.6 million people in just 8 years. It's an epic interview really, really well worth a listen. 

Coming up on Tuesday we're gonna have an interview which is going to be delving all the way into our famous Southeast Asian best trader, although he's looking at world markets, our guest is going to be Jason Sen for the well appropriately enough #144: A Seasoned Trader Speaks! wiith Jason Sen ccoming up on Tuesday at 5 o'clock London time, 6 o'clock Central European Time, midday Eastern Standard Time in the USA. 

Our “Finance Book of the Week” this week is “The Last Best Hope: A History of American Realism”. It's a brilliant exploration of American history and contemporary conservative politics providing a practical, realist foreign policy for a new age of American politics.

Lest you don't read him already, the author John Hulsman is that thing we love and geopolitical analysis - a winner, and not a windbag. His record is second to none in accurately assessing outcomes and that makes The Last Best Hope a must read as the NeoCon delusion dies and the failures of Democratic foreign policy are writ large from the fringes of the US border towards into the world. It's time for realism ladies and gentlemen, come what may in the next general election in America - read this book. If you'd like to get up to date with what's happening in our book recommendations, don't forget we have them first a week before this podcast in our Exchange Invest Weekend Edition. Catch that comes out every Saturday it's free publication altogether, you can sign up at ExchangeInvest.com

Technology news this week, the Australian parliamentary ‘CHESS mess’ committee have published some of their submissions. 

The CHESS fiasco festers along as does the simmering resentment of everybody who isn't a member of the ASX board management with all those who are members of the ASX board management. The comments that have been submitted so far are the usual range with some self-justification such as from Digital Asset the vendor paid a couple $100 million in order to ultimately end up being unable to deliver anything due to the bigger fest which the CHESS master game. And then it goes all the way to the coherent messaging of settlement professionals at Computer share, noting in their opinion what an amateur shambles, the ASX has become. That this letter is co-signed by Paul Conn, who was also of course our IPO-Vid guest on Episode #079 when we were discussing Around the World From Front Office To Back. Paul, after all cut his teeth in Australia after a career in London, enjoying the experience of working with sound structured professionals like Angus Richards and Rory Collins at ASX -to name a but two have a highly cohesive team which could upgrade a tech stock across all markets. Perhaps the most magnificent contribution, however, so far has been a cri de coeur incorporating a surgical excoriation of the ASX failure at management on board level for years on end, is submission number 12 from academics, Helen Bird and William Klein and is Ia must read in its own right. 

Regulation news this week. We had Chairman Gensler making some comments about data, most notably and I quote:

“Since antiquity, finance has been about the pricing and allocation of money and risks throughout the economy. There are those who have money and who want to invest it. Others need money to fund good ideas, buy a house or help get through life's inevitable challenges. There are those who have risks but don't want to bear it, and others willing to take on that risk.”

“Finance sits in the middle, like the neck of an hourglass whose grains of sand or money and risk finance depends on data.”

That was an address discussing the SEC data on the public good which came before the 11th annual conference on financial market regulation of the SEC in Washington DC the other week. Meanwhile, SEBI, a regulator in India, have banned an SME firm from capital markets for misusing IPO proceeds. 

“SEBI the order notes bans Varanium cloud from the securities markets due to misused IPO funds, questionable financial statements, and stock manipulation.”

Other than this, can we presume the firm's doing okay on corporate governance?

CFTC, they were the major disappointment of the week they issued a proposal on event contracts, which is basically a big fat nye, or a big fat nye, as it was one might actually manage to say from the Soviet standpoint of how this order looks. A proposal in the best possible sense of totalitarian dogma. It's a “Blanket ban on progress for risk management” which might have been a better description.

That led to a bit of a statement storm and certainly, there is no change from the stubborn ignorance of the kalshi ban and prediction markets last year from Chairman Rostin Behnam it's still enormously disappointing. We really cannot wait even if it's another term for Joe Brezhnev for this current commission to be replaced. It's been a very, very disappointing time with Behnam as chairman. 

At the same time, it just shows how bad the Chairman Behnam has been the Commissioner Pham manages to look incredibly erudite and intelligent by calling for the CFTC needing to get serious and offering a strategic plan for reform. 

Quite incredible, “the Pham fatale”, is actually saying with what isn't dissent is actually excoriation of the CFTC. She's calling for the GAO, that's the Government Audit Office to have a study and provide recommendations for improvement of the CFTC operations. Our prediction somebody is going to be walking the plank in the near future from this commission, if not most of the commissioners themselves. It's a very, very sad demise of the CFTC commission under Chairman Benham and it makes the TLD Biden administration look almost competent by comparison, which is quite an achievement. In happier news, let’s jump to career paths, there's been an appointment of a new Chairman of the Monetary Authority of Singapore Board of Directors.

All changed in Singapore this week PM Lee Hsien Loong has retired after 20 years as Prime Minister heralding a large upheaval in government as he hands over to DPM Lawrence Wong, who was therefore previously Chairman of the MAS Board of Directors. And in his stead Gan Kim Yong the new Minister for Trade and Industry will be appointed for the term 15th of May 2024 to 31st of May 2026. 

One big resignation this week, a large fanfare mark the arrival of Murray Roos five years ago at the London Stock Exchange, stony silence from LSEG greets his departure. I'm not really sure what to make of this apart from the narrative that the LSEG has certainly lost its way in markets. Dan Maguire will apparently now serve both head of post-trade and capital markets for the exchange group, further expanding his brief which began with LCH and expanded to Group Chief Strategy Officer at the start of this year.

In BigWorld, there was a headline recently in the Financial Times has been backed up by other similar articles, championing the rebirth of Europe and the Eurozone Germany propelled Eurozone growth to now 0.3% propels, I think they actually mean Germany “pancakes” or Germany “piffles” Eurozone growth to 0.3%. There's a paucity of evidence for propulsion in the European Union's economic order, but right now more is the pity. However, the notion that 0.3% can propel anything apart from poverty as a construct only the Brussels bugles could deploy while defending their well of course subscriber base, and indeed also outside of Brussels, the ongoing German economic mean reversion. 

The really big “Other Story” during the course of this week has been another triumph in Buenos Aires, President Milei is clearly managing to blaze a trail even without a parliamentary monopoly interest rates have come down to 40% from 50% in the sixth cuts since President Milei came to power in December at which point rates had stood at 133%. Inflation incidentally peaked, it was 25.5% when he arrived in office and is now down to 8.8% albeit this being Argentina. Alas that's 8.8% per month. However, nonetheless even lacking a majority in parliament, this nation is making vast progress can free trade open markets and generally endorsing capitalism still have a role to play in the world of government? Nobody seems to have told President Milei, this view is painfully out of fashion in many Western capitals. After 5 months, Milei has done more for Argentina's economic outlook than any President has managed in Buenos Aires for generations. The outlook could yet be in the pink coming from the Casa Rosada. 

And on that mysterious and magnificent note, ladies and gentlemen, thank you for listening to this Exchange Invest Podcast # 245. Join us daily via ExchangeInvest.com for the exchange of information, the watercooler 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.


China, Hong Kong Enhance Swap Connect Scheme In Time For Its 1st Birthday, Easing Access To Mainland Interbank Derivatives
South China Morning Post

Hong Kong Signs Agreement With Qatar To Enhance Connectivity Between Financial Hubs In Latest Middle East Outreach
South China Morning Post

Exchange Operator Cboe Launches Push To Attract Retail Investors In Europe

London Stock Exchange Says IPO Pipeline Is 'Building Up'

Saudi Tadawul Group Holding Q1 2024 Earnings
Simply Wall St.

BSE Limited Reports Earnings Results For The Q4 Ended March 31, 2024

Japan Exchange Group: Notice Regarding Stock Split As Well As Related Items Such As Amendment To Articles Of Incorporation And Revision To Dividend Forecast

Cabal Of Industry Super Funds, Led By Investors, Weighed ASX Takeover

Australian Parliament ‘CHESS Mess’ Committee Submissions

"Adam Smith, The SEC, Data, And The Public Good" Prepared Remarks Before The 11th Annual Conference On Financial Market Regulation, SEC Chair Gary Gensler, Washington D.C., May 9, 2024

SEBI Bans SME Firm From Capital Market For Misusing IPO Proceeds
The Hindu BusinessLine

CFTC Issues Proposal On Event Contracts

Statement Of CFTC Chairman Rostin Behnam Regarding Proposed Event Contracts Rulemaking

Appointment Of New Chairman To Monetary Authority Of Singapore Board Of Directors

London Stock Exchange Capital Markets Head Quits
Financial News London

Germany Propels Eurozone Growth To 0.3%
Financial Times