Boom in US penny stock trading prompts warnings of frothy markets

Jun 3, 2024

First Read

Hits & Takes
John Lothian & JLN Staff

The Chicago History Society is honoring Leo Melamed on Wednesday, June 5, at a dinner at the “Making History Awards 30th Anniversary” event presented at the Four Seasons Hotel Chicago. Leo will be presented with the Daniel H. Burnham Making History Award for Distinction in Visionary Leadership. Leo is among six distinguished honorees who have left their mark on Chicago, including Guadalupe Arce, president of Tropical Optical Company; Rick Bayless, American chef & award winning restaurateur, Frontera Grill & Topolobampo; Mary Dillion, president & CEO of Foot Locker; and Liz and Don Thompson, President & CEO/Founder of Cleveland Avenue, LLC. Of course, Leo Melamed is the Chairman Emeritus, CME Group, Inc. If you are interested in attending the event, you can contact Steve Mendes, at stevmend@gmail.com or the Chicago History Museum at 312-642-4600 for details.

On Sunday I received the sad news that Scott Eisner had passed away on Friday after never recovering from heart surgery in March. Eisner was a veteran Chicago financial services executive who was the CFO of Gerald Inc., an FCM at the CME, when I met him when we both worked there. He would also work for Iowa Grain, Peters and Company and HTG, among a long list of notable Chicago futures firms. Scott was good friends with Bill Kaiser, the onetime owner of Zap Futures, for whom Scott served as CEO for a year. Kaiser and Eisner met in the first grade, and later in high school the two were in a rock band together with Eisner on lead guitar.

I remember a particularly poignant story Scott told me about marshmallow peeps that are sold during Easter season. After his first wife died, when he would go into a store and see them selling peeps, which his wife loved, he would just break down and cry. He also told me how lucky he was to have found love for a second time in life with his wife and now widow Traci. The thing I loved about Scott Eisner was that he was real.

Also, after publication on Friday, I found this notice in my email box about a LinkedIn post from ASX about the passing of Maurice Farhart

ASX posted to LinkedIn: It is with deep sadness that we announce the passing of our beloved colleague and friend Maurice Farhart. Maurice worked at ASX in a variety of roles for 21 years, both in Sydney and Chicago. He was a highly respected expert in financial markets, whose insights and expertise were valued by colleagues and peers around the world. Beyond his professional accomplishments, Maurice was a man of many talents. He was a restaurateur who owned many culinary establishments and he had a deep appreciation for fine red wine, and was also an accomplished golfer, pursuits that brought him joy and fulfillment. His love for his family-his wife, three children and four grandchildren, was evident to all who knew him. Maurice’s legacy at ASX is profound. He was not only a mentor and a leader but also a friend to many. His presence, wisdom, and kindness will be deeply missed by all of us. Our thoughts are with his family and friends at this very sad time.

The NIBA is holding its second annual compliance officers group meeting, scheduled for July 10, 2024, at 1:30 PM CT in downtown Chicago. This event will take place at 100 S. Wacker Drive, Suite 250, Chicago, IL, 60606. Compliance officers and industry professionals are encouraged to attend this event for networking, knowledge sharing, and a discussion of the latest developments in compliance and regulatory practices.

AWS Marketplace is holding a webinar on June 12, 2024 about how AI and cloud solutions can enhance financial resilience by streamlining complex processes, improving agility, optimizing revenue streams, and achieving growth in volatile markets. The event will feature speakers including Juha Harkonen, VP commercial partner at Sage; Yuri Polyakov, SVP of applications for finance and workforce planning at Anaplan; Amy Konary, SVP of marketing at Zuora; and Chris Hennesey, enterprise finance strategist at AWS. Topics will cover efficient scaling of operations, optimizing revenue with flexible subscription platforms, enhancing planning and forecasting, and streamlining financial management. AWS Marketplace is a digital software catalog offering a wide selection of data and analytics solutions, simplifying the process of finding, buying, and managing software on AWS. Register HERE.

The Financial Times’ has a special report in today’s edition on upskilling that explores how technology, demographic shifts, and changing demands are transforming the workplace, necessitating new skills training for employees of all ages. The report highlights the role of AI in education, emphasizing the need for teachers to guide students in using technology effectively. It underscores the urgency for businesses and workers to stay informed about technological advancements to avoid obsolescence. Articles within the report cover diverse topics such as retraining workers for the AI era, the importance of both technical and soft skills, and initiatives by companies to ensure their staff possess relevant skills. The report also discusses the trend of employers valuing talent without traditional degrees and the unique challenges faced by marginalized workers in accessing high-quality training.

The former NYMEX trader turned TV personality Eric Bolling has left Newsmax, with the two sides mutually agreeing to part. However, Bolling did not indicate on his last show that he was leaving the network. Before Newsmax, Bolling was at Sinclair Broadcast Group and Fox News.

If you still have the wedding gift you bought when Rupert Murdoch announced his engagement to ex-police chaplain Ann Lesley Smith, but then abruptly called it off in April 2023, you are in luck. Murdoch just married for a fifth time to Elena Zhukova, 67, a retired Russian biologist he met through one of his ex-wives, Wendi Deng, the BBC reported.

Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL

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Our most read stories from our previous edition of JLN Options were:
How Rage, Boredom and WallStreetBets Created a New Generation of Young American Traders from Bloomberg.
CME Group fines, suspends trader for violating wash trades prohibition from FX News Group.
Why Bitcoin (BTC) Price Is Falling Suddenly? from CoinGape. ~JB

Subscribe to the JLN Options Newsletter HERE (it’s free).

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Former CQG President Reflects on Algo Trading, Crypto, and AI’s Impact
JohnLothianNews.com

Josef Schroeter, the former president of CQG, a provider of trading software and market data, shared his insights on the evolution of electronic trading, the rise of crypto, and the potential impact of AI in part three of his interview with John Lothian News for The Path to Electronic Trading video series.

Watch the video »

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Controversial Past Shadows CME Broker’s Present: Bobby Alpert’s Clash with Open Outcry Trading and Social Media

JohnLothianNews.com

Not everyone who participated in the open outcry markets looks back on those days with fondness, or likes to be reminded of them by seeing the videos from The Open Outcry Traders History Project. Case in point is Bobby Alpert, former CME broker and local, half-brother of Barry Lind and one of the administrators of a CME-themed Facebook group. I have been suspended from the Facebook group “Chicago Mercantile Exchange Friends” until June 14, 2024 by one of the administrators. I can only guess it is Alpert, with whom I have previously clashed on other CME-themed Facebook groups. Alpert has expressed his disdain and boredom multiple times upon seeing me post videos from The Open Outcry Traders History Project on Facebook.

To read the rest of this commentary, go »

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Nasdaq partners with FIA Tech
Securities Finance Times
Nasdaq has partnered with FIA Tech to help reduce the complexity of post-trade data processing across the exchange traded derivative market. Nasdaq will integrate its clearing platform, Nasdaq Real-Time Clearing, into FIA Tech’s Trade Data Network. The Trade Data Network combines trade data from buy side, brokers, clearing houses and clearing members into a common framework, creating a shared source of clearing activity for participating firms. The companies say that the partnership will help to reduce systemic inefficiency across the global post-trade network.
/jlne.ws/3yEfDqV

***** When you put two heavy-weights like this together, look out.~JJL

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Chicago Wants to Enlist Remote Workers in Rescue of Downtown; City is touting co-working spaces in iconic tourist locations; Campaign’s goal is to generate economic impact of $10 million
Isis Almeida – Bloomberg
Chicago is still reeling from a lack of workers four years after the pandemic hollowed out US cities. The downtown vacancy rate has been setting records quarter after quarter and recently rose to 22.5%, according to Jones Lang LaSalle Inc. Perceptions of crime aren’t going away, with China’s Cofco International the latest firm to say it plans to leave the city. The population has declined three years in a row.
/jlne.ws/3X6bVAn

***** This is a brilliant idea to provide co-working space at such iconic locations as Navy Pier, the Museum of Contemporary Art and the Chicago Cultural Center.~JJL

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Friday’s Top Three
Our top story Friday was the LinkedIn post from ASX Senior Product Manager Houda Harb mourning the passing of Maurice Farhart. Second was How Rage, Boredom and WallStreetBets Created a New Generation of Young American Traders; An excerpt from Nathaniel Popper’s forthcoming The Trolls of Wall Street, from Bloomberg. Third was a tie between the agreed order issued by the judge in the Langer vs. CME Group lawsuit, and How Trump’s Team Blew It, a guest essay in the New York Times by Renato Mariotti, a partner at Bryan Cave Leighton Paisner in Chicago.

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Lead Stories

Boom in US penny stock trading prompts warnings of frothy markets; Volumes for some sub-$1 shares are above those of Tesla and Apple as retail investors target cheap but volatile names
Jennifer Hughes – Financial Times
A scrap metal merchant and an electric vehicle maker that has sold just four cars top the list of so-called “penny” stocks that are out-trading the likes of Tesla and Apple, prompting some analysts to warn that markets are becoming overheated. Seven of the top 10 most traded US equities in May, as measured by the number of shares bought and sold, are penny stocks worth less than $1, according to Cboe Global Markets. None of the companies are profitable. The huge volumes in so many little-known stocks suggest a renewed appetite among retail investors for cheap names in which they believe they can quickly make a lot of money.
/jlne.ws/4c09oMv

Bursts of Free Power Raise Red Flags for Green Tech Investors
Lars Paulsson and Eamon Akil Farhat – Bloomberg
Something strange is going on in Europe’s power markets: Prices keep dropping below zero. Solar parks on Spanish plains and wind turbines above Norwegian fjords were so productive in May that a record share of clean electricity flooded the grid. At times, supply vastly exceeded demand, and producers needed to do something with all that energy. For more than a million consumers, that meant getting free electricity to heat their homes or charge their vehicles. While good for them, the phenomenon is happening so frequently it’s raising concerns among investors about how much more renewable power they can build into an $800 billion market before returns start to suffer.
/jlne.ws/4c5HhM6

Nvidia market cap jumps by $350bn amid ‘gamma squeeze’; Options trading frenzy fuels wild swings in share price
George Steer – Financial Times
Nvidia has gained $350bn in market value in wildly volatile trading since it reported first-quarter earnings just over a week ago, driven in part by a feedback loop of trading in the chipmaker’s huge options market. The company was valued at $2.69tn by Friday’s close, more than JPMorgan, Berkshire Hathaway and Meta combined, despite a pullback at the end of the week. It has added roughly $350bn since May 23, when it announced surging revenue growth over the first three months of the year. At the peak earlier in the week its value had risen by nearly half a trillion dollars, growing by a sum close to the market capitalisation of Tesla in just a few days.
/jlne.ws/4c33hab

AI is promoted from back-office duties to investment decisions; Asset managers are increasingly using generative artificial intelligence to guide financial choices
Will Schmitt and Brooke Masters – Financial Times
Asset managers are increasingly using artificial intelligence to guide investment decisions, track the habits of portfolio managers and identify moneymaking opportunities. JPMorgan later this year plans to expand the use of a generative AI tool that flags questionable decisions by portfolio managers, such as potentially selling top-performing stocks too soon, company officials told the Financial Times. The tool, dubbed “Moneyball”, is meant to show portfolio managers “how they and the market have behaved in similar circumstances and helps them correct for bias and improve their process”, said Kristian West, head of investment platform for JPMorgan Asset Management.
/jlne.ws/4aRqfQt

Saudi Arabia Puts Wall Street on Notice to Set Up Shop in Riyadh
Nicolas Parasie and Matthew Martin – Bloomberg
Saudi Arabia’s wealth fund is starting to add some new fine print to the documents it sends to bankers hoping to do business with the $925 billion investor. It wants to know whether their firms have obtained a regional headquarters license in the kingdom. The move shows the government is doubling down on efforts to get international financial firms to boost their local presence. Those that don’t display sufficient commitment to the country could soon find it harder to win big business. While banks had initially hoped to sidestep those rules, the pressure is getting harder to resist – especially after Goldman Sachs Group Inc. became the first Wall Street giant to get such a license.
/jlne.ws/4c2Ifs6

CFTC Fines Tether and Bitfinex $42.5M for ‘Untrue or Misleading’ Claims
Nikhilesh De – CoinDesk
The Commodity Futures Trading Commission (CFTC) fined Bitfinex and Tether more than $42 million on allegations that the USDT stablecoin was not fully backed at all times and that Bitfinex violated a previous agency order. The federal commodities regulator settled charges with the sibling crypto companies on Friday, barring both firms from “any further violations of the Commodity Exchange Act (CEA) and CFTC regulations.”
/jlne.ws/3KnRlUy

The Opaque Investment Empire Making OpenAI’s Sam Altman Rich; Many companies backed by CEO do business with the ChatGPT maker and benefit from the AI boom driven by the blockbuster startup, raising questions of conflicts
Berber Jin, Tom Dotan and Keach Hagey – The Wall Street Journal
Sam Altman has a day job and a side gig. Only one of them is making him rich. As the chief executive and co-founder of OpenAI, the 39-year-old oversees an artificial-intelligence startup valued at $86 billion that is spearheading a technological revolution. He owns no stake in the ChatGPT developer, saying he doesn’t want the seductions of wealth to corrupt the safe development of artificial intelligence, and makes a yearly salary of just $65,000. Less publicly, Altman is one of Silicon Valley’s most prolific and aggressive individual investors, managing a sprawling investment empire that is becoming a direct beneficiary of OpenAI’s success. The holdings he controls were worth at least $2.8 billion as of early this year, according to company filings and Wall Street Journal reporting. Much of the portfolio isn’t widely known.
/jlne.ws/4c7lHGZ

The uninsurable world: how the market fell behind on climate change; Surge in floods and fires has caught out the insurance industry and added an ‘uncertainty factor’ to premiums
Ian Smith and Kenza Bryan – Financial Times
Half a century ago, one of the world’s leading reinsurers published a paper on floods, referencing ancient diluvial stories such as the Mesopotamian epic of Gilgamesh, and urged better monitoring of “climatic variations”. The 1970s paper by Munich Re, now the largest in the industry, pointed to global warming, polar melt and other environmental shifts as needing further study, “especially as – as far as we know – its conceivable impact on the long-range risk trend has hardly been examined to date”.
/jlne.ws/4e742AT

Is the London market regaining its fundraising mojo? After the election British policymakers urgently need to jump-start the City’s capital-raising engine
Craig Coben – Financial Times
As the UK gears up for a July general election, London seems to be buzzing again as a hotspot for raising equity. Last month National Grid launched a superjumbo £7bn rights issue – the largest global equity offering this year – to back a massive investment programme. The FTSE 100 has hit record highs this year amid a rebound in investor interest in UK stocks (although there has been a small retreat in the index in recent weeks). And London has outpaced its European counterparts in 2024, raking in over three times more proceeds from overall share sales than second-placed Paris.
/jlne.ws/4bGhIBq

US shale industry’s $200bn dealmaking wave redraws energy landscape; Consolidation battle is forcing shrinking number of oil companies to look further afield for new prospects
Myles McCormick and Jamie Smyth – Financial Times
Dealmaking in US oil and gas has surged to almost $200bn in the past year as the biggest producers compete to swallow up rivals in a race for scale that has redrawn the national energy landscape. But as the country’s best drilling acreage is snapped up, companies are casting a wider net and looking beyond the most sought after oilfields for acquisitions that will bolster their ability to pump hydrocarbons in the years ahead.
/jlne.ws/4aU1tQ4

It’s Crunchtime for a New Generation of Climate Startups; Hundreds of companies are racing to turn new technologies and investor cash into big businesses
Ed Ballard and Amrith Ramkumar – The Wall Street Journal
There is something more important going on in the Welsh city of Wrexham than two Hollywood stars making a feel-good TV show about a little-known soccer team. At a swampy site just outside of town, Material Evolution is building a factory to make a low-carbon alternative to cement, a big contributor to global emissions. It is facing a tougher climb than the local soccer team’s highly publicized effort to get promoted.
/jlne.ws/3KtHtcg

Ukraine Invasion

Basic training in Ukraine is barely covering the basics, commanders say; Ukrainian commanders in the field say they are bracing for most of the new troops under a new conscription law to arrive with poor training.
Isabelle Khurshudyan and Serhii Korolchuk – The Washington Post
As Ukraine prepares to mobilize tens of thousands of men to address a critical shortage of soldiers amid intensified Russian attacks, Ukrainian commanders in the field say they are bracing for most of the new troops to arrive with poor training. Ukrainian commanders have long griped about lackluster preparation for recruits at training centers. But with Russia on the offensive, the persistent complaints are a reminder that a newly adopted mobilization law intended to widen the pool of draft-eligible men is just one step in solving the military’s personnel problems.
/jlne.ws/3x1T2Ed

Vladimir Putin is testing Nato borders for weak spots, security chiefs warn; Frontier disputes with Estonia and Finland could be prelude to Russian bid to seize control in Baltic after overcoming Ukraine
James Rothwell and Roland Oliphant – The Telegraph
Russia has begun probing the borders of Finland and Estonia for weaknesses as it draws up what Western security chiefs suspect is a long-term plan to capture parts of the Baltic region after the war in Ukraine. In the space of just a week, Moscow has ignited border disputes with both Nato member states, issuing a draft proposal to revise its sea border with Finland and removing a series of buoys in Estonian waters used to mark a river frontier with Russia.
/jlne.ws/4bXNzOd

Ukraine ‘fires Himars into Russia for first time’
The Telegraph
Ukraine has fired US-made weapons at targets inside Russia for the first time, according to Russian sources. Russia’s ministry of defence and Russian military bloggers have reported that HIMARS, long-range artillery, were fired by Ukraine at Russia on Saturday evening. “The enemy has begun using Western-made weapon systems to attack ‘old’ Russian territory. These are fragments of M142 HIMARS MLRS shells,” said the sanctioned Russian war reporter and Kremlin propagandist Evgeniy Poddubny on his Telegram channel underneath a slideshow of several photos. “The Russian Army’s air defence crews destroyed more than 10 missiles in the sky over the Belgorod region.”
/jlne.ws/4e8vz5c

Ukraine puts faith in robot army to hold back Russia
Joe Barnes – The Telegraph
On the reconnaissance drone’s pixelated video feed, a small, four-wheeled robot trundles into view, coming to a halt on top of a Russian bunker before unleashing a powerful explosion. The blast shrouds the area in a cloud of smoke, shredding the leaves from nearby trees as debris rains down on the surrounding trench system. This is the moment the Ukrainian troops have been waiting for. But there is no mass infantry assault or tank charge. Instead, a swarm of explosive-laden FPV drones – controlled by Ukrainian soldiers miles away – seeks to exploit the chink in the enemy’s armour, swooping down on the Russians and chasing them through zigzagging trenches that provide little protection against the airborne threat.
/jlne.ws/3KpWo6W

Russia’s nuclear threats are losing their power; The western alliance is intensifying support for Ukraine in a way that was unthinkable at the beginning of the war
Gideon Rachman – Financial Times
Russia is once again waving around its nuclear weapons. Last week, Vladimir Putin warned Nato countries against allowing Ukraine to use western munitions to strike Russia. The Russian leader warned of “serious consequences” and said that Ukraine’s allies should be aware of the “small territory” and “dense population” of many European countries. In case this was too vague, Dmitry Medvedev followed up with a more blood-curdling threat. Russia’s former president cited Putin’s words and added: “The use of tactical nuclear weapons can also be miscalculated. This would be a fatal mistake.”
/jlne.ws/3VadHy4

Israel/Palestine Conflict

Netanyahu shrinks from ceasefire plan as far-right ministers revolt; Despite White House pleas, Israel’s premier made clear his objections to any deal permanently halting fighting in Gaza
Neri Zilber – Financial Times
Benjamin Netanyahu has shied away from a US-backed plan to end the war with Hamas, as Israel’s premier sought space to quell a revolt in his ruling coalition while keeping the White House onside. Israel’s war cabinet convened for crunch talks on the potential deal late on Sunday, but officials close to Netanyahu made clear that any agreement to permanently halt the fighting in Gaza would be unacceptable.
/jlne.ws/4c4qmcM

Exchanges, OTC and Clearing

BME launches new derivative contracts on PUIG shares
BME
With this incorporation, MEFF, BME’s derivatives market, now has 47 Spanish underlyings. MEFF, BME’s derivatives market, has launched today new derivatives contracts on PUIG shares. The company, which started last May 3 in the largest IPO in Spain since 2015 and the largest in the world so far this year, has a market value of 14.7 billion euros and its shares have appreciated by 6.1% since its launch.
/jlne.ws/4e8WPQI

Boerse Stuttgart Records May Turnover Of Around EUR 7,8 Billion – Increases In Structured Securities, Equities And Exchange-Traded Products Compared To The Same Month Of The Previous Year
Mondovisione
Based on the order book statistics, Boerse Stuttgart generated turnover of around EUR 7,8 billion in May, around 8 percent more than in the same month of the previous year. Structured securities made up the largest share of the turnover. The trading volume in this asset class was around EUR 3 billion – an increase of around 5 percent compared to the same month of the previous year. Leverage products generated turnover of around EUR 2,3 billion. Investment products contributed around EUR 677 million to the total turnover.
/jlne.ws/4e8Z7zE

Euronext’s MTS taps Element Capital for new head of business development and strategy; New appointment previously held positions at BlackRock, Fidelity Institutional Asset Management, Cazenove Fund Management and Henderson Global Investors.
Wesley Bray – The Trade
Euronext Group’s fixed income electronic trading platform MTS has appointed Nick Sollom as head of business development and strategy. Sollom brings more than two decades’ experience in financial trading and market strategy to the firm.
/jlne.ws/3VavDIK

Euronext completes the acquisition of Global Rate Set Systems
Euronext
Amsterdam, Brussels, Dublin, Lisbon, Milan, Oslo and Paris – 3 June 2024 – Euronext, the leading pan-European market infrastructure, today announces that it has completed the acquisition of 75% of the share capital of Global Rate Set Systems (GRSS), a leading provider of services to benchmark administrators. In 2023 (YE March), GRSS generated NZ$14.9m (EUR8.6m[1]) in revenue. Euronext’s acquisition of GRSS expands and enhances its index franchise, positioning the Group as a leading player in the calculation and administration of Interbank Offered Rate (IBOR) indices. GRSS provides mission-critical services to the benchmark administrators that produce three of Europe’s critical interest rate benchmarks: EURIBOR® (global, the world’s largest benchmark), STIBOR® (Sweden) and NIBOR® (Norway). GRSS also owns and operates two regulated benchmark administrators that produce CIBOR® (Denmark) and PRIBOR (Czech Republic), and a benchmark administrator that produces the TAB, TADO and ICP indices (Chile).
/jlne.ws/3yLew8U

HKEX Welcomes Huang Yiping And Chang Sun To Mainland China Advisory Group
Hong Kong Exchanges and Clearing Limited
Huang Yiping and Chang Sun appointed to HKEX’s Mainland China Advisory Group
Advisory Group comprises senior industry experts with deep China market knowledge and experience, advising the HKEX Board of Directors on developments in China’s financial markets and economy. Hong Kong Exchanges and Clearing Limited (HKEX) is today (Monday) pleased to announce the appointment of Professor Huang Yiping, Dean of the National School of Development and Director of the Institute of Digital Finance of the Peking University, and Mr Chang Sun, Partner and Chairman, China at TPG, to HKEX’s Mainland China Advisory Group (Advisory Group).
/jlne.ws/3yNAZCj

ICE Mortgage Monitor: Home Prices Cool for Second Straight Month in April as Purchase Demand Softens, Inventory Deficits Improve
Intercontinental Exchange
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of technology and data, today released its June 2024 ICE Mortgage Monitor Report, based on the company’s industry-leading mortgage, real estate and public records data sets. The latest ICE Home Price Index data shows annual home price gains continued to cool in April, marking the second consecutive month of pullbacks. Gains of +6.1% year over year in February slowed to a revised +5.7% in March before easing to +5.1% as of April. As ICE’s Vice President of Enterprise Research Strategy Andy Walden explains, the cooling is apparent from both seasonally adjusted and unadjusted perspectives.
/jlne.ws/457cL1P

B1G Numbers May 2024: Key Figures from SIX Swiss Exchange
SIX
Watch the new “B1G Numbers” video and get first-hand information about the trading and listing activity in the past month on the Swiss stock exchange. The SMI rose significantly in May 2024, climbing by 6.6% to reach 12,000.9 points at the end of the month – its highest level since early May 2022. YTD, the SMI is up 7.8%. Trading turnover also developed very favourably in May. At around CHF 105.6 bn, the increase was 14.7% compared to April 2024 and 20.5% compared to May 2023. Trading transactions show a different picture: around 11% fewer transactions were carried out than in the previous month. Since the beginning of the year, 20.6 mn trades were carried out, slightly down by 2% compared to the first five months of 2023.
/jlne.ws/4e6gkt9

SIX Exchanges Figures: May 2024
BME
SIX publishes the monthly key figures for SIX Swiss Exchange and BME Exchange about the trading and listing activity in Switzerland and Spain.
/jlne.ws/3yHiGOZ

The Global Association of Central Counterparties held its Annual General Meeting 2024 in Athens, Greece.
Global Association of Central Counterparties
The Global Association of Central Counterparties met in Athens from the 27th to the 31st of May 2024. The Annual General Meeting on the 30th of May saw discussions between members including Working Committee updates, the evaluation of the 2024-2025 workplan, and the assessment of future goals within the organisation. The result of the Executive Committee (“ExCo”) elections were announced. Slawomir Panasiuk from KDPW chose not to run following years of dedicated service, and the association extends its gratitude and best wishes for the future. Pablo Rodríguez Elorza from Comder joined the ExCo. The remaining Executive Committee representatives were all re-elected.
/jlne.ws/4c50e18

Forfeiture of Unclaimed Final Dividend for 2017
HKEX
On 12 April 2024, Hong Kong Exchanges and Clearing Limited (“HKEX”) announced that, pursuant to HKEX’s Articles of Association, the final dividend for 2017 of HK$2.85 per share, payable on 1 June 2018 and remaining unclaimed on 1 June 2024, would be forfeited and would revert to HKEX. Accordingly, the unclaimed final dividend for 2017 amounting to HK$14,330,618.79 was forfeited and reverted to HKEX on 1 June 2024.
/jlne.ws/4bz74w9

Record-Breaking Monthly Volume for the Three Months in a row in Clearing Service for Interest Rate Swap
Japan Exchange Group
Japan Securities Clearing Corporation (“JSCC”) is pleased to announce that monthly clearing volume in its clearing services for interest rate swap transactions (“IRS”) reached 314 trillion yen in May 2024, accomplishing record-breaking monthly volume for the three months in a row from March 2024. Since JSCC started IRS clearing service in 2012, JSCC has repeatedly improved its functions so that our users in Japan and overseas should be able to enjoy globally competitive services. Recently, we have been advancing measures for conveniences and efficiencies for users, such as enhancing STP (Straight Through Processing) from swap execution to clearing, and such as expanding cross-margins with listed interest rate products.
/jlne.ws/3KMxCOV

Trading Overview in May 2024
Japan Exchange Group
Japan Exchange Group released Trading Overview in May 2024. Cash Equity Market. In May 2024, the daily average trading value for the Prime Market (domestic common stocks) was JPY 5.2366 trillion. The daily average trading value for the ETF market was JPY 271.0 billion.
/jlne.ws/4c2YKoh

MCX wins ‘The Asian Banker Financial Technology Innovation Award’ 2024 for “Best Financial Market Technology Implementation of the Year”.
Multi Commodity Exchange of India Ltd.
The Multi Commodity Exchange of India Ltd. (MCX), India’s largest Exchange in the Commodity Derivatives Market segment, along with its technology partner Tata Consultancy Services (TCS), was awarded “Best Financial Market Technology Implementation of the Year” at The Asian Banker Financial Technology Innovation Awards 2024. The award was in recognition for implementation of an integrated commodity derivatives market platform encompassing trading, risk management, and clearing and settlement.
/jlne.ws/4e8YUfu

The Moscow Exchange began trading in shares of an open mutual fund for stocks and bonds
MOEX
On June 3, 2024, the Moscow Exchange began trading in shares of the open-ended mutual investment fund (OPIF) “TKB Investment Partners – Balanced Fund” managed by TKB Investment Partners. Trade code – RU000A0JRUQ3 . The fund’s portfolio consists of two parts: the conservative ruble part is invested in high-rated bonds of companies with strong financial performance, the second – in stocks or bonds with high profitability potential. The fund is intended primarily for long-term investments and has a balanced portfolio asset ratio.
/jlne.ws/3KrRtm7

SGX-ST Listings Disciplinary Committee reprimands former Executive Chairman and Chief Executive Officer of Raffles Infrastructure Holdings Limited
SGX
1.The SGX-ST Listings Disciplinary Committee (“LDC”) reprimands Wu Xinhua (“WXH”), the former Executive Chairman and Chief Executive Officer of Raffles Infrastructure Holdings Limited, for breaching the following Mainboard Rules: a. Mainboard Rule 703(4), read with paragraph 25(a) of Appendix 7.1 and Mainboard Rule 1402(5), by causing Raffles Infrastructure Holdings Limited (the “Company”) to disclose: i. in the Company’s SGXNET announcements and annual reports between November 2015 and August 2018, bank balances which were non-factual, false and misleading;
/jlne.ws/4e3ydJj

Fintech

Adviser to $60 Billion of Retail Cash Bets on Private Markets; Mercer Advisors is launching a new platform for clients with at least $5 million in investable assets as it pushes further into a hot corner of the finance world.
Suzanne Woolley – Bloomberg
Mercer Advisors, which manages roughly $60 billion in assets across more than 30,000 families, is pushing deeper into private markets. The wealth-management and financial-planning company will initially give clients with at least $5 million in investable assets access to two funds-of-funds sourced by Mercer’s private markets team, one focused on growth and another primarily on income.
/jlne.ws/3V6wtX1

FactSet to offer BondCliQ corporate bond pre-trade data; The partnership will benefit all FactSet Workstation buy-side and wealth users as well as Portware execution management system (EMS) users.
Claudia Preece – The Trade
FactSet has partnered with Wall Street’s first consolidated corporate bond quote system BondCliQ, to make its corporate bond pre-trade data available to FactSet users. The partnership will enable all the FactSet Workstation buy-side and wealth users and Portware EMS users to access the full quoted market for any corporate bond quoted by BondCliQ’s dealer partners.
/jlne.ws/3VraJ9N

Liquidnet launches new futures rolls negotiation tool; Named Roll Seeker, the new offering will facilitate the bilateral negotiation of blocks at mid prices in fixed income and equity index calendar rolls.
Wesley Bray – The Trade
Liquidnet has unveiled a new tool designed to improve the workflows associated with the execution of futures rolls. Named Roll Seeker, the tool will serve as a means of discovering contra end-user liquidity interest and was developed following member requests to leverage Liquidnet’s block trading expertise.
/jlne.ws/3RaVa3A

Nvidia Unveils Next-Generation Rubin AI Platform for 2026
Ian King and Vlad Savov – Bloomberg
Nvidia Corp. Chief Executive Officer Jensen Huang said the company plans to upgrade its AI accelerators every year, announcing a Blackwell Ultra chip for 2025 and a next-generation platform in development called Rubin for 2026. The company – now best known for its artificial intelligence data center systems – also introduced new tools and software models on the eve of the Computex trade show in Taiwan. Nvidia sees the rise of generative AI as a new industrial revolution and expects to play a major role as the technology shifts to personal computers, the CEO said in a keynote address at National Taiwan University.
/jlne.ws/45bSpoq

AI Firm Plans Private Credit Fund for Servers With Nvidia Chips
Kari Lindberg – Bloomberg
A British artificial intelligence startup plans to launch a private credit fund to buy servers outfitted with high-powered Nvidia Corp. chips to be used by companies in Asia. In its first foray into private credit, Venture Hub, a UK-based AI company operated by ANC Research & Development Ltd., seeks to raise up to $50 million to buy servers using Nvidia H200 graphic processing units, director and founder Alex Cheung told Bloomberg News in an interview Monday.
/jlne.ws/3yIL6br

AMD Announces Future AI Chips, Will Speed Rollout of New Models
Ian King and Vlad Savov – Bloomberg
Advanced Micro Devices Inc. is speeding up introductions of new artificial intelligence processors as it seeks to dent Nvidia Corp.’s domination of that lucrative market. The MI325X will go on sale in the fourth quarter, Chief Executive Officer Lisa Su said in the opening keynote address of the Computex conference in Taiwan. That chip, the successor to the MI300, will feature more memory and faster data throughput, the company said. MI350 will follow in 2025 and the MI400 model a year after that. The move to a roughly annual release cycle matches Nvidia’s plans, set out by CEO Jensen Huang in a speech the night before in Taipei.
/jlne.ws/4e79eEN

Nvidia and AMD Square Off in Fight to Take Control of AI
Vlad Savov, Jane Lanhee Lee and Takashi Mochizuki – Bloomberg
Nvidia Corp. and Advanced Micro Devices Inc.’s chiefs showcased new generations of the chips powering the global boom in AI development, deepening a rivalry that may decide the direction of artificial intelligence design and adoption. Jensen Huang and Lisa Su – both born in Taiwan and now local celebrities for leading US tech powerhouses – employed different tacks in conveying their expertise during back-to-back shows at the world’s largest computing conference this week in Taipei.
/jlne.ws/4c4mJDG

****Similar story from Reuters

AI Fever Lures $2.7 Billion Foreign Funds Back to Taiwanese Stocks; Global investors bought $2.7 billion of local shares in May; Taiwan is still Asia’s best proxy for the AI boom: BI
Abhishek Vishnoi – Bloomberg
Foreign funds snapped a two-month selling streak of Taiwanese equities in May amid renewed optimism around artificial intelligence. Overseas investors bought $2.7 billion of Taiwanese shares, according to Bloomberg-compiled data. That’s a turnaround from when they sold stocks in March and April as Taiwan Semiconductor Manufacturing Co. cautioned over persistent weakness in consumer markets and funds rotated to rival South Korea.
/jlne.ws/3Vrtb27

Atos to Assess New Rescue Offers From Kretinsky, Onepoint
Benoit Berthelot – Bloomberg
Atos SE received revised bids from the two consortia vying to take over the heavily indebted French IT company, and will work with creditors this week to choose between them. Czech billionaire Daniel Kretinsky’s EP Equity Investment and David Layani’s Onepoint made proposals that were consistent with the targets set by Atos, including debt reduction and financing needs, the company said in a statement on Monday. Atos and its creditors will try to reach an agreement by Wednesday, with a final deal to restructure the company targeted for July.
/jlne.ws/3V5YYEc

Cybersecurity

Poland to boost cybersecurity after fake news attack
Reuters
Poland will spend over 3 billion zlotys ($760 million) to boost cybersecurity, the digitalisation minister said on Monday, after state news agency PAP was hit by what authorities say was likely a Russian cyberattack. With European parliament elections to be held in Poland on Sunday, authorities are on high alert for attempts by Moscow to interfere in the vote, fears that intensified on Friday when a false article about military mobilisation appeared on PAP.
/jlne.ws/3X7GRAh

Trump Deepfakes, Misinformation Flood X After Conviction; Supporters with millions of followers emphasized former president’s “outlaw” persona.
Daniel Zuidijk – Bloomberg
Donald Trump’s supporters blasted artificial intelligence-generated images through social media after the former president was convicted of felony charges, using deepfakes to promote the idea that Trump is the victim of a corrupt system. Accounts on X with millions of followers amplified images of Trump within minutes after a New York jury announced that they’d declared him guilty of 34 counts of falsifying business records.
/jlne.ws/3XcxuzD

Money managers racing against new cybersecurity threats
Courtney Degen – Pensions & Investments
For the largest money managers, keeping up with existing and emerging cybersecurity threats means approaching those threats comprehensively. But technologies such as artificial intelligence continue to aid bad actors, sources said, and addressing the ever-changing landscape can be a challenge. “It’s a cat and mouse game,” in which there’s constantly new technology to catch up with, said T. William Roberts III, partner and co-CEO of GW&K Investment Management, which managed $50.7 billion in assets as of Dec. 31.
/jlne.ws/3yGVUae

When Companies Ask for Your Social Security Number, Try Saying No; The number puts you at greater risk of having your identity stolen. And often, the companies don’t really need it.
Heidi Mitchell – The Wall Street Journal
It seems like every time we have to fill in a form, we get asked for nine very valuable numbers. Looking for a gym membership? A certification? A loyalty card at the supermarket? Very often, the business will request our Social Security number-and very often, we provide it without a second thought. But in doing so, we leave ourselves open to cybercriminals. Thieves who get access to your Social Security number can use it to commit serious fraud, such as applying for credit cards, loans and government benefits in your name.
/jlne.ws/4aJY6Lq

Cybersecurity is going to be just as big as AI, says Hightower’s Stephanie Link
CNBC (Video)
Stephanie Link, Hightower Advisors chief investment strategist and portfolio manager, joins ‘Squawk Box’ to discuss the latest market trends, state of the economy, and more.
/jlne.ws/3V5MIU7

Cryptocurrencies

Binance Founder Changpeng Zhao Sentenced to Jail for Money Laundering
Nidhi Kolhapur – Coinpedia.org
Changpeng Zhao, the billionaire founder of Binance, the world’s largest cryptocurrency exchange, has been sentenced to prison. According to CNBC, Zhao is now behind bars in Lompoc, California. This news was confirmed by his defense team at Latham & Watkins. But what landed the crypto kingpin in jail?
/jlne.ws/3V4R9yK

Politics

Podcast series: Martin Wolf on democracy’s year of peril; The FT’s chief economics commentator and special guests examine a critical moment for democratic institutions
Martin Wolf – Financial Times
Following his popular 2023 podcast series on saving democratic capitalism, the Financial Times’ chief economics commentator Martin Wolf is back with a new season exploring democracy’s year of peril: 2024. Across the world, billions of citizens are being asked to cast their vote in elections taking place in more than 50 countries, making this a pivotal year for democracy. But these polls come as populist, illiberal and far-right parties are either growing in support or consolidating gains they have already made.
/jlne.ws/3VmoAhr

Mnuchin Chases Wall Street Glory With His War Chest of Foreign Money; Trump’s former Treasury secretary is going where few seasoned investors can – and where some wouldn’t.
Max Abelson – Bloomberg
The head of a hot cybersecurity startup had good news to share as he walked into his chairman’s office: They had just landed a new investor named Liberty. The chairman racked his brain. Liberty? Why would John Malone’s Liberty Media Corp. – an entertainment empire – be interested, he asked, according to a person who witnessed the exchange two years ago.
/jlne.ws/3RbMKcd

Europe Election Will Show What Voters Really Think of Green Deal; The upcoming parliamentary election will show how the world’s most ambitious climate plan is playing with voters five years after its inception.
Ewa Krukowska, Samy Adghirni, and Petra Sorge – Bloomberg
The world’s most ambitious climate plan has become a major political liability. Public support for the European Union’s Green Deal, aimed at eliminating carbon emissions by 2050, is under threat as an energy crisis hits voters’ wallets. A flood of incentives for clean technologies unleashed by the US and China has also stoked concerns that Europe’s sticks-over-carrots approach will make it less competitive.
/jlne.ws/3VaKQJZ

Russia is mustering its forces ready to attack from a completely different direction; Open warfare would create an environment in which nothing could survive
David Axe – The Telegraph
Russia has launched yet another spacecraft with anti-satellite capabilities. That’s right – another killer satellite in near-Earth space that’s increasingly crowded with them. It’s all well and good as long as these spacecraft hold their fire. In the event of war, however, the orbital clash could spread millions of high-velocity fragments of plastic and metal, raising the risk to the satellites we depend on for communication, navigation and other strictly peaceful purposes. Even the International Space Station would be in danger.
/jlne.ws/4c3udGR

Russia-China gas pipeline deal stalls over Beijing’s price demands; Power of Siberia 2 project would offer lifeline to exporter Gazprom as Moscow’s dependence on its neighbour grows
Max Seddon, Anastasia Stognei, Henry Foy and Joe Leahy – Financial Times
Russia’s attempts to conclude a major gas pipeline deal with China have run aground over what Moscow sees as Beijing’s unreasonable demands on price and supply levels, according to three people familiar with the matter. Beijing’s tough stance on the Power of Siberia 2 pipeline underscores how Russia’s invasion of Ukraine has left President Vladimir Putin increasingly dependent on Chinese leader Xi Jinping for economic support.
/jlne.ws/3X7Ytw2

How Liz Truss still haunts markets; Disastrous UK mini-Budget of 2022 proves cautionary tale for US government
Katie Martin – Financial Times (opinion)
Every time government bond prices dip, one name comes up: Liz Truss. The former UK prime minister, whose brief tenure failed to outlast a supermarket lettuce, has not assumed a George Soros-style role. She is not running a fund with the power and guts to make or break the world’s most respected monetary authorities. But her lasting gift to financial markets is this lesson: if you play silly games in bond markets, you win silly prizes. Her poorly received fiscal plans in the autumn of 2022 brought the gilts market to the brink of disaster, catapulted the UK’s pensions industry into chaos and sent ripples across global markets.
/jlne.ws/45f5xJq

Regulation

MicroStrategy and Its Co-Founder Saylor Will Pay $40 Million to Settle DC Tax Fraud Lawsuit; DC AG sued Michael Saylor last August over unpaid income tax; AG says settlement is district’s ‘largest income tax recovery’
stacy-marie ishmael and Paige Smith – Bloomberg
MicroStrategy Inc. and its co-founder and Chairman Michael Saylor will pay $40 million to resolve a tax fraud lawsuit. The Washington, DC, attorney general’s office sued Saylor in August 2022, alleging the crypto billionaire had failed to pay more than $25 million in income taxes. The lawsuit alleged that Saylor had knowingly avoided paying taxes despite living in Washington for more than a decade. At the time, Saylor denied the allegations, saying that he lived in Florida.
/jlne.ws/4c4AH8w

ASIC trains its sights on private equity
Hans van Leeuwen – AFR
The Australian Securities and Investments Commission has started investigating the seismic shift of capital from public markets towards private equity, with ASIC chairman Joe Longo saying the issue was “floating to the top” of his in-tray. He said ASIC was concerned about the impact of the drop in initial public offerings (IPOs), and would look for potential issues emerging from the faster growth of private markets. This follows the Reserve Bank of Australia recently raising similar concerns.
/jlne.ws/459L0FX

CFTC Proposes Amendments to Whistleblower Awards Process and Anti-Retaliation Authority
Lewis M. Csedrik, Levi McAllister Of Morgan, Lewis & Bockius LLP – Law Flash via The National Review
The amendments would make the CFTC’s whistleblower awards process more uniform with the SEC’s program and would enable the CFTC to bring enforcement actions against employers that retaliate against whistleblowers. On August 30, the Commodity Futures Trading Commission (CFTC or Commission) requested comments on proposed amendments to its whistleblower awards process and anti-retaliation enforcement authority. The proposed amendments are intended to enhance the transparency of the award evaluation and review process and to clarify CFTC staff authority to administer the whistleblower program. The proposed amendments also reinterpret the CFTC’s authority to take enforcement action where whistleblowers are retaliated against.
/jlne.ws/3wYHnGk

SEC Charges Robert Scott Murray and Trillium Capital with Fraudulent Scheme to Manipulate SEC
The Securities and Exchange Commission today charged Robert Scott Murray and Trillium Capital LLC, a private company controlled by Murray, with a fraudulent scheme to manipulate the stock price of Getty Images Holdings Inc. by announcing a phony offer by Trillium to purchase Getty Images. Murray, of Mashpee, Mass., is a former CEO and CFO of several publicly traded companies.
/jlne.ws/4e3tEP7

SEC Obtains Final Judgment Against Houston Resident Charged with Insider Trading Based on Information Misappropriated from His Wife
SEC
On May 28, 2024, the U.S. District Court for the Southern District of Texas entered a final judgment against Tyler Loudon of Houston, Texas. As alleged in the SEC’s complaint filed on February 22, 2024, Loudon misappropriated material, nonpublic information regarding the proposed acquisition of TravelCenters of America Inc. by BP p.l.c. from his then wife, who was a BP employee working on the deal. Between December 22, 2022 and February 6, 2023, Loudon purchased approximately 46,000 shares of Travel Centers stock. After the acquisition was announced on February 16, 2023, Loudon realized an illicit profit of $1,760,000.
/jlne.ws/4bKbdxj

5 million+ Australians have struggled to make loan and debt repayments, yet many not asking for help
ASIC
Australians are being urged to directly seek financial hardship assistance from their bank or lender, as new nationwide research released by ASIC’s Moneysmart sheds light on the state of financial hardship in Australia. The research found that 47% of Australian adults with debt, the equivalent of 5.8 million people, have struggled to make repayments in the last 12 months. The top reasons for this include cost of living pressures, reduced income and unexpected expenses.
/jlne.ws/3RawRm4

SFC meets Capital Market Authority and Saudi Tadawul Group in Saudi Arabia
SFC
The Securities and Futures Commission’s (SFC) Chief Executive Officer, Ms Julia Leung, and its Executive Director of Investment Products, Ms Christina Choi, concluded their Middle East business trip after meeting yesterday with the head of the Capital Market Authority (CMA) and senior executives of Saudi Tadawul Group (parent company of the Saudi Exchange) in Riyadh, the Kingdom of Saudi Arabia.
/jlne.ws/4c2mpoW

IOSCO publishes Final Report on Leveraged Loans and CLOs Good Practices for Consideration
IOSCO
IOSCO today published its Final Report: Leveraged Loans and Collateralised Loan Obligations (CLOs) Good Practices for Consideration. IOSCO has been following the evolution of the Leveraged Loans and CLO markets, including significant shifts in market practices that emerged during the ‘low-for-long’ interest rate environment. In its analysis IOSCO has focussed on examining the impact of fewer and looser covenants on investor protections, whether there is adequate transparency in these markets and the scope for potential conduct-related issues to arise.
/jlne.ws/3x0o8Ms

Investing and Trading

Investors, worried they can’t beat lawmakers in stock market, copy them instead; A loose alliance of investors, analysts and advocates is trying to let Americans mimic the trades elected officials make – but only after they disclose them.
Jacqueline Alemany – The Washington Post
Members of Congress hear a lot of secrets: classified briefings, confidential previews of pending legislation and the private opinions of constituents, regulators, corporate executives and world leaders. Watchdog groups have long believed that some lawmakers use that information to make money in the stock market. Now a loose alliance of traders, analysts and advocates is trying to let Americans mimic the trades elected officials make, offering tongue-in-cheek financial products – including one named for former House speaker Nancy Pelosi (D-Calif.) and another that refers to Sen. Ted Cruz (R-Tex.) – that track purchases and sales after lawmakers disclose them.
/jlne.ws/3VpU8TN

GameStop Shares Double as Gill Post Shows $116 Million Bet
Sangmi Cha and Subrat Patnaik – Bloomberg
GameStop Corp. shares more than doubled after the Reddit account that drove the meme-stock mania of 2021 posted what appeared to be a $116 million position in the game retailer. The June 2 screenshot by Keith Gill, who goes by DeepF- Value on Reddit, shows five million shares bought at $21.27 apiece. It was the account’s first post in three years. The screenshot, which also included 120,000 call options worth $65.7 million due to expire on June 21, couldn’t be verified. The options would allow him to buy the stock at $20 a share.
/jlne.ws/4c0aCaw

Senior trader Diego Megia kicked off his new hedge fund with $5 billion and closed it to new money on the very first day, becoming one of the largest startups in recent years. As much as $3 billion of the capital for his Taula Capital Management was raised from Millennium and the rest from investors including asset managers, pension plans and sovereign wealth funds, according to a person with knowledge of the matter. Megia’s Millennium colleague Stefan Ericsson joined as deputy chief investment officer at the firm, which started on June 1, the person s
/jlne.ws/3wYKz4O

Ackman’s Pershing Square raises $1.05 billion in stake sale ahead of potential IPO
Reuters
Billionaire Bill Ackman’s Pershing Square Capital Management has raised $1.05 billion by selling 10% stake in the hedge fund to a consortium of institutional investors and family offices, it said on Monday. The sale is a precursor to a potential initial public offering that could happen next year or in 2026. Investors are valuing the firm at $10.5 billion, Reuters reported last week.
/jlne.ws/4e4q4Eu

‘She Hooked Me’: How an Online Scam Cost a Senior Citizen His Life’s Savings; She convinced him she was a rich young Chinese immigrant looking for love. After bleeding him dry, she ghosted him. He still longs for her.
Feliz Solomon – The Wall Street Journal
It began with a notification: A user wanted to connect on LinkedIn, and sent a note saying she thought the man’s profile was impressive. She seemed polite and attractive. The man, a 75-year-old professional who lives in the American Midwest, replied.
/jlne.ws/3RaS4w9

Why Saudi Aramco Stock Is a Tough Sell on Wall Street; The world’s biggest oil producer is trying to tempt global investors with a $12 billion share sale, but the price looks expensive
Carol Ryan – The Wall Street Journal
Saudi Aramco’s generous dividends can only go so far in making up for an overpriced initial public offering. The Saudi Arabian national oil company will sell shares worth up to $12 billion in an offering this week. The Saudi government, which will still own more than 80% of Aramco at the end of the sale, will use the proceeds to fund the country’s cash-hungry Vision 2030 initiatives. Projects designed to help diversify the Saudi economy away from oil, such as futuristic desert city Neom, haven’t attracted the flood of foreign capital Riyadh expected.
/jlne.ws/4aLbS07

The Insurance Market Is Flirting With Natural Disasters; Investors are again becoming attracted to catastrophe risk as an expected active hurricane season begins
Telis Demos – The Wall Street Journal
Despite warnings of a potential surge in Atlantic storms this summer, insurance for catastrophes is once again attracting capital. Investors do have some reasons to be confident, but they shouldn’t be overconfident. The National Oceanic and Atmospheric Administration recently forecast its highest-ever number of storms for its May outlook of the Atlantic season. The most likely range includes four to seven major hurricanes. Other researchers have also predicted a “hyper-active” storm season.
/jlne.ws/3KqLSML

Environmental, Social and Corporate Governance

Vermont becomes first US state to make Big Oil pay for climate damages; Victory for campaigners is expected to face legal challenges from fossil fuel companies
Aime Williams and Jamie Smyth – Financial Times
Vermont has become the first US state to order fossil fuel companies to pay for climate damages, handing a victory to campaigners pushing for polluters to be held more financially accountable. The northeastern state is one of several where lawmakers have fought to pass bills that would hold oil and gas companies responsible for a portion of the region’s greenhouse gas emissions, and pass on the costs.
/jlne.ws/3yVxmdm

In threat to climate safety, Michigan to woo tech data centers with new laws; Opponents of bills argue ‘offramp’ to keep gas or coal plants running will be triggered if energy-heavy centers are built
Tom Perkins – Financial Times
Michigan Democrats are poised to pass legislation aimed at attracting big-tech data centers, but opponents say the bills would destroy nation-leading climate laws the same legislators approved in November because the centers consume massive amounts of electricity. The November climate bills included an “offramp” that would keep gas or coal plants running if renewable sources could not handle the energy grid’s load, and the stipulation would almost certainly be triggered, opponents say.
/jlne.ws/3RbUsD1

Barclays Says Blacklists Set to Grow With EU’s New ESG Fund Rule
Greg Ritchie and Frances Schwartzkopff – Bloomberg
Analysts at Barclays Plc are warning that a growing number of stocks will be consigned to exclusion lists as new European Union rules for ESG funds are enforced. The EU’s fund naming rules, announced earlier this month, place limits on how freely asset managers can claim a fund lives up to environmental, social and governance goals. Newly created funds will need to comply immediately, while existing ESG funds will be subject to a nine-month window to either prove compliance or abandon the label. The new framework for ESG funds entails “strict” mandatory exclusions, Barclays analysts Scott Gordon and Jordan Isvy said in a note on Friday.
/jlne.ws/3Kp0a0u

It’s Crunchtime for a New Generation of Climate Startups; Hundreds of companies are racing to turn new technologies and investor cash into big businesses
Ed Ballard and Amrith Ramkumar – The Wall Street Journal
There is something more important going on in the Welsh city of Wrexham than two Hollywood stars making a feel-good TV show about a little-known soccer team. At a swampy site just outside of town, Material Evolution is building a factory to make a low-carbon alternative to cement, a big contributor to global emissions. It is facing a tougher climb than the local soccer team’s highly publicized effort to get promoted. Hundreds of young climate companies like Material Evolution are burning through cash and racing to turn new technologies into big businesses. The transition period is called the “valley of death” because so few startups survive it.
/jlne.ws/4bVwu7a

The Insurance Market Is Flirting With Natural Disasters; Investors are again becoming attracted to catastrophe risk as an expected active hurricane season begins
Telis Demos – The Wall Street Journal
Despite warnings of a potential surge in Atlantic storms this summer, insurance for catastrophes is once again attracting capital. Investors do have some reasons to be confident, but they shouldn’t be overconfident. The National Oceanic and Atmospheric Administration recently forecast its highest-ever number of storms for its May outlook of the Atlantic season. The most likely range includes four to seven major hurricanes. Other researchers have also predicted a “hyper-active” storm season.
/jlne.ws/4bYZBWW

Global Banks Start Targeting a New Breed of Real Estate Risk; BNP recently unveiled new targets for CRE financed emissions; Banks face diminishing CRE portfolio values due to energy risk
Frances Schwartzkopff and Gautam Naik – Bloomberg
At some of the world’s biggest banks, loans to commercial real estate face new litmus tests that promise to shape the sector’s access to financing. At issue is the carbon emissions of buildings and the expected cost of upgrades needed to stay on the right side of new green regulations. The European Union just passed its Energy Performance of Buildings Directive (EPBD), which forms part of a growing array of net zero regulations. And too-big-to-fail banks are starting to react.
/jlne.ws/4bK89Bj

Bursts of Free Power Raise Red Flags for Green Tech Investors; Prices below zero may slow the deployment of renewables; There aren’t enough batteries to store wind, solar energy
Lars Paulsson and Eamon Farhat – Bloomberg
Something strange is going on in Europe’s power markets: Prices keep dropping below zero. Solar parks on Spanish plains and wind turbines above Norwegian fjords were so productive in May that a record share of clean electricity flooded the grid. At times, supply vastly exceeded demand, and producers needed to do something with all that energy.
/jlne.ws/4e8TelG

Australia’s First Green Bond Lures Funds Keen on Curve Building; Building green curve brings credibility to debt program: BNP; Australia to price first green bond on Tuesday, eyes more
Matthew Burgess and Greg Ritchie – Bloomberg
Investors are welcoming Australia’s plans to build a sovereign green bond curve following its debut issuance this week, even as questions mount over the nation’s effort to cut carbon emissions. Australia will price about A$7 billion ($4.7 billion) in green bonds maturing June 2034 on Tuesday, as markets face a deluge of deals to finance projects that provide environmental benefits. The government intends follow-on sales at different maturities, following peers including Germany and France in building out a green yield curve.
/jlne.ws/4aLNjjP

Medical Schools Around the World Are Expanding Their ‘Climate Change Curriculums’
Medical students are pushing their schools to teach more about the health impacts of climate change.
Kiley Price – Inside Climate News
Three years ago, a group of eco-conscious students at Harvard Medical School conducted a poll with their fellow classmates and found that there was strong interest in ramping up climate health education in their courses. With support from faculty, the Students for Environmental Awareness in Medicine (SEAM) forged a path toward a full “climate change curriculum” for first year medical students at Harvard, which was implemented in 2022.
/jlne.ws/4e6btYX

A German Climate Activist Won’t End His Hunger Strike, Even With the Risk of Death Looming; Nearly three months into his fast, Wolfgang Metzeler-Kick says he won’t eat until the German government acknowledges the severity of the climate crisis and the world’s failure to address it. German Chancellor Olaf Scholz shows no inclination of doing that.
Keerti Gopal – Inside Climate News
Eighty-five days into a hunger strike, German environmental engineer and climate activist Wolfgang Metzeler-Kick had lost more than 61 pounds, his face and body were gaunt and his blood sugar was critically low. The physicians overseeing the health of the four remaining hunger strikers in Berlin, Germany have ceded responsibility and advised him to give up his fast, warning he could collapse any day, and that he is at high risk of falling into a coma or going into sudden cardiac arrest.
/jlne.ws/3X21T3t

La Nina switch expected to fuel extreme weather later this year; Chances rising of a swing in Pacific currents and knock-on effects of ocean cooling phase, warns UN agency
Kenza Bryan and Steven Bernard – Financial Times
/jlne.ws/3yGPTdE

Germany likely to miss 2030 climate goal, government advisors say
Riham Alkousaa and Markus Wacket – Reuters
/jlne.ws/4c2TSzl

OPEC+ bets the robust crude oil demand forecast is right
Clyde Russell – Reuters
/jlne.ws/3X3Jbbx

No need to reduce aviation growth to hit net zero, IATA head says
Reuters
/jlne.ws/3yMjC4T

Shell Loses Appeal Over Case Stopping South Africa Seismic Work; Supreme Court of Appeals dismissed the appeal on Monday; SCA suspends orders setting aside exploration-right grant
Paul Burkhardt – Bloomberg
/jlne.ws/4aKrEbJ

Institutions

Elon Musk and Jamie Dimon Are Making Peace; After years of feuding, the business titans spoke at an exclusive JPMorgan summit, opening the door to their working together again
Dana Mattioli and David Benoit – The Wall Street Journal
Elon Musk and Jamie Dimon have been patching things up. The two business titans have been feuding since a 2016 fallout. Musk’s companies, including Tesla and SpaceX, have spurned JPMorgan Chase bankers, and the nation’s largest bank hasn’t wooed his business empire.
/jlne.ws/3VaylOi

Ackman’s Pershing Square raises $1.05 billion in stake sale ahead of potential IPO
Reuters
Billionaire Bill Ackman’s Pershing Square Capital Management has raised $1.05 billion by selling 10% stake in the hedge fund to a consortium of institutional investors and family offices, it said on Monday. The sale is a precursor to a potential initial public offering that could happen next year or in 2026. Investors are valuing the firm at $10.5 billion, Reuters reported last week.
/jlne.ws/4e4q4Eu

Ex-Millennium Trader Megia Debuts Hedge Fund With $5 Billion
Nishant Kumar – Bloomberg
Millennium Management’s former senior trader Diego Megia kicked off his new hedge fund with $5 billion and closed it to new money on the very first day, becoming one of the largest startups in recent years. As much as $3 billion of the capital for his Taula Capital Management was raised from Millennium and the rest from investors including asset managers, pension plans and sovereign wealth funds, according to a person with knowledge of the matter. Megia’s Millennium colleague Stefan Ericsson joined as deputy chief investment officer at the firm, which started on June 1, the person s
/jlne.ws/3wYKz4O

Work & Management

Employers face a rising climate conundrum; Younger workers in unexpected places are pressing their firms to take serious action on emissions
Pilita Clark – Financial Times
Not that long ago, I met a lawyer in London named Tom Goodhead who said something that stayed with me. His firm, Pogust Goodhead, takes class actions against big companies for environmental disasters and he said one reason for its rapid growth was the large number of young lawyers eager to join from older, more established firms that cheerfully defended the same companies. I later spoke to a young litigator Goodhead had hired from a global corporate law firm with a lot of fossil fuel clients. “I took a big career risk to be on the right side of history,” Edmund Bentsi-Enchill told me. “But it’s definitely worth it.”
/jlne.ws/3RaJkqa

The challenges of upskilling for marginalised workers; Getting up to speed with the latest technology can be particularly difficult without access to high-quality training
Oliver Balch – Financial Times
When Scott Moore lost his job in 2015, because of budget cutbacks at the university department where he worked, the visually impaired software engineer was not too worried. After a decade’s experience in IT, he considered himself an expert at building websites and apps. “It was only when I was out there looking for new jobs that I realised I didn’t have the right skillsâEUR‰.âEUR‰.âEUR‰.âEUR‰the whole web development field had moved on so fast and I just hadn’t kept up,” he recalls.
/jlne.ws/3X25pLd

What are organisations doing to ensure staff have the right skills? From learning about AI and virtual reality to developing soft skills, companies are trying to keep pace with rapid change
Nick Huber – Financial Times
Organisations have long claimed that employees are their greatest asset but the mixed quality of training suggests otherwise, according to recent research. As organisations struggle to find workers with the right skills, and technologies including artificial intelligence require workers to “upskill”, or learn new skills faster, what does good training look like?
/jlne.ws/3VohkSm

Wellness Exchange

Magic Mushrooms Get Canadian Export License in Psychedelic Race; Startup making mushrooms and MDMA gets green light for sales; Lululemon founder’s son JJ Wilson betting on psilocybin demand
Thomas Seal – Bloomberg
Canada has licensed a startup to export psychedelics to Australia for patient use, the latest milestone in a contest to supply the potential growth of medical psychedelic drugs. Canada’s health department awarded a drug establishment license to Optimi Health Corp., a spokeswoman for the company said, allowing it to ship pills containing the magic-mushroom extract psilocybin and MDMA – controlled and otherwise-illegal substances – to a provider in Australia.
/jlne.ws/4c0IdkG

The Boom in Beer That’s Being Driven by Health-Conscious Drinkers; AB InBev’s Olympic deal shows how much brewers are pushing no-alcohol beer.
Sarah Jacob, Sabah Meddings, and Andy Hoffman – Bloomberg
Bottles of beer emblazoned with the five Olympic rings are already rolling off the production line at Anheuser-Busch InBev NV’s brewery in Belgium, in preparation for the games in Paris this summer. It has been 100 years since the French capital last hosted the summer Olympics, and the city wants to make a mark after Covid meant the Tokyo Games were held in virtually empty stadiums. And now, for the first time ever there will be a beer sponsor for an event that showcases the pinnacle of human sporting achievements. But in this case, the drink – Corona Cero – doesn’t have any alcohol.
/jlne.ws/3VnX43d

Regions

Indian markets hit record highs as exit polls forecast Modi victory; Nifty 50 stock index jumps and rupee strengthens against dollar
Chris Kay – Financial Times
Indian markets hit record highs after exit polls forecast a landslide election win for Prime Minister Narendra Modi, whose third term promises investors a resumption of his infrastructure-led economic drive and market-friendly reforms.
/jlne.ws/3x0AkNd

Australia orders Chinese-linked funds to sell rare-earth stakes in ‘national interest’; Canberra is trying to create stronger supply chain for critical minerals in the energy transition
Nic Fildes – Financial Times
Australia’s government has ordered funds linked to a Chinese businessman to cut their stakes in a rare-earths miner, in a sign of how control of critical minerals is becoming a political concern. Jim Chalmers, Australia’s treasurer, cited national interest grounds in demanding that Yuxiao Fund and four associates reduce or dispose of their stakes in Northern Minerals, a Western Australian rare-earths developer.
/jlne.ws/3X5n70c

Indonesia’s inflation rate cools in May, comes in below forecast
Reuters
Indonesia’s annual inflation rate eased more than expected to 2.84% in May from 3.0% in April, data from the statistics bureau showed on Monday, remaining within the central bank’s 1.5% to 3.5% target range.
/jlne.ws/3UZviIU

Google says tech infrastructure investment in Singapore reaches $5 bln
Reuters
Alphabet’s Google said on Monday the completion of its data centre and cloud facilities expansion in Singapore meant it had invested $5 billion in its technical infrastructure in the Southeast Asian nation.
/jlne.ws/3UZvmbC

Red tape clogs China’s offshore IPO pipeline even as markets recover
Kane Wu, Julie Zhu, Selena Li and Scott Murdoch – Reuters
More than a year after China pledged to smoothen the process for offshore listings, firms are reeling from a regulatory logjam that is unlikely to ease soon, and staring at the prospects of sharply lower valuations even as market sentiment improves.
/jlne.ws/3X8oR9c

European gas price jumps 13% after Norwegian outage; Rise highlights continuing market unease despite close to record levels of storage
Shotaro Tani – Financial Times
Europe’s gas price on Monday jumped to its highest level this year following an outage at a gas processing plant in Norway, highlighting the increasingly pivotal nature of Norwegian supplies after the continent largely weaned itself off Russian imports.
/jlne.ws/4aKC9vM

Sweden’s Seventh AP Fund excludes Saudi Aramco and six other companies
Reuters
Sweden’s Seventh AP Fund (AP7) has blacklisted Saudi Aramco and six other companies from its portfolio all due to large-scale operations within oil extraction or coal production, the pension fund manager said on Monday.
/jlne.ws/3x0bD3w

Scholz Will Visit German Regions Battling Widespread Flooding; Chancellor says extreme weather reflects climate change; Hundred-year weather events are now happening regularly
Petra Sorge – Bloomberg
Southern Germany continues to battle flooding from heavy rainfall that’s disrupted transportation and pushed emergency services to their limits. Chancellor Olaf Scholz, who plans to visit some of the affected regions on Monday, said recent instances of extreme weather highlight “the challenges in view of the rise in the earth’s temperature and climate change.”
/jlne.ws/4aLNA6l

Russian Oil Finds New Site for Controversial Cargo Switching; Cargo switching by tankers has raised alarm in EU capitals; Swapping cargoes at sea is considered ‘dangerous’ by UN
Sherry Su – Bloomberg
Under pressure from Greece’s navy, traders of Russian oil have found a new place to switch cargoes of crude in the Mediterranean sea, a sign of how hard it will be to clamp down on an activity that has alarmed regulators and European governments alike. Tankers hauling Russia’s flagship grade Urals are in the midst of transferring it from smaller tankers onto a larger one near the city of Nador at the eastern end of Morocco’s coast on the Mediterranean, ship-tracking data gathered by Bloomberg show.
/jlne.ws/3KpCKIz

Miscellaneous

Oberweis Dairy sold in bankruptcy auction
Ally Marotti – Crain’s Chicago Business
The investment arm of a Winnetka-based private-equity firm placed the winning bid for Oberweis Dairy in the company’s bankruptcy auction this morning. It plans to keep the name of the storied dairy maker. Oberweis, which traces its roots to a horse-drawn-wagon milk delivery operation in 1915, filed for Chapter 11 bankruptcy protection in April. After four generations of ownership, the North Aurora-based company ran into financial trouble in the years following the pandemic. Oberweis started bankruptcy proceedings to search for a buyer after a failed attempt to sell itself late last year. Allured by the cachet of the Oberweis brand and the money-making potential that still exists in the dairy industry, bidders started circling soon after the bankruptcy filing. The stalking horse bid, which set the low end of the bidding price, was from Brian Boomsma, co-owner of Dutch Farms
/jlne.ws/3Vl0kw6

Lost Change, Found Fortune: The Thrill of Collecting America’s Abandoned Coins; We throw out millions of dollars worth of coins each year. These people find joy in scooping them up.
Oyin Adedoyin – The Wall Street Journal
There are two types of people: those who overlook the glinting coins in their path, and those who never fail to spot them. Sarah Bowen Shea is firmly in the latter category. The co-founder of the online community Another Mother Runner, she routinely scoops up coins during her runs. She discovered a Chicago Sacagawea coin worth $1.27 one January, and nabbed $1.22 worth of coins (including a quarter plucked from a pond) last July. Another time, she netted a whopping $4.33 in a single run.
/jlne.ws/3X8z3yu

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The Stock Market Has Rarely Been This Sleepy

Lead Stories The Stock Market Has Rarely Been This Sleepy Gunjan Banerji - The Wall Street Journal It's eerily calm out there in the stock market. The Cboe Volatility Index, or VIX, dropped below 12 last week, a nearly five-year low. The gauge, based on options prices...

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