Hits & Takes
Sidley partner David R. Sawyier passed away on June 10 after a battle with cancer. He founded the firm’s private investment funds practice in their Chicago office in the late 1980s, quickly expanded the practice to both coasts and later expanded it to Europe and Asia.~JJL
The Micro E-MIni S&P Futures at the CME Group on Friday traded 182,611 contracts and had an open interest of 36,309.~JJL
To any of our readers in London who don’t have plans for Wednesday night: head to JLN’s LinkedIn page for a chance to win a free pair of tickets to ALTSO’s Rocktoberfest London event. More than 18,000 kids from around the world have been helped by ALTSO’s prosthetic limbs and services – this is your chance to see what it’s all about while listening to industry professionals rock out.~SD
The largest-ever bitcoin theft via hacking attack – which happened in January 2018 against the Japanese exchange Coincheck – may not have been perpetrated by North Korean hackers as previously thought. The Japanese newspaper Asahi Shimbun reports that a virus with known links to Russian hackers was found on employee computers at Coincheck.~MR
Last week’s Futures For Kids fun run featured more than 200 runners, 17 sponsors and raised about $67,000 for the charity. Patrick Thornton-Smith, who pushed David Setters the full 5K, raised £4,718.87.~JJL
ICYMI: Crypto pioneers Digital Asset will present the latest in DLT smart contracts and discuss their ongoing blockchain projects with ASX and HKEX in an after-work forum hosted by FinTank. The event takes place in Chicago on June 27 at IIT on Adams. You can get tickets here. ~SR
Student loan debt-relief scams are on the rise in the U.S., CNBC reports. People have been getting phone calls from companies offering to help reduce their monthly payments or even get rid of their student debt completely. The scammers, posing as legitimate companies, gather your personal information and assure you you won’t need to make payments yourself – meanwhile, they’ve changed your billing address, and your loans, which may go unpaid for months, go into default. Oh – and they also demand fees of thousands of dollars for this “service.”~MR
In other student loan news, a Bloomberg Businessweek survey of more than 10,000 MBA graduates from the class of 2018 at 126 schools around the world found that nearly half the students at some of the top business schools are borrowing at least $100,000 to finance their MBAs.~SR
The Spread – Numbers On The Board
More options litigation, some poor “Game of Thrones” guesswork, Mexican oil hedging, and other topics await viewers in this episode of “The Spread.”
Watch the video and see the stories referenced here »
JPMorgan Says Importance of Bitcoin Futures Has Been Understated
Joanna Ossinger – Bloomberg
Market structure ‘has likely changed considerably’: strategist; Futures share of volumes is up sharply, Panigirtzoglou says
Bitcoin futures may be more important than many in the market appreciate, according to JPMorgan Chase & Co. Recent reports from cryptocurrency asset manager Bitwise and the Blockchain Transparency Institute indicate that only a small percentage of reported trading may be authentic. If only around 5% of reported May trading of $725 billion is genuine, it would imply that the actual volume of Bitcoin trading on cryptocurrency exchanges in the month was around $36 billion, JPMorgan strategists led by Nikolaos Panigirtzoglou wrote in a report Friday, working with data from Coinmarketcap.com.
***** Bitcoin futures change the world…for the longs.~JJL
Illinois farmers give up on planting after floods, throw party instead
Tom Polansek – Reuters
Dozens of corn farmers and those who sell them seed, chemicals and equipment gathered on Thursday at the restaurant in Deer Grove, Illinois, after heavy rains caused unprecedented delays in planting this year and contributed to record floods across the central United States.
**** I often ride my bike to work along the lakefront in Chicago and have noticed the lake has risen and is overflowing onto the bike paths.The water level is now at an average of 581 feet, a new record for the month of June, more than four feet higher than normal, according to the National Weather Service. ~JB
Wealthy Americans Say Financial Worries Hurt Their Mental Health
Lananh Nguyen – Bloomberg
Even relatively wealthy Americans are so worried about their finances that it’s affecting their mental and physical health.
That’s one of the findings in a Bank of America Corp. survey of more than 1,000 people in the U.S. who have enough investable money to qualify as “mass affluent.” Financial concerns affected the mental health of 59% of respondents, while 56% said their physical health has been hurt.
**** First world problems. ~JB
Outside Business Activities; Policies and Procedures
Gary DeWaal – Bridging the Week
The Financial Industry Regulatory Authority reminded members and their employees through a disciplinary action that natural person registrants must advise their employers in advance of all proposed outside business activities not within the ordinary scope of their employment – including when such businesses activities may involve cryptoassets. Likewise FINRA, through another disciplinary action, reminded all financial services registrants of the importance of having up-to-date policies and procedures that reflect actual firm practices and not pie-in-the-sky aspirations or generic instructions.
Friday’s Top Three
Our top story of the day was the top story for the third straight day: Simply Wall Street’s piece about Terry Duffy in How Much Did CME Group Inc.’s CEO Pocket Last Year?. Short answer is $13 million. Second was the FT’s London Metal Exchange calls time on drinking during work hours. Third was the FT’s When commodities get hooked on derivatives
155,862,740 pages viewed; 23,817 pages; 220,178 edits
10 EU Countries OK Financial Transaction Tax Revenue-Sharing Plan
Administrative costs would be reimbursed for smaller countries; Goal is to finalize FTT this year, launch tax in 2021
Ten European Union countries have agreed on a revenue-sharing plan for the bloc’s proposed financial transaction tax that would reimburse the administrative costs of countries that have small stock markets and few large companies.
Wall Street Learns Hard Lesson on Why Not to Say ‘Pig’ in China
Lananh Nguyen, Ye Xie, and Max Abelson – Bloomberg
UBS is struggling to quell an uproar over economist’s remarks; “When traders refer to swines, they use the word ‘hog'”
Wall Street is getting a costly language lesson. For financial professionals around the globe this week, rising trade tensions and fears of a slowdown were no match for an unlikely drama suddenly unfolding in China: UBS Group AG’s struggle to quell a public uproar over an economist’s quip about pork prices.
Hong Kong’s Clout as a Global Financial Center Clouded by Uncertainty; Extradition bill controversy has prompted more wealthy Chinese in Hong Kong to consider moving money to places like Singapore
Steven Russolillo and Mike Bird – WSJ
The controversial prospect of extraditions from Hong Kong to mainland China has thrown fresh doubt on the city’s status as a global financial hub.
Financial Transaction Tax May Help EU Fix Brexit Budget Shortfall
Large-company equity trades would be targeted; Carbon tax measures also on June 14 meeting agenda
Germany and France will push European Union finance ministers June 14 to rally around a financial transaction tax that could help fill a potential EU Brexit budget hole.
EU tries to revive plan for financial transaction tax
Francesco Guarascio – Reuters
European Union finance ministers have discussed on Friday a plan for a 0.2% tax on shares, which Germany sees close to be agreed, although further work remains to be done.
High-Speed Traders Back Exchanges in Fight With SEC Over Rebates Plan
Alexander Osipovich – WSJ
Three big high-speed trading firms asked a federal court to halt a Securities and Exchange Commission initiative that would limit the rebates that U.S. stock exchanges pay to attract investors’ orders.
Citadel Securities LLC, GTS Securities LLC and the U.S. arm of Amsterdam-based IMC BV said in a joint court filing late on Thursday that the SEC’s plan, called the Transaction Fee Pilot, was an “ill-conceived” program that would harm investors.
TP ICAP Enters the Crypto Business to Trade Bitcoin Derivatives
Alastair Marsh – Bloomberg
Opening volley to be cash-settled futures contracts on the CME; Venture to be based in London with desks planned in Asia, U.S.
Facing a slowdown in its core brokerage business, TP ICAP Plc has joined the handful of traditional finance firms opening the door to Bitcoin.
China Is Mad at UBS. Welcome to Emerging Markets; The reaction to comments by the bank’s economist may seem overblown. But clients in developing countries can come with a steep price.
Shuli Ren – Bloomberg
UBS Group AG has managed to alienate an important client that it’s hoping to milk for millions in fees.
Mario Draghi Saved the Euro. Will His Successor Be Equally Committed?; The exiting president of the E.C.B. famously vowed to do “whatever it takes” to preserve the eurozone currency. It is unclear whether whoever follows him can be counted on to do the same.
Jack Ewing – NY Times
Officially, the central bankers, economists and journalists converging on a golf resort outside Lisbon this week will be reflecting on the grand monetary experiment known as the euro, which turned 20 this year.
London-Shanghai stock link hailed as ‘groundbreaking’; Initiative will allow global investors to access shares in Chinese companies
Tom Hancock, James Kynge, Javier Espinoza and George Parker – FT
A long-delayed programme to link the London and Shanghai stock exchanges will officially launch on Monday, allowing global investors to access shares in Chinese companies and Chinese investors a chance to buy LSE-listed stock.
UBS loses China bond mandate as ‘pig’ row fallout grows; One of country’s largest SOEs shuts Swiss bank out of advising on big bond deal
Mercedes Ruehl in Hong Kong and Don Weinland – FT
One of China’s biggest state-owned companies has shut UBS out of advising on a large bond deal amid widening fallout from remarks about swine fever by one of the Swiss bank’s top economists.
Deutsche Bank to set up EUR50bn ‘bad bank’ as part of overhaul; Germany’s biggest bank will shrink or shut its US equity and trading businesses
Stephen Morris in London and Olaf Storbeck – FT
Deutsche Bank is preparing a deep overhaul of its trading operations including the creation of a so-called bad bank to hold tens of billions of euros of assets as chief executive Christian Sewing shifts Germany’s biggest lender away from investment banking.
Brokers Look to Quash New Jersey Conflict Rule After Federal Win
Robert Schmidt – Bloomberg
Industry says SEC ‘best interest’ rule should override states; Investor advocates want states to pass tougher regulations
With the ink barely dry on new federal rules governing broker conflicts, the industry is moving to quash stricter regulations that are now popping up at the state level.
Exchanges, OTC and Clearing
OSE to launch Alternative Data Service
As recent years have seen the diversification of data and the growth of alternative data, Osaka Exchange, Inc. performed proof of concept (the PoC), in cooperation with a range of parties concerned, regarding the feasibility of using new data and service that are expected to contribute to the development of securities markets.
Shanghai-London Stock Connect welcomes its first issuer: Huatai Securities ; Huatai Securities raises US$1.54 billion; first issuer to list GDRs in London on the Shanghai Segment of London Stock Exchange
London Stock Exchange
London Stock Exchange Group (LSEG) today welcomes Huatai Securities, the technology-enabled securities group in China, as the first issuer using Shanghai-London Stock Connect. Huatai Securities has been admitted to trading on the Shanghai Segment of the Main Market of London Stock Exchange.
ICE Data Indices Recognized as Third Country Benchmark Administrator by the UK’s Financial Conduct Authority
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced that ICE Data Indices, LLC has been recognized as a third country benchmark administrator under Article 32 of the European Union’s Benchmarks Regulation (BMR). Recognition was granted by the UK’s Financial Conduct Authority (FCA) on May 24, 2019.
NYSE’s Commitment to Biotech; Why we are creating a new on-ramp to the public markets
John Tuttle – via Medium
Biotechnology ranks as one of the most exciting sectors in the economy, with thousands of companies working to solve some of the most intractable problems ever faced. Killer diseases like cancer sit squarely in their sights. Their success offers hope to millions.
Removal of duplicated FAST addresses for derivatives market
Dear Moscow Exchange Derivatives market customers,
We remind you that due to production launch of FAST Full Orders Log without data batching, starting June 17th 2019the duplicate multicast group addresses for FAST with accelerated data distribution (3ms batching) are being decomissioned.
How London became a global tech hub; Entrepreneurs say capital has flourished despite lukewarm support from Downing Street
Tim Bradshaw and Daniel Thomas – FT
When Dan Hughes learnt about bitcoin in 2011, he was convinced he could improve its underlying technology. A former telecoms consultant from Stoke-on-Trent, he spent six years in the Midlands working alone on faster and more secure versions of a decentralised transaction network.
Goldman Gets Easy Win on Loan to Billionaire CrowdStrike CEO
Benjamin Stupples – Bloomberg
George Kurtz pledged part of his stake to borrow $10 million; Software-maker’s shares have doubled since Tuesday’s IPO
Giving George Kurtz millions of dollars will rank among Goldman Sachs Group Inc.’s safest deals.
Draghi Shines Spotlight on Risks to Europe’s Upstart Fintech Hub
Milda Seputyte – Bloomberg
It’s firmly on the map as a go-to European destination for financial-technology hopefuls. Now Lithuania must make sure the buzzing startup hub it’s nurtured doesn’t fall foul of the law.
The Baltic nation’s fintech transformation won plaudits this month from Mario Draghi. But his praise came with a warning: the boom carries risks as well as rewards.
Google and PayPal explored OCC’s fintech charter, then walked away
Rachel Witkowski – American Banker
Google, PayPal and dozens of other technology and fintech companies have visited with officials at the Office of the Comptroller of the Currency during the past year to explore whether to obtain the agency’s new special-purpose national bank charter, according to sources familiar with the matter.
But both Google and PayPal, as well as several others, have since backed off over fears that they could harm existing relationships with state regulators and concerns about whether the OCC will prevail in a legal challenge to its authority to create the fintech charter.
Bitcoin Turns Crypto Haven as Biggest Exchange Plans to Restrict U.S. Users
Vildana Hajric and Olivia Rinaldi – Bloomberg
Binance to develop a separate platform for the U.S. market; Facebook’s planned token launch adds to crypto uncertainty
Bitcoin is serving as a refuge for much of the rest of the cryptocurrency market. The largest digital asset gained as much as 2.4% to $8,463 Friday while just about all the so-called alt-coins such as Ether, Litecoin and EOS were in the red. The flight to safety follows an announcement by Malta-based Binance that it will no longer be able to provide services to U.S. traders starting in September. The world’s biggest crypto-trading platform updated its terms of service to say it is instead launching a separate exchange for Americans.
Bitcoin Climbs to One-Year High on Facebook Crypto Pact Report
Adam Haigh and Eric Lam – Bloomberg
Facebook to start digital currency this week: Wall St. Journal; Bitcoin has gained more than $5,000 since the start of 2019
Bitcoin climbed past $9,000, to its highest since May 2018, as reports that Facebook Inc. is due to unveil a digital currency added to optimism that cryptocurrencies are becoming more widely adopted by mainstream finance.
Dr. Evil Would Love Facebook’s “GlobalCoin”; More than 2 billion users spending one currency, controlled by one billionaire. What’s to worry about?
Lionel Laurent – Bloomberg
Sometimes even bitter billionaire rivals need each other. Mark Zuckerberg and the Winklevoss twins fell out over the founding of Facebook Inc. but they appear to have buried the hatchet over the blockchain.
Why Being a Crypto Fund Manager Is Even Harder Than You Think
Sebastian Sinclair – Coindesk
The challenges facing crypto fund managers in the current market climate show just how volatile and young the industry is as a whole.
Bitcoin Surpasses 1 Million Daily Active Addresses
John Biggs – Coindesk
Bitcoin just passed an interesting milestone today, one we haven’t seen since November 27, 2017. According to CoinMetrics.io, there are now over a million daily active addresses, a number that is defined as the number of unique “from” or “to” addresses used per day.
Bakkt Exchange Sets Date for Testing Bitcoin (BTC) Futures; On July 22, the Bakkt exchange will test user acceptance for their long-awaited Bitcoin futures.
Christine Masters – Cryptovest.com
After months of delays, the Bakkt exchange will start testing the acceptance of Bitcoin (BTC) futures with physical delivery on July 22. In a blog posting, Adam White, COO at Bakkt, shared that the ICE market operator called the exchange a “moonshot bet”.
SEC Seeking Digital Asset Experts for Visiting Scholars Program
The U.S. Securities and Exchange Commission (SEC) invites qualified professors or PhDs with expertise in the digital asset industry to express interest in opportunities available at its Washington, DC headquarters and 11 regional offices throughout the United States. At least one and possibly two visiting scholar opportunities will be available for a period of one year.
Iran to Breach Limits of Nuclear Pact, Putting Bid to Save Deal in Doubt;Tehran will go above the cap on its stockpile of enriched uranium set in 2015
Laurence Norman and Aresu Eqbali – WSJ
Iran said it would exceed limits on its stockpile of enriched uranium in 10 days, jeopardizing European efforts to save the international nuclear deal amid heightened military tensions in the Persian Gulf.
As Many as Two Million Protesters Hit Hong Kong Streets
Annie Lee, Fion Li, and Shawna Kwan – Bloomberg
Organizers say record 2 million march; police estimate 340,000; Leader Carrie Lam apologizes, but ignores resignation calls
Hong Kong rose up in defiance a day after leader Carrie Lam suspended a contentious extradition bill, jamming the streets with hundreds of thousands of people and drawing a formal apology from the embattled chief executive.
Trump Warns of Epic Stock Market Crash If He’s Not Re-Elected
Ros Krasny – Bloomberg
Ramps up fear factor as 2020 campaign set to officially start; Dow Jones’ performance under Trump so far has been middling
President Donald Trump, gearing up for the official start of his 2020 campaign, warned that the U.S. would face an epic stock market crash if he’s not re-elected.
Why This Time Was Different for Hong Kong; Support from business and the potential financial damage to China help explain how protesters prevailed in their battle against the extradition bill.
Nisha Gopalan and Matthew Brooker – Bloomberg
Hong Kong protesters have won a stunning victory. Saturday’s suspension of an extradition bill that would allow criminal suspects to be sent to mainland China followed a day of violent clashes on Wednesday that saw the police use tear gas, pepper spray and baton charges. In 2014, the police also used tear gas against demonstrators, prompting an occupation that paralyzed the central business district for more than two months. Yet the government refused to budge, and the protest was eventually cleared by force. It’s worth asking what was different this time.
The new macroeconomics of populism; The nationalist urge to keep the world off your back extends to foreign finance
David Lubin – FT
It is nearly 30 years since Rudiger Dornbusch and Sebastian Edwards published a seminal book, The Macroeconomics of Populism. Their conclusion back then was that the economic policies of populist leaders were quintessentially irresponsible. These governments, blinded by an aim to address perceived social injustices, specialised in profligacy, unbothered by budget constraints or whether they might run out of foreign exchange.
Hong Kong cannot respect freedoms while serving Beijing; Without democratic legitimacy, the city’s leaders will always struggle to push through unpopular laws
Joe Leahy – FT
During the protests against the Hong Kong’s extradition bill this week that brought parts of the city’s central business district to a standstill, the demonstrators chanted a single word: “withdraw”.
Hong Kong Suspends China Extradition Plan in Stunning Reversal
Shawna Kwan and Fion Li – Bloomberg
Chief Executive Carrie Lam says pause needed to restore order; Opponents still plan to march Sunday, seeking her resignation
Hong Kong’s leader suspended efforts to pass a bill allowing extraditions to China, in a dramatic reversal that she said was necessary to restore order in the Asian financial hub and avoid further violence and mass protests.
Trump Keeps Boasting That the Rest of the World Pays for His Priorities
Josh Wingrove – Bloomberg
Poland to pay for base for U.S. soldiers; Mexico for migrants; President sees U.S. as a ‘piggy bank’ that was exploited
Whether it’s an immigration deal with Mexico, a new base for U.S. soldiers in Poland or tariffs on Chinese imports, what’s important to Donald Trump is that some other country will pay the bill.
FCA calls on consumer to act now as PPI complaints deadline pressure builds
As new ads launch today, 90s icon Mr Motivator and personal finance expert Sarah Pennells join ‘Animatronic Arnie’ on FCA’s ‘Pressure’s on Panel’ to help galvanise consumer action; The FCA releases latest figures on PPI
With just over two months to go until the 29 August 2019 PPI complaints deadline, the FCA is urging all UK consumers to make a decision, before it’s too late, about whether to complain about PPI.
FCA and CSRC announce their support for the Shanghai-London Stock Connect scheme
The Financial Conduct Authority (FCA) and the China Securities Regulatory Commission (CSRC) have today made a joint announcement of their approval of the Shanghai and London Stock Exchanges’ proposed new Shanghai-London Stock Connect. They have also published a memorandum of understanding (MoU) aimed at providing the basis for the regulatory co-operation that will support the success of the scheme.
Industrial and Commercial Bank of China Affiliate to Pay More Than $42 Million for Improper Handling of ADRs
The Securities and Exchange Commission today announced that Industrial and Commercial Bank of China Financial Services LLC (ICBCFS), a wholly-owned subsidiary of Industrial and Commercial Bank of China Limited, will pay more than $42 million to settle charges for improper handling of “pre-released” American Depositary Receipts (ADRs). The settlement marks the largest recovery against a broker in the SEC’s ongoing investigation of ADR practices, which thus far has resulted in settlements with 10 financial institutions exceeding $414 million.
FINRA Updates the OTCBB/OTC Equities High Price Dissemination List
FINRA is publishing its quarterly OTCBB/OTC Equities High Price Dissemination List for the first quarter of 2019. This updated list of OTC equity securities eligible for trade report dissemination for trades of fewer than 100 shares is effective as of June 14, 2019. To view changes, visit the Daily List: Security Attribute Changes page, select the “Unit of Trades” filter and enter June 13, 2019 as the “Start” date and June 14, 2019 as the “End” date.
Banks accused of overcharging small customers for forex services; ECB paper finds hedging rates can be 25 times higher than those of bigger clients
Eva Szalay – FT
Banks across Europe earn hundreds of millions of euros a year from overcharging small corporate customers for foreign exchange services, according to a new paper from the European Central Bank.
Quicken Loans Settles Financial-Crisis-Era Suit With Justice Department; Lender fought government accusations that it misused FHA loan program
Ben Eisen – WSJ
Quicken Loans Inc. agreed to pay $32.5 million to resolve a yearslong lawsuit with the U.S. government, a court-appointed mediator said Friday.
Bank of England finds UK challenger banks cut corners; Regulator says new lenders are ‘overly optimistic’ in risk management
Caroline Binham and Nicholas Megaw – FT
The Bank of England has found widespread weaknesses among the UK’s challenger banks in stress tests that showed new lenders cutting corners in an aggressive pursuit of growth.
Financial transaction tax by 2021, says Germany’s Scholz
A tax on financial transactions in Europe should be implemented by 2021, German Finance Minister Olaf Scholz tweeted on Friday after a meeting of euro zone finance ministers, adding that the foundations for the tax would be laid this year.
ASIC issues guidance to licensees to protect against share sale fraud
ASIC has provided guidance for Australian financial service (AFS) licensees about how they can mitigate the risks to their clients and business of share sale fraud.
Investing and Trading
Bond markets are unconvinced how effective central bank tools are; One troubling aspect of declining yields is falling inflation expectations
Michael Mackenzie – FT
A flickering light never goes out for equity markets, especially one kindled by the hope of central bank easing.
Are markets somehow ‘broken’?; Subdued volatility, while economic data are worsening, fuels unease on Wall Street
Robin Wigglesworth J- FT
Are markets somehow “broken”? That may sound shrill, but some analysts and investors fret that there are some weird sounds coming out from under the hood of the financial system, clanks and whirrs that should worry us all.
Almost $12tn in bonds trading with sub-zero yield; Concerns about trade and Gulf tensions spur rush towards sovereign debt
Adam Samson – FT
Negative-yielding debt is back with a bang. The global tally of bonds trading with sub-zero yields has lurched towards the $12tn mark, doubling since a recent trough last autumn, Barclays data show.
Burned Bets on Fed ‘Patience’ Leads to Surge in Rates Volatility
Stephen Spratt – Bloomberg
Vol market is being squeezed as short covering drives gains; Lack of liquidity exacerbates volatility moves, traders say
Volatility in interest-rate options is spiking as traders scramble to cover short positions before this week’s Federal Reserve decision. The turnaround reflects the market switching to price in rate cuts from earlier expectations policy makers would stay on hold.
Wealthy Families Are Adding Forests to Their Portfolios; It’s a long-term bet on growth.
Lananh Nguyen – Bloomberg
Tom Crowder spent much of his two-year career in the NFL running away from men who weighed upwards of 300 pounds. These days? He worries about bears and snakes. As a senior vice president at Bank of America Corp., Crowder spends most days in the woods, from the evergreen forests of New England to the wetlands of the Carolinas, scouting U.S. timberland assets for people with a net worth of at least $100 million and a minimum of $10 million to invest.
Dueling Bond Markets Send Mixed Message on Risk; Investors flock back to funds that buy risky corporate debt, while Treasury yields hang near record lows
Yield on 10-year Treasury note
Matt Wirz – WSJ
U.S. bond markets sent mixed signals about risk this week as investors jumped back into funds that buy risky corporate debt, while Treasury bond yields hovered near record lows, reflecting concerns about slowing economic growth.
Record Number of Candidates Sit for CFA Exam This Weekend
Maria Jose Valero – Bloomberg
Chartered Financial Analyst test held in 95 markets worldwide; About 250,000 candidates signed up; 11% rise from last year
A new crop of chartered financial analysts is in the making this weekend. A record number of more than 250,000 candidates was registered to take the exam.
World’s top 500 companies set to miss Paris climate goals; FT analysis of Carbon Delta data shows only 15% of groups are in line with the accord
Leslie Hook – FT
It has been a big week for climate change — and the companies trying to tackle it.
Calpers’ Dilemma: Save the World or Make Money?; California’s public pension system wrestles with new doubts about divestments based on social concerns
Heather Gillers – WSJ
The California Public Employees’ Retirement System was one of the first public-pension systems to tie its investments to social activism. Now it is having second thoughts.
Goldman Sachs Wants to Look More Like Blackstone; New division likely to have about $140 billion in assets
Liz Hoffman – WSJ
Goldman Sachs Group Inc. is building a mini- Blackstone Group LP in a bid to boost a flagging stock price. The Wall Street firm is pulling together four separate units that invest in private companies, real estate and other hard-to-access deals, creating a new unit and planning a fundraising blitz, according to people familiar with the matter. Goldman is trying to grow the kind of steady, income-generating business that investors like.
There Is No Easy Fix for Legg Mason and Other Money Managers; Pushback from affiliates shows how hard it can be for firms to streamline their businesses
Justin Baer – WSJ
The plan to fix money manager Legg Mason Inc. LM -0.30% appears as obvious as ever—and no easier to pull off.
Warnings over liquidity of alternative mutual funds; Woodford crunch raises questions over suitability of hedge funds sold to retail investors
Siobhan Riding – FT
The liquidity crisis at Neil Woodford’s flagship fund has cast a shadow over the viability of a hugely popular type of product that seeks to replicate hedge fund strategies in an instant-access mutual fund format.
UBS must resist social media bullying over ‘Chinese pig’ comment;Companies often kowtow to criticism in China, but UBS should stand by its economist
Patrick Jenkins – FT
Four and a half years ago Ian Gordon, a banking analyst at Investec, was ticked off for writing a punchy research note about the regulatory pressures on Standard Chartered, and titling it “I can’t breathe”. Mr Gordon’s headline, as critics soon pointed out, drew a crass comparison between a bank’s relations with its regulators and the resonant dying words of Eric Garner, an unarmed black man who was killed in a police chokehold a few months earlier.
UBS Loses China Bond Deal After Economist’s Pig Remark
Cathy Chan – Bloomberg
Swiss bank was excluded from CRCC’s dollar debt sale; Donovan apologized for ‘Chinese pig’ remark, placed on leave
One of China’s biggest state-owned infrastructure companies excluded UBS Group AG from a bond deal after the bank’s global chief economist sparked a furor with his use of the phrase “Chinese pig.”
Questions mount over weak Link in Woodford affair; Link Fund Solutions oversees Neil Woodford’s funds and had similar role in two earlier fund closures
Owen Walker – FT
The company responsible for overseeing Neil Woodford’s flagship fund has found itself in the spotlight over the implosion of the stockpicker’s empire, having already played a role in the controversial collapse of two other investment funds.
ESG Even More Prevalent for Funds Under the Radar; It turns out that the adoption of ethical investing standards is a lot more widespread than we thought.
Mark Gilbert – Bloomberg
Including environmental, social and governance considerations in investment decisions is becoming of paramount importance for the fund management industry. Moreover, those principles may be coming into force in asset allocation even faster than previously thought.
French banks face pay nightmare as BofA keeps hiring in Paris
Sarah Butcher and Thierry Iochem – eFinancialCareers.com
Bank of America has made another hire for its expanding office in Paris. The U.S. bank recruited Valentin Malrieux from Goldman Sachs in London for its growing Paris-based equity derivatives sales team. Malrieux began his career at HSBC and Credit Agricole in Paris, but moved to London in 2015. Now he’s back in the French capital again.
Allianz Buys Stake in Hudson Yards Tower for $384 Million
Lily Katz – Bloomberg
Allianz SE is making another bet on New York City’s Hudson Yards, buying into a second skyscraper in the development.
Man GLG launches UK version of High Yield Opps fund; Available to wider range of investors
Emanuela Hawker – InvestmentWeek
The strategy originally launched in January via the Dublin-domiciled UCITS fund but has now been launched as a UK-domiciled fund to allow easier access for a wider range of investors.
Credit Suisse sues UK to claw back banker bonus tax payments; Zurich-based bank seeks £239m bank payroll levy it paid after the financial crisis
Javier Espinoza – FT
Credit Suisse is suing the UK tax authorities to recover millions of pounds it paid during the former Labour government’s drive to tax bankers’ bonuses, according to one person briefed on the bank’s actions.
The City of London Finally Tackles Its Drink Problem; Lloyd’s of London and the London Metal Exchange are bastions of sexism and boorishness. It’s great that they’ve banned alcohol, but it’s only a start.
Elisa Martinuzzi – Bloomberg
For most of the traders, bankers, lawyers and accountants who populate the City of London, the era of excessive daytime boozing is long gone. Pubs and pints have been replaced by coffee shops and lattes. Dealmaking hasn’t suffered for it.
India Mulls Selling Control in Some Weak Banks
Siddhartha Singh – Bloomberg
India is considering selling controlling stakes in some of the smaller state-run banks in a bid to raise funds to boost spending on programs for the poor, people with knowledge of the matter said.
Why the Dutch Hate Bankers; The public image of the finance industry has plummeted since the financial crisis.
Ruben Munsterman – Bloomberg
The Netherlands is the cradle of capitalism—the home of the world’s first stock market and the dominant global financial center in the 17th and 18th centuries. Its banking sector was the first to introduce innovations such as international trade finance and underwriting of bonds issued by foreign governments. And its banks today are among the European Union’s safest, most profitable, and most digitally savvy. So why do the Dutch hate bankers so much?
The NASA Veteran Cracking Down on Illegal Gold Miners
Satellite-imaging software helps government officials identify unlicensed mining sites.
Tim McDonnell – Bloomberg
The illegal gold mine is hidden just past a thick grove of cocoa trees, a little ways off the two-lane road through Sagyimase, Ghana, a rural town a couple hours’ drive north of the West African nation’s capital, Accra. It sits on a torn-up patch of ground the size of a football field, where three dozen workers operate backhoes and a tangle of generators, pumps, and hoses, washing peanut-size nuggets of gold out of the red earth. Gold was Ghana’s biggest export last year, and mines like this are common throughout the country, often a more lucrative alternative to cocoa farming. But this mine—like too many others, government officials say—is operating without a valid permit, without oversight of its severe environmental impact, and without paying taxes meant to underwrite the land’s eventual restoration.
China’s Food Is Only Going to Get Pricier; African swine fever is threatening the country’s pork supply. Rising food prices may become more of a headache than the trade war.
Christopher Balding – Bloomberg
Smack in the middle of a trade war with the U.S., China is facing a food shortage that’s raising prices for consumers. If officials can’t keep inflation in check, President Donald Trump’s Twitter tantrums will be the least of their worries.
Renminbi weakness is not a sign of manipulation; Downward pressure on China’s currency is a logical response to US tariffs
The editorial board – FT
The renminbi exchange rate has a new symbolic number for traders to obsess over. For nearly a decade before 2005, the figure implanted in investors’ minds was 8.28, the level at which Beijing targeted its currency against the dollar. Pleas, enticements and threats from the US to let it rise were finally rewarded in 2005 when China let the currency appreciate. After repegging it during the financial crisis in 2008-10 Beijing has since broadly followed a policy of managing the currency’s movements to prevent instability.
Turkey Slams Moody’s Downgrade, Questions Company’s Objectivity
Tugce Ozsoy – Bloomberg
Moody’s decision to downgrade Turkey’s credit rating is incompatible with fundamental indicators, Turkey’s Treasury and Finance Ministry said, adding that the country will never abandon free-market principles.
Ukraine Warns of Gas Crisis as Negotiations With Russia Drag On
Vanessa Dezem – Bloomberg
Talks have stalled over pipeline transit fees after 2019; Minister says it’s ‘highly probable’ deal isn’t made in time
Ukraine is warning European nations to prepare for a gas crisis amid skepticism it will agree on a new transit contract with Russia before the current deal expires.
May’s Sad Legacy Is Bigger Than Brexit; Britain needs policies to promote growth and heal division.
Editorial Board – Bloomberg
Theresa May will be remembered as the prime minister who couldn’t deliver Brexit. But she also leaves her successor another testing legacy: her failure to confront what she has called the U.K.’s “burning injustices.”
U.K. Business Chiefs Run Out of Words to Convey Their Anger at Brexit
Alex Morales and Joe Mayes – Bloomberg
There are only so many ways U.K. business chiefs can express their dismay at the Brexit deadlock engulfing the country.
Airbus Warns European Governments to Prepare for No-Deal Brexit
Benjamin D Katz – Bloomberg
Airbus SE, one of the most outspoken companies about the risk of a no-deal Brexit, is telling European countries to prepare for a worst-case scenario so they aren’t caught flat-footed when the next deadline on Oct. 31 approaches.
The Man Behind ‘Fortnite’; At age 20, Tim Sweeney founded Epic Games in his parents’ basement. His company now owns one of the most popular videogames on Earth. But he doesn’t want the credit.
Sarah E. Needleman – WSJ
By age 30, Epic Games Inc. founder and CEO Tim Sweeney had a couple of successful videogames under his belt and was starting to make real money.
The Personal Finance Industry Is a Scam; Suze Orman’s rant against coffee is the latest in cable-news advice that puts the blame for an increasingly unequal financial system on individuals.
Kashana Cauley – GQ
In 2004, I met personal finance expert Suze Orman—who’s convinced that all we need to do to become millionaires is to quit coffee—after she gave a lecture at the fashion company where I was interning. I was an unpaid legal intern who’d chosen that internship for its free breakfast and lunch. Since I was well on my way to racking up a not-very-unusual law-school debt of $220,000, I sidled up to her afterward to ask her if she had any tips on how to deal with my mountain of soon-to-be-owed money, since she hadn’t mentioned student debt in her speech.