Retail investors at risk in Brexit dual-listing tussle

Feb 20, 2019

First Read

Hits & Takes
JLN Staff

WILD London is having its first WILDlings event of 2019 on Wednesday, March 20, 2019. It is called “Top Tips for Managing People,” and it is targeted to women at the earlier stages of their career, but open to all. Registration is at 6pm and the speaker, Q&A and “drinks and nibbles” is from 6:30 – 8:00pm at the London Metal Exchange, 10 Finsbury Square, London, EC2A 1AJ.~SR

Charlie Munger had this to say last week: “People are trying to teach you to come in and trade actively in stocks. Well, I regard that as roughly equivalent to trying to induce a bunch of young people to start off on heroin.” And stocks aren’t even WMDs in the eyes of his boss, right?~SD

Intercontinental Exchange’s Chief Financial Officer Scott Hill will give a presentation at the Raymond James 40th Annual Institutional Investors Conference on Monday, March 4 at 10:25 a.m. EST.~SR

Did the ISE’s former CEO David Krell invest in a crypto surveillance startup?~JJL

Starting February 24, CME Group FX options strikes are changing to provide more granularity.~JJL

Time Magazine is reporting that girls with working moms get better jobs and higher pay, according to research. No word on if they are better traders if their mothers are also traders.~JJL

Evidently more Fearless Girl (statues) is a problem. State Street is suing the sculptor of the “Fearless Girl” statue for breaking an agreement and making replicas of the iconic statue now displayed outside the NYSE.~JJL

The Association of Futures Markets, led by Chairman Pat Kenny, will hold its international conference in Chicago on May 9 and 10.~JJL


CFTC’s Division of Market Oversight Announces Mel Gunewardena as Deputy Director of the Market Intelligence Branch and the Agency’s Chief Market Intelligence Officer
CFTC Press Release
The Commodity Futures Trading Commission’s (CFTC) Division of Market Oversight (DMO) announced today that Mel Gunewardena has been named Deputy Director of the Market Intelligence Branch (MIB) and CFTC’s Chief Market Intelligence Officer.


We need to talk about Bunds; A shortage of safe assets in the eurozone is creating market distortions
Kate Allen – FT
We need to talk about Bunds and the risk they pose to eurozone markets. No, I’m not joking. Germany’s insistence on running a balanced budget and a current account surplus leaves no room for an expansion of its government debt — thus limiting the supply of German bonds, or Bunds, which are the eurozone’s safe asset.


It’s Getting More Expensive to Get High
Lee J Miller and Wei Lu – Bloomberg
‘Basket of vice’ made up of four generic groups of drugs; Costs tallied for opioids, cocaine, cannabis and amphetamines
Almost everyone, from President Donald Trump on down, agrees that Americans are getting gouged when they buy the kinds of drugs you can find at CVS or Walgreens.


What are the key challenges facing Financial Services organisations today and how can they survive and thrive?
In this blog series, John Yonker, CEO of Simplitium, gives his take. In this first article, John looks at how data has become a core asset for firms and why operating models must optimise around it.


Tuesday’s Top Three
Our top read story on Tuesday was MIT’s Technology Review, Once hailed as unhackable, blockchains are now getting hacked. Second was Bloomberg’s Investors Ask Who’s Safe in Russia After Michael Calvey’s Arrest. Third was The Washington Post’s Farmworkers could be replaced by robots sooner than we think


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Lead Stories

Retail investors at risk in Brexit dual-listing tussle; Brussels does not plan to recognise London venues if UK leaves EU abruptly next month
Philip Stafford and Chris Flood – FT
Brussels’ plan to restrict trading in shares listed both in London and elsewhere in the EU in the event of a hard Brexit will deliver a blow to retail investors, asset management groups have warned.

HKEX to acquire exchange technology business; HKEX will take a majority stake in Ronghui Tongjin, an exchange technology specialist based in Shenzhen.
Hayley McDowell – The Trade
Hong Kong Exchanges & Clearing (HKEX) has confirmed it will acquire a 51% equity stake in Shenzhen-based exchange and regulation technology firm, Ronghui Tongjin Technology.

The derivatives market is heating up in crypto, and Binance might be the next firm to jump in
Frank Chaparro – The Block
Cryptocurrency trading is stuck in the doldrums but one corner of the market is heating up, according to numerous market specialists.
Derivatives. It’s a word that has finally found its way from the world of pedantic Wall Street parlance to the center of the crypto trading world. Derivatives markets cover an array of financial products including options, futures, swaps, contracts for differences — all of which provide exposure to the market in a way that doesn’t touch underlying crypto.

CryptoCompare Publishes January 2019 Exchange Review
CryptoCompare today published its January 2019 Exchange Review, offering institutional and retail investors insights into the cryptocurrency exchange industry.
The January Monthly Review provides an overview of the current exchange landscape as well as a monthly evaluation of how spot volumes vs futures volumes have developed historically, including both crypto exchanges (BitMEX and BitflyerFX) and traditional exchanges (CBOE and CME). The review also focuses on how volumes have developed historically for the top trans-fee mining and decentralised exchanges.

Hedge-Fund Giant Citadel Hires Manager Away From Her Own Fund
Rachael Levy – WSJ
Citadel LLC, one of the world’s largest hedge-fund firms, has hired one of the industry’s few female founders.
Samantha Greenberg is closing her hedge fund, Margate Capital, to join Citadel. Ms. Greenberg specializes in investing in the technology, internet and media and consumer sectors. She previously was a partner at Paulson & Co.

Cost pressures could see 20% of buy-side outsource trading desks by 2020; Research from Opimas predicts greater focus on outsourced trading as asset managers struggle with rising operational costs.
Hayley McDowell – The Trade
Front office outsourcing is expected to surge over the next couple of years, as asset managers struggle to keep on top of regulatory and cost pressures according to new research.

US regulators propose expanding ‘test the waters’ IPO reform
Nicole Bullock – FT
US regulators want to expand provisions that allow companies to privately suss out investors’ interest in the sale of public securities in the latest bid to boost the US listings market.

Focus should be on active stewardship to restore trust in business; Forget maximum profits, we must rethink our approach to sustainable value
Keith Skeoch – FT
Cases of corporate failure and shortcomings litter the histories of stock markets around the world. The names Carillion, Lehman Brothers and Enron are as notable for the nature of their demise as they were for construction, banking or energy.

How to ‘Marie Kondo’ your investment portfolio; Principle of decluttering can also be applied to your wealth
Moira O’Neill – FT
Marie Kondo has become a global cultural phenomenon thanks to her simple principles on keeping a tidy house. Her Netflix show Tidying Up With Marie Kondo has prompted a mass decluttering of sock drawers and wardrobes around the world, with British charity shops reporting a boom in donations since the series began in January.

Cyber security firms show how to bring the rule of law online; Alliance against PC malware should be a model for addressing other consumer harms
Sarah Bloom Raskin – FT
The internet is broken and needs fixing. The search for solutions so far has focused on breaking up Big Tech, massive government intervention or relying on the big companies, like Facebook and Google, to regulate themselves and rescue consumers.

Swedbank May Have Handled More Than $4.3 Billion in Dirty Money
Niklas Magnusson, Hanna Hoikkala, and Frances Schwartzkopff – Bloomberg
Swedish media allege the bank is tied to the Danske scandal; Bill Browder says he has his own evidence backing the claim
The biggest bank operating in the Baltics, Swedbank AB of Sweden, has now been drawn into the region’s deepening money-laundering scandal, wiping off more than a tenth of its market value.

Palladium Smashes $1,500 as Shortages Ignite Record-Breaking Rally
Ranjeetha Pakiam – Bloomberg
Rules for stricter car emissions have tightened global market; Johnson Matthey expects the deficit to widen ‘dramatically’
Palladium surged above $1,500 an ounce to a record, extending a powerful rally that’s been driven by an acute shortage of supply as car manufacturers scramble to get hold of the material to meet stringent emissions controls. The advance will benefit top suppliers in Russia and South Africa.

Goldman Sachs Veterans Raise $3 Million to Fight Crypto Manipulation
Yogita Khatri – Coindesk
A U.S.-based crypto surveillance startup led by former Goldman Sachs fintech engineers has just raised $3 million in seed funding. Solidus Labs, provider of a machine learning and artificial intelligence-powered trade surveillance platform for digital assets, announced the news on Wednesday, saying that the funding was led by early-stage investment firm Hanaco Ventures. VC firm Global Founders Capital and Wall Street veterans David Krell and Norman Sorensen also participated.

The derivatives market is heating up in crypto, and Binance might be the next firm to jump in
Frank Chaparro – The Block Crypto
Cryptocurrency trading is stuck in the doldrums but one corner of the market is heating up, according to numerous market specialists.

Exchanges, OTC and Clearing

HKEX To Acquire Shenzhen-based Technology Business
Hong Kong Exchanges and Clearing Limited (HKEX) is pleased to announce that it has today (Wednesday) signed a letter of intent to acquire a majority stake in a Shenzhen-based specialist financial markets technology firm. The proposed acquisition will support HKEX’s strategy to further build its financial markets technological capabilities, at a time of rapid change in the global exchange landscape.

Big Three Exchange Families Sue the SEC to Protect Their Business Model
Themis Trading Blog
The SEC unanimously approved a pilot program in December called the Transaction Fee Pilot []. The purpose of this pilot is to test the effect on some of the distorted incentives in our markets on market quality, and includes a bucket of securities where rebates are banned. It’s a one year pilot with the option for the SEC to extend it to a second year. It includes three buckets or Test Groups, including a no-rebate bucket.

Intercontinental Exchange Chief Financial Officer Scott Hill to Present at the Raymond James 40th Annual Institutional Investors Conference on March 4, 2019
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, announced today that Scott Hill, ICE’s Chief Financial Officer, plans to present at the Raymond James 40th Annual Institutional Investors Conference. The presentation will take place on Monday, March 4 at 10:25 a.m. EST. The presentation will be available live and in replay via webcast and can be accessed in the Investors section of ICE’s website at

TMX Joins UN Sustainable Stock Exchanges Initiative
TMX Group today announced that Canada’s premier equities exchanges Toronto Stock Exchange and TSX Venture Exchange have joined the United Nations Sustainable Stock Exchanges (SSE) initiative to promote sustainability performance and transparency in capital markets.


Straits Financial Group Signs with Eventus Systems for Expanded Services, Bringing New Regulatory Compliance Capabilities to Singapore Headquarters; New Agreement Builds on Successful Implementation of Validus Platform for Straits Financial LLC in U.S., Furthers Growing Eventus Presence in APAC
Eventus Systems, Inc.
Eventus Systems, Inc., a leading global trade surveillance and market risk platform provider, announced today that Singapore-based Straits Financial Group Pte Ltd – which became a client in May 2018 for its U.S. subsidiary, Straits Financial LLC – has just expanded the relationship by signing on to the Validus trade surveillance and risk management platform for its Singapore headquarters. Straits Financial Group is the brokering division of the CWT Group, a leading global provider of integrated commodity services.

A Worthy Resolution: Addressing the Scourge of Business Managed Applications
Jan Dinger – Finextra
They go by many names—business-managed applications (BMAs), user-developed controls, among others. Their labels are as bespoke as the tasks they do. But it’s what they share in common that makes them stand out. They are inevitable. Annoying. Seemingly unavoidable. And, perhaps most of all: they are spreading.

BTIG Electronic Trading Releases Pivot Algorithm
Business Wire
BTIG announced today that its Electronic Trading unit TradeSave™ has released Pivot, a proprietary liquidity-seeking algorithm and the latest addition to the firm’s suite of advanced algorithmic strategies.

Nomura Asset Management shifts to Charles River cloud-based IMS; Nomura Asset Management has had a long-standing relationship with Charles River since 2008.
Hayley McDowell – The Trade
Tokyo-based Nomura Asset Management has gone live on cloud-based Charles River Investment Management Solution (IMS) for global and multi-asset trading.

Revolut’s Russian founder stirs up Lithuania’s fintech debate; Vilnius politicians worry about country’s push to challenge UK as financial innovation hub
Nicholas Megaw – FT
British digital bank Revolut has been caught in the middle of a deepening political debate in Lithuania over the country’s recent push to challenge the UK as Europe’s financial technology hub.


The SEC Is Now Reviewing 2 Bitcoin ETF Proposals
Nikhilesh De – Coindesk
For the first time since August, there are now multiple bitcoin exchange-traded fund (ETF) proposals sitting before the U.S. Securities and Exchange Commission (SEC).

The Ledger: JPM Coin Isn’t a Cryptocurrency, Mt. Gox Relaunch?, Bitcoin Breaks $4,000
Robert Hackett, Jeff John Roberts, Jen Wieczner – Fortune
Brock Pierce, a onetime Mighty Ducks child actor who helped found the cryptocurrency EOS (among other projects), has recently begun peddling an unexpected new venture. Called Gox Rising, it’s a plan to ostensibly resurrect Mt. Gox, the famed Tokyo-based Bitcoin exchange that collapsed in 2014 and has yet to reimburse creditors.

Elon Musk says Tesla won’t be getting involved with cryptocurrency
Kate Rooney – CNBC
Despite tweeting about bitcoin, Elon Musk says his electric car company is steering clear of cryptocurrencies. The world’s first and largest digital currency is “interesting,” and could be a valuable way to transfer money, Musk said in a podcast released Tuesday. But not for Tesla. “Bitcoin’s structure is brilliant but I don’t think it would be a good use of Tesla’s resources to get involved in crypto,” Musk told Cathie Wood of ARK Invest, which has holdings in the electric car company.

Crypto Startup Offers Insurance Against Quadriga Wallet Dilemma
Olga Kharif – Bloomberg
BitGo’s policy covers losses of up to $100 Million from hacks; Other custodians offer insurance on web-linked accounts
While users of the troubled Quadriga CX cryptocurrency exchange remain unable to retrieve millions in funds, a startup backed by mainstream companies such as Goldman Sachs says they’re able to offer some protection.

Crypto Startup TrueDigital Hires CEO from World’s Largest Hedge Fund
Anna Baydakova – Coindesk
A blockchain upstart is getting a new CEO from the world’s largest hedge fund. New York’s trueDigital, which was founded last March, has hired Thomas Kim away from Bridgewater Associates to be its chief executive. Notably, trueDigital is the firm that built a blockchain payments system for Signature Bank. While JPMorgan stole headlines last week for its “JPM Coin,” Signature said its similar Signet system is already processing millions of dollars a day.

A Tiny Gulf Nation Is Opening Its Doors to Crypto
Nour Al Ali – Bloomberg
Bahrain to regulate crypto trading platforms soon: Official; IPO operator SprinkleXchange to go live in Bahrain this month
Bahrain, once the Middle East’s hub for financial industries, is attempting to regain its footing by allowing companies using cryptocurrency to work in the country on a trial basis, as it considers how to regulate them.

University of Michigan Boosts Investment in Cryptonetwork Fund
Alexandra Stratton – Bloomberg
Andreessen Horowitz would get new capital for CNK Fund I; Public university’s endowment is valued at $12 billion
The University of Michigan’s $12 billion endowment plans to add money to a cryptonetwork technology fund managed by Andreessen Horowitz as more institutional investors begin to explore the market for cryptocurrencies.

You Can Now Test Binance’s Decentralized Crypto Exchange
Wolfie Zhao – Coindesk
Binance, the world’s largest cryptocurrency exchange by trading volume, has rolled out public testing for a decentralized trading platform built on its own blockchain network.

Once hailed as unhackable, blockchains are now getting hacked; More and more security holes are appearing in cryptocurrency and smart contract platforms, and some are fundamental to the way they were built.
Mike Orcutt – MIT Technology Review
Early last month, the security team at Coinbase noticed something strange going on in Ethereum Classic, one of the cryptocurrencies people can buy and sell using Coinbase’s popular exchange platform. Its blockchain, the history of all its transactions, was under attack.

Will Crypto Torch Jamie Dimon?
Michael J. Casey – Coindesk
Will the crypto community torch Jamie Dimon? Now, before I get “deep-stated” off social media, I need to clarify that I am most definitely speaking metaphorically here. Actual violence is never an option, kids. I am referring to twin occurrences in the world of blockchain technology that offer competing visions of how it will develop. The first was the widely reported news that that JPMorgan, whose CEO is the notoriously anti-bitcoin Dimon, will issue a JPM-branded digital currency, managed by its own permissioned distributed ledger, for use by its large-scale corporate and institutional clients operating within the bank’s $6 trillion daily wholesale payments operations.

German regulator intervenes to halt cryptocurrency offering: source
Emma Thomasson, Jan Harvey – Reuters
German financial markets regulator Bafin intervened for the first time in the cryptocurrency market by stopping a planned initial coin offering (ICO) late last year, a person familiar with the matter told Reuters. Bafin stopped an ICO worth 120 million euros ($135.89 million) planned by Munich-based automated algorithmic trading company RISE towards the end of 2018, the source said. RISE did not immediately respond to Reuters’ request for comment, made via the company’s website.

‘Our Cash Went to Something’: Customers Hunt for Bankrupt Crypto Exchange’s Missing Millions; Unusual cash-pickup system mysteriously closes
Paul Vigna and Shane Shifflett – WSJ
On a rainy January day, Jason Campbell drove for three hours from his home in Quebec City to a two-story office building in the Montreal suburb of Laval. He thought he would be picking up $1,000—in cash—he had stored at cryptocurrency exchange QuadrigaCX.

FBI Outline Key Features of Scam ICOs, Warns Investors to Be Vigilant
Marie Huillet – Cointelegraph
The United States Federal Bureau of Investigation (FBI) has outlined what it believes to be the consistent threads running through fraudulent initial coin offering (ICO) schemes. The Bureau’s perspective was shared in an interview with Netherlands-based financial news site the Paypers on Feb. 19.

Cryptos ‘Not a Substitute’ for the Precious Metal, Says World Gold Council
Yogita Khatri – Coindesk
Cryptocurrencies are “no substitute for gold,” according to the World Gold Council (WGC). The WGC, a market development organization for the gold industry, published the report late last month, arguing that gold is “very different” from cryptocurrencies. It’s less volatile, has a more liquid market and trades in a regulatory environment, among other factors, it said.


Thomas Says Supreme Court Should Reverse Landmark Libel Ruling
Greg Stohr – Bloomberg
Justice Clarence Thomas called for the U.S. Supreme Court to overturn the landmark 1964 New York Times v. Sullivan ruling, which protects news organizations from most libel suits when they write about public figures.

Politicians must stand up for the City of London after Brexit; One of the UK’s only competitive sectors is being thrown under a bus
Jo Johnson – FT
These are strange times. One of the UK’s only globally competitive sectors is being thrown under a bus.

Deutsche Bank Weighed Extending Trump Loans on Default Risk
Gavin Finch, Steven Arons, and Shahien Nasiripour – Bloomberg
Bank is said to have been concerned about default in office; Executives considered extending maturities to address risk
Top Deutsche Bank AG executives were so concerned after the 2016 U.S. election that the Trump Organization might default on about $340 million of loans while Donald Trump was in office that they discussed extending repayment dates until after the end of a potential second term in 2025, according to people with knowledge of the discussions.

Paul Tudor Jones Hits Palm Beach With Mick Mulvaney by His Side
Amanda L Gordon – Bloomberg
Agenda: Trump’s Everglades budget, cheers for Florida governor; Jon Bon Jovi sings; Dirk Ziff, Gary Cohn, Gabelli are guests
Paul Tudor Jones sat with Mick Mulvaney, the acting White House chief of staff, on Saturday night in Palm Beach. It might’ve been the closest the hedge fund manager has come to achieving alpha in his decades-long fight for the Everglades.

Federal ethics agency refuses to certify financial disclosure from Commerce Secretary Wilbur Ross
Jeff Daniels – CNBC
The government’s top ethics watchdog disclosed Tuesday that it had refused to certify a financial disclosure report from Commerce Secretary Wilbur Ross.

Intimidation, Pressure and Humiliation: Inside Trump’s Two-Year War on the Investigations Encircling Him; President Trump’s efforts have exposed him to accusations of obstruction of justice as Robert S. Mueller III, the special counsel, finishes his work.
Mark Mazzetti, Maggie Haberman, Nicholas Fandos and Michael S. Schmidt – NY Times
As federal prosecutors in Manhattan gathered evidence late last year about President Trump’s role in silencing women with hush payments during the 2016 campaign, Mr. Trump called Matthew G. Whitaker, his newly installed attorney general, with a question. He asked whether Geoffrey S. Berman, the United States attorney for the Southern District of New York and a Trump ally, could be put in charge of the widening investigation, according to several American officials with direct knowledge of the call.

Trump Has Publicly Attacked the Russia Investigation More Than 1,100 Times
Larry Buchanan, Karen Yourish – NY Times
President Trump has publicly criticized dozens of people and groups related to federal inquiries into contacts between his campaign and Russia, according to a New York Times analysis of nearly every public statement or Twitter post that he has made while in office.


Legal Guidelines for Smart Derivatives Contracts: The ISDA Master Agreement
ISDA has published the second in a series of legal guidelines for smart derivatives contracts, intended to explain the core principles of ISDA documentation and to raise awareness of important legal terms that should be maintained when a technology solution is applied to derivatives trading.

CFTC’s Division of Market Oversight Announces Mel Gunewardena as Deputy Director of the Market Intelligence Branch and the Agency’s Chief Market Intelligence Officer
The Commodity Futures Trading Commission’s (CFTC) Division of Market Oversight (DMO) announced today that Mel Gunewardena has been named Deputy Director of the Market Intelligence Branch (MIB) and CFTC’s Chief Market Intelligence Officer.

Commissioners Submit Comment on Prudential Regulators’ Proposed Rulemaking
Commissioners of the U.S. Commodity Futures Trading Commission (CFTC) submitted a comment on the notice of proposed rulemaking issued by the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation to implement a new approach for calculating the exposure amount of derivatives contracts under the agencies’ regulatory capital rules. Commissioners Brian Quintenz, Rostin Behnam, and Dan Berkovitz signed the comment, and were joined by Chairman J. Christopher Giancarlo.

SEC Proposes to Expand “Test-the-Waters” Modernization Reform to All Issuers
The Securities and Exchange Commission voted to propose an expansion of a popular modernization reform that would permit investor views about potential offerings to be taken into account at an earlier stage in the process than is the case today. The new rule and related amendments would expand the “test-the-waters” accommodation—currently available to emerging growth companies or “EGCs”—to all issuers, including investment company issuers.

ASIC concludes HSBC’s enforceable undertaking
ASIC has finalised its monitoring of HSBC Bank Australia Limited’s (HSBC) compliance with the court enforceable undertaking (EU) entered into by HSBC on 13 May 2016 (refer 16-145MR).

A Look at the FINRA Institute at Georgetown CRCP Program
The FINRA Institute at Georgetown Certified Regulatory and Compliance Professional (CRCP) Program is designed to give careers a shot in the arm, whether you are a compliance professional, investment advisor, regulator or just someone in the financial services space.

McKinsey Settles With Justice Department Over Bankruptcy Disclosures; Consulting firm agrees to pay $15 million to settle allegations of improper disclosures in three bankruptcy cases
Gretchen Morgenson and Tom Corrigan – WSJ
McKinsey & Co. agreed to pay $15 million to settle Justice Department allegations that the consulting firm failed to make required disclosures of potential conflicts in three bankruptcy cases it has advised on in recent years.

French court fines UBS 4.5 billion euros in tax fraud case
Inti Landauro, Emmanuel Jarry – Reuters
A French court on Wednesday found Swiss bank UBS AG guilty of illegally soliciting clients in France and laundering the proceeds of tax evasion, and ordered it to pay 4.5 billion euros ($5.10 billion) in penalties.

Investing and Trading

Hedge Fund Reaps Huge Returns But It Doesn’t Want Your Money
William Canny and Ruben Munsterman – Bloomberg
Plethora’s small size explains most of its success, owners say; Outperforms Gold BUGS index, others, over past six years
The key to getting monster-sized returns in mining equities is to be small, according to managers of the Plethora Precious Metals Fund.

Investors Sound Warning About Markets’ Complacency on Interest Rates; Financial markets have rallied since the Fed dropped a reference to future rate increases; ‘it seems frankly optimistic to expect nothing from the Fed in the next 12 months’
Akane Otani – WSJ
Stocks and bonds are rising on bets that the Federal Reserve has ended its nearly four-year campaign of interest-rate increases, worrying investors who believe the central bank could upend those expectations later this year.

Funds sold entire CBOT corn long undetected during U.S. government shutdown: Braun
Karen Braun – Reuters
Within the span of six weeks, commodity funds dumped bullish bets in Chicago-traded corn futures and options without the market’s knowledge.

How a 12-year Vanguard win streak makes it the ‘Amazon of wealth management’; 12 straight years: That is how consistently Vanguard has taken in more money than rivals
Chris Matthews – MarketWatch
Economist Burton Malkeil has called the index fund “the most important financial innovation that has been created for the individual investor.” And one look at index-fund pioneer Vanguard’s performance over the past decade shows that many individual investors agree.

For stocks, it’s corporate buying that really matters; Companies are the biggest buyers of equities through buybacks and acquisitions
John Plender – FT
We know that changes in the household sector balance sheet, particularly in relation to the balance between savings and consumption, matter greatly for the real economy. That said, what is unusual at present is that the exposure of US household balance sheets to the stock market is running at record levels. This is an under-acknowledged part of the explanation for the recent weakening of economic data and especially the spectacular decline in retail sales.


Credit Suisse quietly hired Morgan Stanley’s rising star in equity derivatives
Sarah Butcher – eFinancialCareers
Credit Suisse has hired a rising star from Morgan Stanley’s equity derivatives business.
Matteo Mazzetto, an executive director in Morgan Stanley’s fund linked derivatives business, is understood to be joining Credit Suisse in London this week. Credit Suisse declined to comment.

Barclays hoped 2008 cash call would drive international growth, court told
Kirstin Ridley – Reuters
Barclays believed deals with strategic investors during the 2008 financial crisis would help to provide a springboard for its international ambitions, the bank’s former chairman told a London criminal trial on Tuesday.

Billionaire Ken Griffin’s Citadel hires female hedge fund founder
Carleton English – NY Post
Billionaire Ken Griffin just snagged an ex-Paulson & Co. trader for his $28 billion hedge fund, The Post has learned.

Distressed debt hedge fund Aurelius vindicated in Windstream case
Sujeet Indap – FT
Vindication is a dish best served cold. Aurelius Capital Management won big in a highly-anticipated court case on Friday and on Monday took the opportunity to gloat.

Glencore vows to cap global coal production; Trading and mining group has faced investor pressure over polluting fossil fuel
Neil Hume, David Sheppard and Henry Sanderson – FT
Glencore has vowed to cap its coal production in the face of pressure from big investors who are pushing natural resource companies to take firmer action on climate change.

Ex-Barclays chairman thought complex fundraising ‘too clever by half’; Marcus Agius tells trial he does not recall being told Qatar fee details for June 2008 deal
Jane Croft – FT
The former chairman of Barclays feared that the bank would seem “too clever by half” by opting for a complex fundraising in early 2008 as the financial markets became increasingly “uncertain and febrile”, a high profile London fraud trial has heard.


France revels in sovereign bond ‘sweet spot’
Kate Allen – Financial Times
France has ventured into the 30-year bond market for the first time in two years, attracting strong demand from investors seeking solid yields while central banks around the world seem committed to keeping rates low.
A series of blockbuster bond sales since the start of the year has bucked forecasts that demand might suffer after the European Central Bank put an end to its bond-buying programme.

ETF options keep expanding as Franklin Templeton launches index funds while BMO offers ‘one-ticket solution’ products
Clare O’Hara – The Globe and Mail
Canadian investors’ stampede into exchange-traded funds has investment managers rolling out a host of lower-cost options to complement existing product lines.
Franklin Templeton Investments – a long-time active money manager in Canada – has decided to step into ETF index investing for the first time with four new passive funds, while Bank of Montreal has launched a set of asset allocation funds that automatically rebalance for investors.

This Thai Stock Is Forecast to Surge 49% Within a Year
Lee J Miller – Bloomberg
Indorama has 49% return potential based on analysts’ targets; Global acquisition spree seen boosting margins on chemicals
A 25 percent slump in the share price of Billionaire Aloke Lohia’s Indorama Ventures Pcl doesn’t have analysts worried. Instead, the stock is now rated the best equity buy among Thailand’s largest companies.

The Reasons Why China’s Stock Rally Is Nearing $1 Trillion
Bloomberg News
Signs of overheating already showing in four major benchmarks; Gains reflect a return in investors’ risk appetite: analyst
As suddenly as it rolled in, the crisis of confidence that shook Chinese stocks last year may be ending. The rally since January has added more than $893 billion to the value of the country’s equities, lifting Shenzhen’s risky startups and state-backed giants alike. The rebound has been so quick and widespread that it’s already triggered signs of overheating in four of China’s major benchmarks. The CSI 300 Index’s 15 percent rally is its best start to any year in a decade, and turnover across all exchanges is near the highest since March.

Tokyo’s drive to expel zombie stocks hits small caps
Hideyuki Sano, Tomo Uetake – Reuters
The Tokyo Stock Exchange’s push to weed out small and weak firms from its main board could take years, but some fund managers are already ditching small-caps for fear they could be excluded from benchmarks.


Lloyds signals ‘absolute confidence’ in UK despite Brexit warnings; Britain’s largest retail bank affirms optimism by announcing £1.75bn share buyback and dividend boost
Nicholas Megaw – FT
The chief executive of Britain’s largest retail bank said he had “absolute confidence” in the UK’s economic prospects, despite warnings from srivals about the likely impact of Brexit.

Three Tory MPs defect to fledgling Independent Group
Rowena Mason and Jessica Elgot – The Guardian
Three Conservative MPs – Anna Soubry, Sarah Wollaston and Heidi Allen – have quit the party to join the Independent Group founded by former Labour MPs.
In a devastating critique of Theresa May’s handling of the Brexit negotiations, the three MPs said the Tories had lurched to the right, adopting Ukip policies and pursuing a hard Brexit.

Lloyds Bank brushes off Brexit fears with $5 billion investor payout
Iain Withers, Lawrence White – Reuters
Lloyds Banking Group shrugged off mounting concerns over Brexit to unveil a 4 billion pound ($5.2 billion) dividend and share buyback bonanza for investors on Wednesday, despite weaker than expected growth in profits for 2018.

Hammond says no-deal Brexit would be ‘mutual calamity’
A no-deal Brexit would be a “mutual calamity” for Britain and the European Union that would deliver a sharp blow to the British economy, Finance Minister Philip Hammond said on Tuesday.


State Street sues ‘Fearless Girl’ sculptor
Greg Ryan – Boston Business Journal
The feel-good arrangement between State Street Corp. and the sculptor it commissioned to make the famous “Fearless Girl” statue has taken a bad turn. The Boston-based company (NYSE: STT) has filed a lawsuit against the sculptor, Delaware artist Kristen Visbal, claiming that she’s made and sold replicas of the statue in violation of her contract with State Street.

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Past Newsletters

Banks Face U.K. Grilling in Probe Over Big Gender Pay Gaps

Get a FREE 90 day trial of John Lothian Newsletter First ReadHow to Improve Gender Equality; Accepting the Challenge to Go 50:50John Lothian - Publisher - John Lothian NewsI have been challenged by a senior woman in the derivatives industry to...

Bacon is Back: CME Group Launches New, Fresh Bacon Index

Get a FREE 90 day trial of John Lothian Newsletter First Read Hits & Takes JLN Staff The CME Group saw the first non-record day for volume on the Micro E-mini equities complex with 627,499 contracts traded, compared to Friday's 671,526 record...

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