12 min read

248 Exchange Invest Weekly Podcast June 8th, 2024

This week in the parish of bourses and market structure: T+1 Is A Thing In The World's Biggest Market, FESE Published Their Checklist Manifesto, Euronext Completes GRSS Takeover, As New York Is The Epicenter of Bourse Country Cool.

Transcript:

This week in the parish of bourses and market structure:

T+1 Is A Thing In The World's Biggest Market, 

FESE Published Their Checklist Manifesto, 

Euronext Completes GRSS Takeover, 

As New York Is The Epicenter of Bourse Country Cool. 

My name is Patrick L Young 

Welcome to the Bourse Business Weekly Digest

It's The Exchange Of Information In Podcast Form, The Exchange Invest Weekly Podcast Episode 248 

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 parish news this week, we applauded the Hong Kong Exchanges Group (HKEX) as one of our three most dynamic bourse groups of the first Exchange Invest decade. The details are also on LinkedIn and other social media as well as the discussion of our previous nominee which we were mentioning last week, the Intercontinental Exchange Group.

Over in Europe, FESE launched their Check List in an effort to leverage their previous joint flywheel report of last month. It's all an attempt to get the EU / EC to broadly appreciate that Europe isn't working. Having been the economic equal of the United States of America in 2008, now thanks to the sclerotic nature of precautionary principle Europe, 15 year growth has been 9% EU, 86% US. Or to put it bluntly, the USA is now an economy 1/3 larger than the European Union 27. 

EU households have about $12 trillion in savings according to the report and clearly encouraging some risk would be a wonderful thing to regain a sense of growth mojo across the European Union. Again, the key here is the urgency of sorting out the system. We simply cannot afford another lost generation of growth as has been taken for granted by the declinist mentality of the EU's Commissions this century. 

Over in Bitcarnage, it's a case of “Burn After Reading” the Coen Brothers 2008 spy tale “Burn After Reading” occurred to me last week, and it remains a sublimely brilliant caper / farce of hubris, incomprehension and bove all, human quirks… At the epicenter of the tale is John Malkovich, painfully penning a sublimely stuffy tale of his spy escapades in the form of a memoir (or John Malkovich’s memorably would pronounce it “Me-mmm-OI-r” which rings in my age ears at all points in time, not that I can exactly manage Malkovich’s Oscar award winning actorial brilliance. 

Now it looks as if the crypto kiddies are getting in on the mem-oir act. I can only presume former FTX Executive Ryan Salame tale can be longer or at least better edited than CZ as Salame has the better part of 8 years to craft his mem-oir, as opposed to the scant 4 months for CZ. Not that I expect CZ is complaining about his shorter book writing time. If you enjoyed this excerpt you may be interested that you can read Bitcarnage every day via 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. This week in exchanges, the big news was of course T+1,  T+1,  and T+1. The move to faster settlements for US Securities has gone smoothly said Gary Gensler, the SEC chairman who must have been presumably rather relieved to be able to hear nines that trade fields were steady the T+1 move smoothed settlement, reduced billions in collateral and saw improved rates in settlement failure to the last days of T+2. A perfect trifecta and plaudits to Canada, Jamaica, Mexico, and indeed of course, the big kahuna of stock trading 60.5% of the world's market capitalization the USA. 

In Hong Kong, optimism is rising that the bounce is back in China and the SAR as global investors are looking at the economy improving once again, that's the message from the HKEX where EI indeed started this year in a lonely furrow saying we thought China was on the cusp of an upturn. Some laughed but we were right and that will start feeding through the Hong Kong Exchanges bottom line soon for the daily staple business as we await the more dynamic components of RMB yield curve et al coming onstream in the ETD form. 

By the way, the fact that we were right about China, it’s another good reason to remind you that if you work in the bourse business you need a subscription to the exchange of information Exchange Invest. Don't forget to sign up for the Exchange Invest website ExchangeInvest.com obviously enough.

One fabulous initiative that took place over the course of this week was from, of all places, the world broadly never discussed on this podcast and very very rarely seen within the pages of Exchange Invest, the Cambodian Stock Exchange, they've announced a 'Zero Commissions on All Stock Purchases' promotion. Also interesting to note that the CSX has brought in the ability to trade in Khmer riel (KHR) real, and settle in US dollars. The 'Zero Commissions on All Stock Purchases' promotion is running for a month. And I think it's a fabulous way to advertise the stock market and encourage investors. 

Meanwhile, one market which really needs to encourage investors is of course the London Stock Exchange. There's been a bit of a positive network effect for a large listings venues recently, because it's had a series of follow on deals, there may always be a rallentando of IPOs but at least if you have the content listed already, you can do deals there and there abouts and you therefore get more equity listed on exchange thanks to rightd and other issues. However, ultimately, if you don't get new listings, eventually your content book shrinks through natural M&A, it's a short through medium term “automatic stabiliser” effect that you can enjoy but in the long term, you need dynamic listings to be on the exchange and added to the exchange. And right now, London is an afterthought where New York is the main market. 

That said Gosh, London's been trying to talk itself up even though the boss of Auto Trader hit the nail on the head this week. Less liquidity in London is annoying, but London is a risk of market that kills must multiples, especially in technology and destroys enthusiasm for the idea of London listing unless you are of course a parochial person who believes the UK as the epicenter of your market opportunity. Scarily enough there are rather a few people around who are rooted to nation like the UK (or the EU or whatever) unwilling to exit their crumbling comfort zone in search of where the growth opportunity is. AKA the people PLY is willing to treat with the ultimate contempt in many ways those who don't realize that the opportunity is America and Asia. Then when we look at the US and its advantage, PLY often discusses the country club phenomenon. MarketWatch have picked up on that this week with an article headline: The NYSE And Nasdaq Have Become The Hottest Clubs In New York. Here's Why thus MarketWatch repeats a long standing PLY why observation, NASDAQ and NYSE are the hottest ‘clubs’ to be allowed inside in Manhattan. And they're there because of the magnificent listings duopoly that they offer, the country club. In other words, the world's most exclusive Country Club of capital with, as I have already mentioned today, 60.5% of the world's market capitalization. The London Stock Exchange is claiming its reforms are working. It's difficult not to actually laugh out loud that one frankly, just because they've had one IPO which seems to have made a bit of an impact. So let's move swiftly on ladies and gentlemen. And if nothing else, encourage you to add some feedback. No results this week of any note.

In new markets, we have one new venture that is coming to fruition, the Social Stock Exchange in Malaysia is expected to be launched by the year and according to the Securities Commission. 

In deals, it was not such a busy week in the parish but a couple of interesting snippets. 

First of all, EEX offered remedies to the European Union's antitrust concerns on their deal to take over NASDAQ’s power business at the same time then Reuters was able to follow that up with another exclusive saying EEX’s NASDAQ deal risks probe is remedy seen as insufficient according to sources in Brussels.

Post Mr Aas making an Einar of himself, NASDAQ agreed to deal with the dynamic EEX to sell their power business. So far the EU does not like a quasi monopoly / oligopoly at the antitrust level, which is odd because it seems that the European Commission other wrongheaded folks are mistakenly obsessed with the concept that an oligopoly is the only solution to making EU capital markets better.

Elsewhere in deals, Bombay Stock Exchange (BSE) they've acquired the entire entity stake of S&P Dow Jones Indices in Asia, and as well as plaudits to them plaudits to Euronext, Euronext rapidly completing a deal they first announced in early April as they complete the acquisition of Global Rate Set Systems

If you're trying to understand where rate setting systems and all manner of other interesting bits and pieces of the technological firm and capital markets slopped together, you ought to be considering my most recent book “Victory or Death?” Blockchain, Cryptocurrency, and the FinTech World, it'll give you an understanding of how technology is affecting life and markets. “Victory or Death?” is published by DV Books and distributed by 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 time, midday New York time - it's the IPO Video live show. Catch the back episodes on Linkedin and Youtube via “IPO-VID”. 

Now online we can absolutely fabulous discussion actually, which is Steve Zwick talking about Developments in Carbon Markets that's online at the usual places or LinkedIn and Facebook and of course YouTube. You can find that discussion search for “IPO-VID” in order to hear about Steve Zwick’s latest developments in carbon markets discussion.

No show coming this week because actually our production team are off because it's Philippine Independence Day but I can offer you something wonderful, “Finance Book of the Week” 

In fact, in this week's EI Weekend, we had a marvelous discussion all about Rory Sutherland, a rather legendary figure in the world of advertising, and his book once you get around to the idea that you really want to be thinking outside the box, I thoroughly recommend "Alchemy: The Surprising Power of Ideas That Don't Make Sense” It reveals why abandoned logic and casting aside rationality can be the best way to solve any problem. 

Our next book of the week will be unveiled on Saturday in the latest Exchange Invest Weekend Edition which is absolutely free to sign up to. Incidentally, you can just drop by ExchangeInvest.com and subscribe there. 

And don't forget if you want all the news on the bourse business sent daily to your inbox then subscribe to Exchange Invest via ExchangeInvest.com. It's only $375 per annum to join us at the Exchange of Information. 

Product news this week, interesting collaboration when we saw a fascinating panel as well at a conference west in the USA, where we had the President of NYSE Lynn Martin and the predecessor to the NYSE President or predecessor to Stacey Cunningham, who came in the middle, which was Tom Farley, the first ICE appointed President of the New York Stock Exchange. They're coming together because the New York Stock Exchange is collaborating with Coindesk Indices a company owned by Tom Farley's firm to launch financial products tracking spot Bitcoin indices. Very, very interesting, I'm looking forward to those cash settled in options in the near future. 

Meanwhile, rather well it's difficult, isn't it? I mean, Senator Rick Scott has sent a letter to the Chairman of the SEC Gary Gensler demanding action and investigation into CCP-tied publicly traded Zeekr

Now this is difficult. I get where Senator Scott is coming from, but at the same time with reasonable transparency, there is actually a fascinating conundrum. I mean, yes, these companies are linked to the Chinese government. These companies may even be military backed and that could be tricky but isn't it somewhat of a remarkable thing that where did these companies go to get their capital, they come to the capital of capital of New York, New York, New York, ladies and gentlemen, and that, well, if nothing else, opens up to my mind a form of “golden arches” theory of capital markets, it could at least promulgate the notion that interlinked capital markets are more likely to reduce the future of conflict, and therefore reducing that risk of future conflict has got to be a wonderful thing. See also a previous book of the week from Exchange Invest James Fox’s excellent Financial Cold War. 

One other very, very interesting little tie up, which I think is obviously fabulous on the product field. Tradeweb has become the first electronic platform to connect the repo and IRS markets. 

Technology news this week, MEMX, CME and NYSE all had minor glitches in the week when IOSCO came out with their final report into approaches that should be adopted for the development of market outages.

Elsewhere in technology news, NASDAQ is collaborating with Microsoft to reimagine the boardroom experience with AI.

The Bombay Stock Exchange CEO inaugurated a new HyderabadDatacenter.

Crowdfunding, one big news there which is a bit of a shame the crowdfunding site Mainvest based in Boston is going to be closing down. Quite a niche crowd funder per se. The real key concern here was the collapse of service provider to FinTech signups and that's is now biting hard across many startups, which is a truly sad situation for Mainvest.

Over in career news, delighted to see that the Kazakhstan Stock Exchange successfully held their AGM of shareholders and indeed they were having a fabulous weekend long future planning strategy session during the course of the last weekend to that appointed at the AGM, the Kazakhstan Stock Exchange Board and I hope that their strategy has got many, many wonderful years to run into the future.

In other career paths news, Euronext has hired the former ETF boss of Amundi Arnaud Llinas as the head of ETFs and indices at Euronext the pan Lowland if not exactly Pan-European stock exchange group. 

Finally in career paths news this week, perhaps the biggest job news of the week, Sławomir Panasiuk has been confirmed as Vice President of the GPW, the Warsaw Stock Exchange by the regulators.

Then we come to something which impacts us across Big World and more in many ways. Sebi they have formed a committee to review the ownership and economic structure of clearing corporations. 

This strikes me as a big worry, ladies and gentlemen, the nadir of such committees was of course the infamous Jalan report a decade or so ago, which was so anti-capitalist and anti-market that even the reactionary socialists of Sebi were horrified and essentially dropped the report. Hopefully, India won't shoot itself in the foot again with its review of clearing house ownership. 

And on that mysterious and magnificent note, thank you for listening to this Exchange Invest Weekly Podcast #248. 

Join us daily via ExchangeInvest.com or if you have a new exchange or market you'd like to built, get in touch. 

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

LINKS:

Move To Faster Settlements For US Securities Has Gone Smoothly, SEC Chair Says
Yahoo Finance Canada

Trade Fails Are Steady As Wall Street Adjusts To T+1 Settlement
Bloomberg

DTCC Comments On Industry’s T+1 Progress
DTCC

For One Month, Buy Stocks But Pay No Commission At Cambodia Securities Exchange
Khmer Times

London Stock Market Bucks IPO Drought With Rush Of Follow-On Deals
FT

Auto Trader CEO: London Stock Exchange's Problem Isn't Liquidity
Yahoo Finance

The NYSE And Nasdaq Have Become The Hottest Clubs In New York. Here's Why.
MarketWatch

'Our Reforms Are Working': Is The London Stock Exchange On The Cusp Of A Revival?
City A.M.

Social Exchange To Be Launched By Year-End, Says SC
Free Malaysia Today

EEX Offers Remedies To Address EU Concerns On Nasdaq Deal
Reuters

Exclusive: EEX's Nasdaq Deal Risks Probe As Remedies Seen As Insufficient, Sources Say
Reuters

BSE Acquires Entire Equity Stake Of S&P Dow Jones Indices In Asia Index
Business Standard

Euronext Completes The Acquisition Of Global Rate Set Systems
Yahoo Finance

The New York Stock Exchange Announces Collaboration With Coindesk Indices To Launch Financial Products Tracking Spot Bitcoin Prices
ICE

Sen. Rick Scott In Letter To SEC Chair: Action & Investigation Into CCP-Tied Publicly Traded Zeekr Needed Immediately
U.S. Senator Rick Scott - Senate

Tradeweb Becomes First Electronic Platform To Connect Repo And IRS Markets
Tradeweb

MEMX Issue Resolved After NYSE, Cboe Paused Routing To Exchange
BNN Bloomberg

Nasdaq Collaborates With Microsoft To Reimagine The Boardroom Experience Using Artificial Intelligence - New Artificial Intelligence Powered Capabilities Help Governance Teams And Corporate Secretaries Realize Time And Cost Savings
Yahoo

Bombay Stock Exchange MD & CEO Inaugurates The New CtrlS HyderabadDatacenter-3
APN News

'Crowdfunding' Site Mainvest To Shut Down In June
The Boston Globe

Kazakhstan Stock Exchange Hold The AGM Of Shareholders
FEAS

Euronext Hires Former Amundi ETFs Head Llinas
ETF Stream

SEBI Forms Committee To Review Ownership, Economic Structure Of Clearing Corporations
The Economic Times