How China Turned 350 Million Millennials Into Day Traders

Apr 12, 2019

First Read

Hits & Takes
JLN Staff

The OCC re-elected Craig Donohue as executive chairman and elected member and public directors at their 2019 stockholder meeting.~JJL

The Trade Crypto is reporting that a vast majority of endowment funds are testing crypto investments.~JJL

Have you missed any of JLN’s Industry Leader Video Series? Check out what we’ve released so far here.~SD

Yesterday we shot an interview with Anthony Saliba for our Open Outcry Traders Industry Project. He has quite the story and stories.~JJL

We also interviewed Donnie Roberts, CEO of the Small Exchange, for our Open Outcry Traders History Project. He has great stories about the transition from open outcry to electronic trading and more.~JJL

Some oil news: BP, the last western firm left in the Chinese shale market, just exited its fracking projects in the country. Meanwhile, Shell sold a $965 million stake in a Gulf of Mexico oilfield to Delek, an Israeli oil firm. And then there’s this story from Reuters – Arrival of Putin’s judo partner squeezed Shell out of LNG project.~SD

The Barchart white paper mentioned yesterday is titled “How grain buyers and sellers can increase profits with basis indexes from cmdty.~JJL

Bloomberg published an excellent longform on Sudan’s agricultural issues on April 2 – One of Africa’s Most Fertile Lands Is Struggling to Feed Its Own People. In a nutshell, Sudan has the potential to be Africa’s breadbasket if not for the region’s long history of instability – a great deal of which was caused by President Omar al-Bashir. Then, on Thursday morning, a military coup removed the autocrat who had assumed power in 1989 (via a coup of his own). The future for the region remains cloudy as ever…~SD

Uber will list on the New York Stock Exchange under the symbol UBER. How user friendly.~JK

The CME Group has issued enhanced regulatory guidance regarding futures and options trading activity in the pre-opening period.~JJL

Eric Elliott, a blogger on Medium.com, has an interesting theory about how the crypto market works cyclically. Unlike some bloggers, he supports his arguments with historical data and labeled charts.~MR

A week after Elon Musk revealed his favorite cryptocoin on Twitter, that crytpo – good ol’ Dogecoin – has surged in price 68%. Makes you wonder if Musk was really joking or not.~MR

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US has regressed to developing nation status, MIT economist warns
Chloe Farand – The Independent
America is regressing to have the economic and political structure of a developing nation, an MIT economist has warned.
Peter Temin says the world’s’ largest economy has roads and bridges that look more like those in Thailand and Venezuela than those in parts of Europe.
In his new book, “The Vanishing Middle Class”, reviewed by the Institute for New Economic Thinking, Mr Temin says the fracture of US society is leading the middle class to disappear.
/ind.pn/2GjCVVC

*** It’s probably the millennials’ fault. We’ve been gleefully killing industries, like the napkin industry, for awhile now. We’ve moved on to killing the middle class.~MR

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Google Sued Over Abuse of Search Power, Opening Path for More Claims; The litigation could spark similar action by firms that have hesitated to take on the Silicon Valley giant
Bojan Pancevski – WSJ
A German price-comparison portal has become the first major company to sue Alphabet Inc.’s Google while invoking a 2017 European antitrust decision to fine the U.S. technology giant for abusing its dominant position in the search-engine market.
/on.wsj.com/2G84C2b

****I will Google “abuse of power” and see what this all about after I use a Kleenex to blow my nose.~JJL

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Thursday’s Top Three
Our top read story of the day on Thursday was Thom Thompson’s ongoing JLN coverage of US v Jitesh Thakkar: Waiting for the Denouement. Thom’s done a great job of following this trial from its start. Second was the JLN video interview from FIA Boca, http://bit.ly/2UslgDA|Building a Crypto Market in Traditional Futures Exchange Form – Thomas Chippas, ErisX. Third was The Economist pointing out how mistakes in data visualization misleads readers in Mistakes, we’ve drawn a few

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Since the beginning of 2019, Litecoin has increased in price by over 200%, according to price data from Coindesk and CoinMarketCap. This means that from a purely price-focused perspective, LTC has significantly outperformed bitcoin, Ether, Bitcoin Cash, XRP, and EOS in 2019.
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Lead Stories

How China Turned 350 Million Millennials Into Day Traders; By cracking down on peer-to-peer lending, regulators have narrowed the options for young investors. That’s birthing a generation of gamblers.
Shuli Ren – Bloomberg
A millennial problem is arriving in China. The nation’s 350 million young people are morphing into day traders. In recent years, China’s millennials have resorted to innovative financial products to accumulate wealth. Jack Ma’s Ant Financial Services Group, for instance, offers Yu’e Bao, a money-market fund, to anyone with a dollar to save. And those with a bigger appetite for risk can lend on peer-to-peer platforms. Everyone knows that depositing money into traditional savings accounts is a losing game – the paltry 1.5 percent isn’t even enough to cover inflation. And while banks’ wealth management products offer better yield, you need to be a VIP client to invest.
/bloom.bg/2G6GgWr

Hidden Bond Market Dangers Expose Traders to $2 Trillion Wipeout; Ultra-low bond yields and reduced liquidity could blindside investors and exacerbate losses once the market turns.
Liz McCormick and Katherine Greifeld – Bloomberg
Behind the rally in global debt markets lurks a disaster just waiting to happen. At least, that’s what some long-time market watchers are warning.
/bloom.bg/2Gd49eX

Digital Asset partners with ISDA to support adoption of CDM; New tool will assist developers in implementing ISDA common domain model in solutions for trading and managing derivatives.
Joe Parsons – The Trade
Distributed ledger technology (DLT) specialist Digital Asset is collaborating with ISDA, Wall Street’s derivatives trading body, to develop an open-source reference code to support adoption of the ISDA common domain model (CDM).
bit.ly/2Gd73An

The secret life of an armchair trader; It seems everybody wants to get into investing these days. But where exactly do you start?
Nick Johnstone – FT
I placed my first online share deal in June 2016 after eight years of cautious self-education and preparation, and a final lengthy bout of what I would call “shall I, shan’t I” throat-clearing. Almost three years later, I’m trading full-time.
/on.ft.com/2G7QJ40

A pioneering team
Kelly Loeffler – Bakkt Blog
Mike Blandina has joined as Chief Product Officer. As our CPO, Mike will lead our efforts to converge a trusted ecosystem for digital assets with payments use cases, two elements of Bakkt that help bring real world applications to bitcoin and other cryptocurrencies.
bit.ly/2KsIFQT

Why the former president of NYMEX is betting his wealth on building a crypto bank
Isabel Woodford – The Block
Life in Puerto Rico is no doubt a little different than in New York.
But for former NYMEX president James “Bo” Collins, swapping Wall Street for the bustle of San Juan is the adventure he’s been seeking for years.
“I knew I wanted to invest in crypto. I’d invested as early as 2011. And I made a bigger investment in January 2017. It was kinda the most amazing time, but it was just luck,” Collins tells The Block.
bit.ly/2Ktb2OY

How Big Business Is Hedging Against the Apocalypse; Investors are finally paying attention to climate change — though not in the way you might hope.
Jesse Barron – NY Times
Rex Tillerson stood under a 32-foot pipe organ at the Morton H. Meyerson Symphony Center in Dallas, explaining how the world worked. It was May 2015, in the middle of an oil-price crash, and Exxon Mobil’s earnings had fallen 46 percent compared with the same quarter the year before.
/nyti.ms/2GbHWhq

Rockefeller Foundation Wants to Manage Investors’ Money; Foundation aims to help get ambitious projects off the ground through its new asset-management platform
Kimberly Chin – WSJ
One of the richest and oldest foundations in the U.S. wants to start managing outside money. The Rockefeller Foundation has created a unit that will raise funds from investors and place it in companies or products it determines are benefiting society at large.
/on.wsj.com/2GcZeLh

Saving American capitalism from itself; The question the financial and tech elites must ask is ‘what price social peace?’
Edward Luce – FT
In 1832, the British aristocracy saved itself by agreeing to loosen its grip on power. Threatened with the spectre of being flooded by hundreds of instantly created peers, the House of Lords reluctantly voted for the first Reform act on the third time of being asked (by Earl Grey, the liberal prime minister). The bill widened Britain’s electorate and diluted the political stranglehold of its landed elites. This was a key reason why Britain escaped Europe’s wave of 1848 revolutions. Britain’s evolution was already peacefully under way.
/on.ft.com/2Ga1KBR

Tradeweb Completes IPO, MarketAxess No Longer Lonely…
Paul Rowady Alphacution Research Conservatory
The dominoes started falling years ago. It is only now – last week, on 4 April, to be precise – that we receive a new perspective on the data.
Here’s the setup: Quantitative methods and automated trade workflows started to shift the consumption of market data from eyeballs to servers way back in the 1990’s. As automation of front-office (i.e. – signal generation) and middle-office (i.e. – trade execution) increased, the shift of market data consumption from eyeballs to servers increased as well.
bit.ly/2Kt1GCL

Cannabis Futures Contracts May Be Headed to an Exchange Near You
Kristine Owram – Bloomberg
New Leaf Data Services wants to start contracts this year; Attracting enough volume will be a challenge, economist says
Pot will soon join corn, wheat and hogs on the agricultural futures markets — if New Leaf Data Services LLC has its way.
/bloom.bg/2GcI14J

What a Deutsche Bank Merger Could Mean for Germany; A deal with Commerzbank could be a solution, but it could also make things a lot messier.
Edward Robinson, Steve Arons – Bloomberg
Since it was founded in 1870, Deutsche Bank was supposed to be a steward for German industry, helping the nation’s manufacturers finance overseas trade. Broken up into 10 banks after World War II, it regrouped and prospered along with West Germany and, much later, a post-Berlin Wall, reunified nation. It’s long strived to be more than just another lender. And since the 1990s, it’s tried to go toe-to-toe with U.S.-based powerhouses such as Goldman Sachs Group Inc. in global investment banking, the business of trading and underwriting securities and providing financial advice to corporations. Germany – and Europe – had nothing to match the Americans on that scope.
/bloom.bg/2GcVXvt

Capital markets: From cottage industry to powerhouse
Peter Lee – Euromoney Magazine
When the newspapers of the day refused to publish prices from the new international bond market growing up at the end of the 1960s, Euromoney was founded to report on the business. The rise of international capital markets since has been astonishing, a driver of growth and development across the world but also a source of periodic crises. Euromoney has reported on market failures and resurgences, on great deals and disasters, and on pioneers and villains. Now, as markets still struggle to cope with the aftermath of 2008, we look forward with hope and anxiety to what might come next.
bit.ly/2KpWkrF

Murder and mafia hog headlines in a stock market hobbled by misconduct
Xie Yu – South China Morning Post
An increasing number of crimes linked to controlling shareholders of listed mainland Chinese companies highlight the unexpected risks linked with the world’s second-largest stock market, as it opens up further to foreign investors.”The controlling shareholder is the most powerful person in a listed company. To some extent, the value of a listed company is largely related to the value of this shareholder. Thus any accident happening to the person will directly affect share prices,” said Jason…
bit.ly/2G98AaK

Exchanges, OTC and Clearing

Developing capital markets can save emerging markets $13 billion: study
Rodrigo Campos – Reuters
Pursuing so-called ‘euroclearability’ can help some emerging market economies lower borrowing costs by over $13 billion over 10 years while increasing their investor base, a report showed on Thursday.
/reut.rs/2UcvVxs

Equity Liquidity Matrices Archive
TABB Forum
TABB reports metrics from 19 ATSs and 4 Single-Dealer Platforms (SDPs). The following 14 ATSs do not currently report metrics to TABB (estimated from largest to smallest volume): (1) Credit Suisse Crossfinder, (2) Morgan Stanley – MS Pool (ATS-4), (3) J.P. Morgan – JPM-X, (4) J.P. Morgan – JPB-X, (5) Merrill Lynch Instinct X, (6) Morgan Stanley – MS Trajectory Cross (ATS-1), (7) Interactive Brokers – IBKR, (8) Dealerweb, (9) Ustocktrade, (10) Luminex, (11) Morgan Stanley – MS Retail Pool (ATS-6), (12) Citigroup CIOI, (13) Pro Securities, and (14) AX Trading.
bit.ly/2KvpDJu

Gateway Real Estate AG new in the Prime Standard; Real estate developer since today at the Frankfurt Stock Exchange
Deutsche Boerse Group
The shares of Gateway Real Estate AG (ISIN: DE000A0JJTG7 ) are listed in the Prime Standard on the Frankfurt Stock Exchange today. In the listing, approximately 170 million common bearer shares were launched.
bit.ly/2Ga2vuQ

Fintech

Former top New York regulator joins New York’s FinTech Innovation Lab
Penny Crosman – American Banker
Maria Vullo, former superintendent of the New York State Department of Financial Services, has joined the FinTech Innovation Lab, a 12-week program in which dozens of New York bank executives coach a group of fintech startups, as an adviser. The Lab is run by the Partnership Fund for New York City and Accenture.
bit.ly/2GjTnFb

How Fintech Is Changing The Small Business Game
Martha Lagace – Forbes
Artificial intelligence, machine learning, and big data will transform financial services and small-business lending long before they impact driverless cars, predicts Harvard Business School Senior Fellow Karen G. Mills. “As we speak, large banks and fintech providers are working on solutions that will dramatically change the options for small businesses.”
bit.ly/2Gldd2Z

Former HSBC exec to chair Goldman Sachs-backed fintech
Financial News
The former head of wealth management for HSBC has been named chairman of an online mortgage broker backed by Goldman Sachs.
Simon Williams has been appointed as the first chair of fintech firm Trussle, set up in 2015 by chief executive Ishaan Mahli.
bit.ly/2GkXZLd

Cryptocurrencies

Bakkt hires former PayPal and Google exec as Chief Product Officer
The Block Crypto
Bakkt, a cryptocurrency platform run by Intercontinental Exchange, has added another member to its executive team. The firm announced Thursday that Mike Blandina has joined as its Chief Product Officer to lead Bakkt’s “efforts to converge a trusted ecosystem for digital assets with payments use cases, two elements of Bakkt that help bring real world applications to bitcoin and other cryptocurrencies.” Blandina was previously CTO of OneMarket, a retail technology startup. He also held senior engineering roles at PayPal and Google.
bit.ly/2Gf09uu

Crypto Exchange Bithumb Posts $180 Million Loss for 2018
Yogita Khatri – Coindesk
Bithumb, South Korea’s largest cryptocurrency exchange, has posted a net loss of 205.5 billion won ($180 million) for 2018. CoinDesk Korea reported the news on Thursday, saying that the loss was mainly due to a sharp decline in the cryptocurrency market last year, though the company’s operator BTCKorea also cited infrastructure investments and labor costs as factors.
bit.ly/2G9ERyB

Goldman Sach’s CEO David Solomon says “we never had plans to open a cryptocurrency trading desk.”
John Isige – FX Street
Goldman Sachs is studying the crypto market at the moment and has no plans for a crypto-focused trading desk. “We might at some point in time, but there’s no question, when you’re dealing with cryptocurrency, it’s a new area,” CEO David Solomon. The CEO of Goldman Sach has come out to deny claims that the bank is planning to start a crypto trading desk. The remarks were made during the United States House of Representatives Financial Services Committee on April 10. The particularly hearing was entitled “Holding Megabanks Accountable: A Review of Global Systemically Important Banks 10 years after the Financial Crisis.”
bit.ly/2UcqChw

Goldman Sachs CEO denies the firm ever intended to build out a crypto desk
The Block Crypto
News reports of Goldman Sachs opening a cryptocurrency desk are being disputed by the firm, CEO David ‘DJ” Solomon told a U.S. House of Representatives panel Wednesday.
bit.ly/2G8i32g

Trade Organization ICC Eyes Blockchain Adoption for Its 45 Million Members
Yogita Khatri – Coindesk
The world’s biggest business organization is making blockchain technology available to its 45 million members, including Amazon, Coca Cola, Fedex, McDonald’s and PayPal. Announced Thursday, the 100-year-old International Chamber of Commerce (ICC) has partnered with Singapore-based blockchain startup Perlin to improve supply chain processes at member firms, making them more traceable and transparent. The ICC will help members spread across 130 countries to connect to Perlin’s blockchain platform and benefit from the application of the nascent technology.
bit.ly/2IfhG9C

Bloomberg Reports Players in the Space Are Not Big Fans About Initial Exchange Offerings
Carl T – Bitcoin Exchange Guide
Initial Coin Offerings (ICOs) became popular back in 2017 when the crypto market was expanding and reaching new highs. However, a large number of them were just fraud or irregular schemes created to steal users’ funds. This is why there is now a new model to offer coins to the market called Initial Exchange Offering (IEO). However, several industry critics have provided their opinion on the matter.
bit.ly/2UgX9CN

Harvard Takes the Plunge Into Crypto With a Token Sale Investment
Michael McDonald and Alastair Marsh -Bloomberbg
University endowment backs digital currency firm Blockstack; School and other investors buy tokens valued at $11.5 million
Harvard University’s endowment is backing Blockstack Inc., a crypto-company that seeks to hold a $50 million digital-token offering.
/bloom.bg/2GcWzRN

World’s Second-Largest Grocer Joins IBM Food Trust Blockchain
Ian Allison – Coindesk
Albertsons Companies, the world’s second-largest supermarket company by sales, has joined IBM’s Food Trust blockchain, a digital system for tracking and tracing food between retailers and suppliers. Announced Thursday, Albertsons will begin with a pilot involving suppliers of romaine lettuce – a product which was last year linked to a widespread outbreak of E-coli resulting in recalls on a grand scale, 96 people being hospitalized and, tragically, five deaths.
bit.ly/2Z4G4Qi

Binance teams up with CipherTrace to up the exchange’s compliance procedures
The Block
The world’s largest cryptocurrency exchange Binance has teamed up with blockchain analytics company CipherTrace to enhance its security, CipherTrace has announced. It says it is helping Binance strengthen its anti-money laundering (AML) policies, ensuring compliance with cryptocurrency regulations and frameworks as they develop.
bit.ly/2Uzoo0w

***While Bittrex argues against the NYDFS’ claim that it has poor KYC/AML standards, Binance is beefing their KYC/AML standards up. This is a good example of why I like Binance as a company. ~MR

Politics

White House Seeks to Blunt Use of Informal Agency Actions; Financial industry has complained of regulators’ use of guidance over formal rule-making
Andrew Ackerman and Lalita Clozel – WSJ
The Trump administration has opened the door for Congress to more easily overturn financial rules issued as guidance rather than in a formal rule-making process, a win for an industry that has complained the practice can be unfair.
/on.wsj.com/2G6AZ1g

Trump’s Trade War Is Hurting Farmers, But They Still Think He Can Win It; Falling exports and shrinking incomes test support for the president’s aggressive protectionism.
Shawn Donnan, Shruti Singh – Bloomberg
Sean Gilbert surveys a two-year-old apple tree that’s head-high, a half-dozen branches growing off it at right angles. With the other trees planted at 3-foot intervals alongside, it’s part of what he hopes will be before long a lucrative wall of fruit.
/bloom.bg/2G7e7P7

Twitter Is a Big Deal in Politics. That Doesn’t Make It Right.
Lisa Lerer – The New York Times
It’s hard to overstate the role Twitter now plays in politics. It’s the president’s favorite form of communication. It’s where public officials make statements, where activists pressure politicians and where reporters announce their latest scoops. It’s where the “conventional wisdom” forms and where our national political narrative is created. And it’s totally unrepresentative of America.
/nyti.ms/2G6UB5d

Dispute over ‘political’ crimes looms over Assange extradition
Josh Gersteen – Politico
It’s an oft-heard refrain from high-profile criminal defendants: that the case against them is entirely “political.” That contention rarely carries the day in a court of law, but Julian Assange’s case may be the rare one where it finds some traction. Judges normally have little patience for such arguments, but legal experts say the WikiLeaks founder could have a better shot because of the extradition process needed to bring him to the U.S. for trial on the computer hacking indictment unsealed Thursday — just after he was dragged out of the Ecuadorian Embassy in London by British police.
/politi.co/2UVci12

The Politics of Troy and the Stalled Campaign of Kirsten Gillibrand
Ben McGrath – The New Yorker
Troy, New York, is a city of fifty thousand people with a strong, if self-deprecating, sense of pride. The Times once called it “a living textbook of the rise and fall of the Industrial Revolution in the Northeast.” Residents are fond of recalling when the old City Hall had a “for sale by owner” sign hanging in front, a grasping response to fiscal insolvency. A company called Enjoy Troy produces wooden bathroom signs that say “troylet,” an attempt to reclaim a decades-old pejorative nickname.
bit.ly/2GkJVS8

Conspiracy Theories Abounded in 19th-Century American Politics
Mark R. Cheathem – Smithsonian
From claims that NASA faked the moon landing to suspicions about the U.S. government’s complicity in the assassination of John F. Kennedy, Americans love conspiracy theories. Conspiratorial rhetoric in presidential campaigns and its distracting impact on the body politic have been a fixture in American elections from the beginning, but conspiracies flourished in the 1820s and 1830s, when modern-day American political parties developed, and the expansion of white male suffrage increased the nation’s voting base. These new parties, which included the Democrats, the National Republicans, the Anti-Masons, and the Whigs, frequently used conspiracy accusations as a political tool to capture new voters—ultimately bringing about a recession and a collapse of public trust in the democratic process.
bit.ly/2Z9mLoQ

Regulation

CFTC Chairman Gives Remarks at FSB Meeting on LIBOR Reform
CFTC
Commodity Futures Trading Commission (CFTC) Chairman J. Christopher Giancarlo joined Randal K. Quarles, Chair of the Financial Stability Board (FSB) and Vice Chairman of Supervision, Board of Governors of the Federal Reserve System, UK Financial Conduct Authority CEO Andrew Bailey, and Deputy Governor Bank of England Sir David Ramsden for an FSB Roundtable discussion to highlight the need for continued progress to reform major interest rate benchmarks.
bit.ly/2G8EunL

Opening Statement of CFTC Chairman J. Christopher Giancarlo before the Agriculture Advisory Committee Meeting, Overland Park, Kansas
CFTC
Good morning. Thank you all for joining us today. I am pleased to welcome our new Agricultural Advisory Committee (AAC) members.
bit.ly/2Gd82R5

Remarks of CFTC Chairman J. Christopher Giancarlo at the 2019 Agricultural Commodity Futures Conference, Overland Park, Kansas
CFTC
Good morning, everyone. Welcome to the Second Agricultural Commodity Futures Conference. It is good to have you with us.
bit.ly/2G7Ic13

SEC Charges Former Woodbridge Directors of Investment With Fraud
SEC
The Securities and Exchange Commission today charged two former directors of investments at Woodbridge Group of Companies LLC for their roles in its massive Ponzi scheme. The defendants, California-based Ivan Acevedo and Dane R. Roseman, were separately arrested and charged by criminal authorities, along with Woodbridge owner Robert H. Shapiro.
bit.ly/2G7HTTX

Proposed Rule Change Relating to Rules Addressing the Regulation NMS Plan to Address Extraordinary Market Volatility
FINRA
Financial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to make permanent FINRA Rules 6190 (Compliance with Regulation NMS Plan to Address Extraordinary Market Volatility) and 6121.01 (Resumption of Trading in Securities Subject to the Regulation NMS Plan to Address Extraordinary Market Volatility) in light of the permanent approval of the Regulation NMS Plan to Address Extraordinary Market Volatility (“Plan” or “LULD Plan”).
bit.ly/2G6JpWf

Proposed Rule Change Relating to FINRA Rule 5110 (Corporate Financing Rule – Underwriting Terms and Arrangements) to Make Substantive, Organizational and Terminology Changes
FINRA
Financial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to amend FINRA Rule 5110 (Corporate Financing Rule – Underwriting Terms and Arrangements) (the “Rule”) to make substantive, organizational and terminology changes to the Rule.
bit.ly/2G7SrCs

ESMA update on no-deal Brexit preparations
ESMA
ESMA statements and measures on no-deal Brexit scenario preparations referring to 12 April 2019 should now be read as referring to 31 October 2019.
bit.ly/2G7G2hX

Abraaj Founder Charged With Fraud in U.S.; Arif Naqvi accused of misappropriating more than $230 million in an SEC complaint
Simon Clark – WSJ
The founder of insolvent private-equity firm Abraaj Group was charged in the U.S. with defrauding investors by misappropriating more than $230 million from a health-care fund.
/on.wsj.com/2GeAAtQ

Investing and Trading

Andy Capp’s Fries Get 4/20 Buzz; A special version of the Conagra snack brand is coming April 20, a date significant to pot users
Aaron Back – WSJ
During the California gold rush, fortunes were made selling picks and shovels instead of actually mining for gold. During the current cannabis boom, as 10 U.S. states and Canada have legalized recreational marijuana, the equivalent may be selling snacks rather than pot.
/on.wsj.com/2G67qwK

Startup Moonfare Raises $28 Million to Help Rich Invest in Private Equity Funds
Sarah Syed – Bloomberg
Moonfare GmbH, the Berlin-based startup that allows wealthy clients to invest in private equity funds, has raised 25 million euros ($28 million) to fuel growth in Europe and Asia.
/bloom.bg/2G93jjs

The Case for Tighter Credit Spreads Is Compelling; Bond investors are demanding too much given the low risk of default. Also, Brexit’s the storm in the U.K. teacup.
John Authers – Bloomberg
Debt by default. Companies have been borrowing an awful lot, and leverage ratios are approaching record highs. For details, take a look at this graphical exploration that I produced last week with my Bloomberg News colleague Lauren Leatherby. But low interest rates make it easier to meet debt payments and refinance. Is it really possible that credit spreads, despite everything, should be even tighter?
/bloom.bg/2GbJl7A

Chevron Buys Anadarko in $33 Billion Bet on Shale Oil, LNG
Kimberly Yuen – Bloomberg
U.S. giant pays a 39 percent premium of $65 for smaller rival; Chevron will pay for deal with a mixture of cash and shares
Chevron Corp. agreed to buy Anadarko Petroleum Corp. in a $33 billion bet on shale oil and liquefied natural gas.
/bloom.bg/2G7YOFV

New Zealand’s sovereign wealth fund divests from gunmakers; Move comes in wake of mass shootings in which 50 people were killed
Jennifer Thompson – FT
New Zealand’s sovereign wealth fund has divested from gunmakers, after the country banned semi-automatic weapons in the wake of the mass shootings which killed fifty people.
/on.ft.com/2G6aaKy

Rich Women Increasingly Calling the Shots, Wealth Heads Say
Lananh Nguyen – Bloomberg
Merrill, Morgan Stanley highlight importance of female clients; Financial advisers push for greater gender, ethnic diversity
Rich women mean big business for some of the world’s largest wealth managers.
/bloom.bg/2G7Kygp

Muni-Bond Buyers Want Tax Breaks. Saving the Earth? Not Much
Martin Z Braun – Bloomberg
States don’t get lower borrowing costs from green bonds: study; Wall Street charges about 10 percent more on green bond deals
There appears to be a good reason why states and cities don’t go out of the way to market their bonds to environmentally conscious investors: it doesn’t save them any money.
/bloom.bg/2Ga7zPS

Every Reason to Hate the Surge in Stocks Is Now a Reason to Buy
Sarah Ponczek – Bloomberg
Equities are nearing record highs without some key industries; Low bar for earnings could encourage post-reporting share pops
As far as rallies go, this one has been notable for its speed and its strength, and not much else. If you’re looking for other things in stocks to shore up confidence, you probably won’t find them.
/bloom.bg/2G22XLm

Institutions

Deutsche Bank CEO and chair to stay in top roles after possible merger: Spiegel
Reuters
Deutsche Bank’s current Chief Executive Christian Sewing and Chairman Paul Achleitner would continue to lead the bank if it merges with Commerzbank, a German magazine reported on Friday.
/reut.rs/2GbNGYq

Northern Trust creates new global leadership roles for institutional business; Guy Gibson named as global head of institutional brokerage and Anna Ranaldi appointed as global chief operating officer for institutional brokerage business.
Joe Parsons – The Trade
Northern Trust has created two new global leadership roles for its institutional brokerage business, as it aims to drive business for its newly-launched outsourced trading service.
bit.ly/2G7M95Z

J.P. Morgan Results Beat Expectations on Strength in Consumer Unit; Nation’s largest bank reports 5% rise in profits driven by a 19% boost in the consumer division
David Benoit – WSJ
?JPMorgan Chase & Co. on Friday said its profit rose 5% and topped expectations on the strength of its consumer bank.
/on.wsj.com/2GezXAu

****FT here.

RBS steps on to the digital challengers’ turf; The head of Bó explains how the new online-only bank aims to meet changing customer needs
Nicholas Megaw – FT
Three years ago, Mark Bailie was trying to shrink what was once the world’s largest bank. Now, he is trying to build a new one from scratch.
/on.ft.com/2G1WakQ

How to say the ‘R-word’: bank executives grapple with recession talk
Elizabeth Dilts, Echo Wang – Reuters
Executives at the largest U.S. banks are grappling with how to best talk about the slowing economy and its impact on their businesses as they enter earnings season, people familiar with their thinking told Reuters.
/reut.rs/2UdRHRj

Bankers Jostling for New Deals May Weaken Bondholder Safeguards
Laura Benitez – Bloomberg
Weaker terms, higher leverage to emerge as competion heats up; Arrangers in Europe discount fees as they vie for mandates
Competition among bankers to win mandates in Europe’s leveraged finance market will get fiercer this year, raising the prospects of more deals with excess leverage and weaker protections for investors creeping into the system.
/bloom.bg/2G7CwUN

HSBC Sexual Harassment Case Shows Banks’ Struggles in MeToo Era
Stefania Spezzati – Bloomberg
Former employee alleged she was harassed by senior executive; HSBC let accused executive speak about bank conduct amid probe
In the MeToo era, financial firms the world over are struggling to handle complaints of sexual harassment. A case in point: HSBC Holdings Plc.
/bloom.bg/2G7YXJt

HSBC directors take pension cut after investor pressure
Reuters
HSBC’s three executive director board members have agreed a reduction in their pension allowance from 30 to 10 percent of base salary, following increasing scrutiny from investors and other stakeholders on overall executive pay.
/reut.rs/2G7POkf

Deutsche Bank investor to file AGM motion to oust chairman
Tom Sims – Reuters
Deutsche Bank investor Riebeck-Brauerei plans to file a motion seeking a vote to oust the bank’s chairman Paul Achleitner at this year’s annual general meeting, a lawyer for the shareholder said on Thursday.
/reut.rs/2G9Esw5

Steve Cohen Declares a Winner in the Hedge Fund Poaching Game
Amanda L Gordon – Bloomberg
Lincoln Center event honors recruiter, patron Ilana Weinstein; Gala featuring opera and tree people raises $1.7 million
Tree people make good company at hedge fund parties, but maybe only for their looks.
/bloom.bg/2GbSkFQ

Barclays Hits Back at Activist’s ‘Misleading’ Criticisms
Stefania Spezzati – Bloomberg
Bank says Edward Bramson’s plan is unclear and based on errors; Sherborne vehicle has short-term investment horizon: statement
Barclays Plc escalated its opposition to radical changes sought by activist shareholder Edward Bramson, saying his plans to cut back the investment bank are unclear and flawed.
/bloom.bg/2G7cfGe

Regions

Danske Bank auditor EY reported to fraud squad over 2014 report
Reuters
Accountant EY’s audit of scandal-hit Danske Bank came under scrutiny on Friday as Danish authorities asked the state prosecutor for financial fraud to investigate the matter.
/reut.rs/2Gbv5M9

U.S. Natural-Gas Market Is Taking Cues From China; Export boom complicates pricing as a warm winter abroad threatens domestic producers’ bottom line
Ryan Dezember – WSJ
The rise of the U.S. as a major exporter of liquefied natural gas has helped balance the domestic market amid surging production. It has also connected the price of gas in Louisiana to the weather in China—a development that is adding pressure on already low U.S. prices.
/on.wsj.com/2G9A2oZ

High court freezes £1.34bn assets of Russian bobsleigh boss; Georgy Bedzhamov is sought in Moscow over one of country’s largest bank collapses
Max Seddon – FT
The High Court in London has granted a £1.34bn freezing order on the assets of a former Russian sports official whom authorities in Moscow are seeking over one of the country’s largest-ever bank collapses.
/on.ft.com/2G7QUMI

China local governments flood market with $179bn in bonds; Move is latest sign of Beijing’s efforts to stimulate growth
Don Weinland – FT
Local governments in China have flooded the market with Rmb1.2tn ($179bn) in bond issuance during the first three months of the year, in another sign of how Beijing hopes to kick-start economic growth with infrastructure spending.
/on.ft.com/2Gezzlw

Asian bond issuances in dollars, euros and yen hit record pace; Companies act on easier China approvals and US Fed move to stop raising interest rates
Hudson Lockett- FT
Asian bond issuances in dollars and other major currencies are at a record pace this year, as companies rush to make the most of dovish signals on interest rates from the US Federal Reserve and a greater willingness by Chinese regulators to approve the allotment of offshore debt.
/on.ft.com/2GbHgso

Australian wealth manager IOOF hit with class-action lawsuit
Reuters
Australia’s embattled second-largest wealth manager, IOOF Holdings Ltd, was sued on Friday by shareholders who alleged the company engaged in deceptive conduct and breached stock market disclosure obligations.
/reut.rs/2G6PAJV

Brexit

Investors flee UK stock funds on Brexit worries; Nearly $25bn has been withdrawn since 2016 vote on leaving the EU
Richard Henderson- FT
Unease over Brexit has sent investors fleeing from UK stock funds for a fourth consecutive week, bringing the total drained from such funds to nearly $25bn since the 2016 vote on leaving the EU.
/on.ft.com/2G80Fun

Eurosceptics vent fury at May over Brexit delay; PM faces campaign to oust her as Conservatives prepare for difficult elections
George Parker and Sebastian Payne – FT
Theresa May on Thursday braced for what is likely to be an escalating campaign to remove her as prime minister after incurring the wrath of Eurosceptic Conservative MPs over her “abject surrender” in Brussels.
/on.ft.com/2G68TDi

Brexit Exposes Painful Disconnect Between England and Britain; The split can be traced back to the Blair government’s election in 1997 on a commitment to parcel out powers.
Alan Crawford – Bloomberg
At first glance, there’s little to betray the village of Edington’s status as the lodestar of Brexit. Squeezed between the chalk hills of Salisbury Plain and Wiltshire’s clay downs to the north, Edington lacks a school, a shop, or an obvious center. It has a village pub, the Three Daggers, and an ornate priory church serving a population the 2011 census put at 734 souls.
/bloom.bg/2G8A9AZ

Brexit: Theresa May defends 31 October delay to MPs
BBC News
Theresa May has told MPs it remains her “priority” to deliver Brexit, defending the decision to delay the UK’s exit from the EU. The new deadline of 31 October means the UK is likely to have to hold European Parliament elections in May. The prime minister said that if the deal agreed with the EU was passed, the UK could leave the EU “as soon as possible”. Labour leader Jeremy Corbyn called the latest delay a “diplomatic failure”.
/bbc.in/2UdkMwb

Brexit: Conservatives and Labour continue talks
BBC
The government and Labour have resumed talks aimed at breaking the deadlock in Parliament over Brexit. Shadow chancellor John McDonnell said discussions with cabinet ministers David Lidington and Michael Gove had been “positive” and “constructive”. He added that a timetable was being worked out for more meetings over the next seven to 10 days. EU leaders have agreed to delay the UK’s departure date from 12 April to 31 October, to avoid a no-deal Brexit.
/bbc.in/2G24uB6

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