Hits & Takes
John Lothian & JLN Staff
Boeing decided to move its headquarters from Chicago to Arlington, Va., after the 20-year deal the City of Chicago gave Boeing expired and there are better reasons to be closer to the decision-makers in Washington than the now decimated shopping district of the Magnificent Mile in Chicago. With crime in downtown, people working from home and no more government incentives to stay in Chicago, this move makes perfect sense for Boeing.
ED&F Man is in talks to sell its brokerage business, Bloomberg reports. Marex has reportedly made an offer. What is ironic here is that Marex was formed when Refco was sold to MF Global. Marex was the London operation of Refco that MF Global did not need as it was redundant. Man Group, the publicly traded hedge fund, was created from being spun out of ED&F Man, with Man Financial later spun out from Man Group into MF Global. And of course, ED&F Man has a 230+ year history in the sugar trade. I wonder what was on those sugar boats when they weren’t carrying sugar? For some reason I never hear that story told by ED&F Man or any other Man-related companies when they talk about their 230+ year history. This might not be a history I would want to buy.
Things that are cheap these days: Used Teslas in Hong Kong. You can add foreign-made PCs in China to the list. Get ready to buy some cheap used PCs from China. Bloomberg reports China has ordered state firms to replace foreign-branded personal computers with domestic alternatives.
The Wall Street Journal has a story titled “How to Avoid Getting Dragged Into Meetings.” The sub headline is “Burned out on brain-storming sessions? Here are smart strategies to avoid them and other nonproductive gatherings.” Let’s have a meeting and discuss this.
Three co-founders of BitMEX are being fined $30 million in civil monetary fines for illegally operating a cryptocurrency derivatives trading platform and anti-money laundering violations. Arthur Hayes, Benjamin Delo, and Samuel Reed are each required to pay $10 million for their actions.
Commissioners Caroline D. Pham and Kristin N. Johnson weighed in with statements about the penalties. Pham’s statement is here and Johnson’s here. BTW, Commissioner Johnson also announced her initial staff appointments yesterday.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
Arne Staal’s First Adventure to FIA Boca and Miami is to a Lively Crypto Center
JLN interviewed Arne Staal, the head of FTSE Russell, who was at his first FIA Boca conference and in the Miami, Florida area for the first time, about crypto markets (a hot topic in Boca and Miami) and other popular topics at the conference.
FIA’s International Derivatives Expo is returning to The Brewery in London this coming 6-8 June. Standing still is not an option in today’s evolving cleared derivatives environment. Without adapting to new products, processes, technologies and regulations, your business won’t meet the needs of tomorrow’s industry. We’re bringing together industry leaders, vendors and policymakers to discuss what’s “now” in derivatives, and what lies ahead. Sign up by 30 April for the best rates!
Boeing Exits Chicago as City Wrestles With Crime, Exodus; Planemaker is shifting its headquarters to Arlington, Virginia; Boeing has had its headquarters in the Windy City since 2001
Steve Stroth and Julie Johnsson – Bloomberg
Boeing Co.’s decision to leave Chicago is the latest blow to a U.S. city that already has seen its once-mighty economy battered by Covid-19 and crime. The planemaker said Thursday that it will shift its headquarters to Arlington, Virginia, from Chicago, a move that would put Boeing near federal government decision-makers in Washington.
****** JJLCO also moved its headquarters, but for other reasons.~JJL
The Davos Set Is Reborn in the Crypto Metaverse; The tech industry’s deep pockets are wooing governments. There’s a risk of regulatory capture.
Lionel Laurent – Bloomberg
The annual World Economic Forum in Davos once symbolized a certain kind of out-of-touch globalism, mixing politics and high finance. The recent image of Tony Blair and Bill Clinton on stage next to crypto billionaire Sam Bankman-Fried, clad in t-shirt and socks, suggests the torch has been passed. The sight of these centrist elders, famous for their light-touch approach to financial regulation, alongside the latest generation of fintech guru isn’t a case of “crypto going mainstream.” Rather, it demonstrates the kind of acceptance and respectability that only money can buy — and the risks that go with it.
*****Great, more parties I can’t get into, this time my virtual self is not invited.~JJL
What Is Happening to the People Falling for Crypto and NFTs
Farhad Manjoo – NY Times
To understand the latest incarnation of the colossal crypto grifts that continue to engulf the internet, I suppose we should start with all those bored apes, because how could we not? I don’t mean real apes — little of what’s in this column is about stuff you could call in any tangible sense “real.” Instead I’m talking about the collection of digital art known as the Bored Apes Yacht Club. Created about a year ago by a quartet of mysterious, pseudonymous cryptocurrency enthusiasts, Bored Apes is a collection of thousands of “programmatically generated” hypercolor drawings of coolly disheveled primates, the kind you don’t bring home to mama.
*****Wait, this is a scam?~JJL
Vatican announces it will open an NFT gallery to ‘democratise art’
The Holy See has announced plans to issue non-fungible tokens on the blockchain to, allegedly, ‘democratise’ the Vatican’s historic art collection. This was announced right before a conference called the Milken Institute Global Conference in Los Angeles. The project is a collaboration between Sensorium, a VR company, and Humanity 2.0, a Vatican led non-profit.
****** Yes, let’s democratize the scam.~ JJL
‘Sharing my screen cost me £48,000’ – half of investors would miss signs of screen sharing scam as FCA warns of 86% increase
New research from the FCA has found that nearly half (47%) of investors would fail to identify a screen sharing scam, as it reveals an increase of 86% in cases in one year, with 2,014 cases and over £25 million in loses. In one case, a 59-year-old who was persuaded to download remote desktop software to secure an investment, lost over £48,000 while scammers accessed her banking details, her pension, and applied for loans on her behalf.
***** Here is an interesting scam with no NFT involved.~JJL
A Texas Tale of Tinder, Millions in Stolen Crypto and Murder; A 25-year-old Texas woman says a man she met online scammed $8 million left by her murdered father. She’s now suing crypto exchanges.
Francesca Maglione and David Voreacos – Bloomberg
It’s a tale as old as Tinder: Girl meets Boy. Boy convinces Girl to hand over a large chunk of cash. Boy ghosts Girl. Twenty-five-year-old Divya Gadasalli says she never actually met the boy in question, at least not in person. But, in a matter of months, a man she knew online as “Jerry Bulasa” fleeced her of a whopping $8 million left by her father, who was murdered in 2015. That makes “Tinder Swindler” Shimon Hayut, the con man from the Netflix documentary who scammed an estimated $10 million from several women over a number of years, look like an amateur by comparison.
***** This scam has a little of everything.~JJL
Thursday’s Top Three
Our top story Thursday was, not surprisingly, ICE expands in mortgage tech with $13bn deal for Black Knight, from The Financial Times. Second was Bloomberg’s At 78, Investor Preps for ‘Biggest Bear Market in My Life’. Third was Russian TV shows simulation of Britain and Ireland wiped out by a nuke, from The Washington Post.
26,831 pages; 238,416 edits
Commodities Trader ED&F Man in Talks to Sell Brokerage Business; Marex has made an offer for ED&F Man Capital Markets unit; London-based ED&F Man is focusing on its core trading business
Isis Almeida and Mark Burton – Bloomberg
ED&F Man Holdings Ltd. is in talks to sell its brokerage unit as the commodities trader best known for hauling sugar and coffee seeks to turn its business around, according to people familiar with the matter. The London-based trader already has an offer for its ED&F Man Capital Markets unit from rival brokerage Marex Group, said the people, who asked not to be named because the discussions are private. The company has also held talks with Prudential Financial Inc. and no final decision has been made, the people said.
How Russia’s War in Ukraine Is Choking the World’s Supply of Natural Resources
Russia is a commodities powerhouse, producing and exporting huge amounts of materials the world uses to build cars, transport people and goods, make bread and keep the lights on. Its invasion of Ukraine is constraining those crucial supplies—or threatening to—as it becomes increasingly isolated from the global economy, driving up prices in the process. Russia earns more than $1 billion a day exporting its oil and gas, much of which goes to Europe. Its aluminum and nickel end up in drinks cans, cars and electric batteries, while its palladium is needed to curb vehicle emissions. It’s also a giant wheat exporter and a key low-cost shipper of every kind of crop fertilizer.
Wall Street Staggers With ‘Vicious’ $1.3 Trillion Stock Rout; IPOs, expensive software firms, nonprofitable tech all fall; Traders ‘spooked’ by labor costs, productivity decline: Hodge
Vildana Hajric and Ryan Vlastelica – Bloomberg
A day after celebrating the Federal Reserve’s signal that it wouldn’t be making any jumbo-sized moves, traders woke up on Thursday deciding that the central bank will struggle to fight high inflation amid the lingering threat of a recession. In a sharp about-face, investors sold stocks, bonds and cryptocurrencies on Thursday. The S&P 500 Index lost 3.6%, erasing about $1.3 trillion of market value, and the tech-heavy Nasdaq 100 dropped 5.1%, the most since September 2020.
Less than a month until our #DerivativesForum #Frankfurt takes place! Secure your tickets now to join us on site or virtually from 24 to 25 May for keynotes, panels, and networking with speakers and the many participants already registered. Tickets, agenda and further details:
https://bit.ly/3MMHAQ5 We look forward to seeing you there!
Omicron’s Trajectory Shows Challenge of Maintaining Immune Defenses; Protection imparted by shots and recent infections appears to be blunting effect of latest variants, but risks remain
Brianna Abbott and Jon Kamp – WSJ
The Omicron variant and its relations are reinforcing the challenge of maintaining immune defenses against an evolving virus. Much of the U.S. population already had some level of antibodies to the virus when Omicron hit late last year, the Centers for Disease Control and Prevention estimates. That likely shielded many from more-severe disease, but the variant still fueled a record case surge and the second-highest peak in Covid-19 deaths. Immune defenses bolstered by the massive wave appear to be muting the impact of the yet-more-infectious Omicron variants even as cases and hospitalizations increase once again.
Top Nomura Trader’s ‘Car Salesman’ Lies Were Harmless, Jury Is Told; Bank’s sophisticated customers not duped by Im, lawyer says; They’re the ‘scouts who know every measurable trait,’ he says
Chris Dolmetsch – Bloomberg
No one disputes that former Nomura senior trader James Im lied to his customers. The question for the jurors weighing his liability is whether anyone believed and acted on those lies. Im’s lawyer told the jury in his closing argument Thursday that it’s standard industry practice to stretch the truth and that Nomura Holdings Inc.’s clients, as sophisticated investors, weren’t fooled for a minute.
Ukraine War, Inflation and Covid-19 Keep CFOs on Their Toes Over Forecasts; Finance executives are using AI and predictive analytics to make company guidance more reliable even in uncertain times
Nina Trentmann – WSJ
A series of disruptive events for the global economy has rattled the forecasting frameworks that companies use to predict revenue and costs, leading many finance chiefs to adopt tools that allow them to respond to incoming data in real time. Software giant SAP SE is relying more on artificial intelligence and machine learning for its forecasting, Chief Financial Officer Luka Mucic said. “This predictive analytics model has proven to be quite accurate and is giving us pretty good visibility,” he said. The tool can’t foresee black swan events—big, unpredictable occurrences like Russia’s invasion of Ukraine or the outbreak of Covid-19—but it can help determine the impact of such happenings on the company’s finances within a 24- to 48-hour period, Mr. Mucic said.
AQR regains its mojo as Tiger swoons; Two of the hedge fund industry’s biggest players have seen a violent change in fortunes lately.
Robin Wigglesworth – FT
We’ve written a fair bit about the shitco carnage, how it’s infected even Big Tech and the damage it has inflicted on growth stonk jockeys like Cathie Wood and Chase Coleman. But some people are loving it at the moment. Take AQR Capital Management, the investment group led by Captain America fan, former Gene Fama protégé and full-time angry Twitter person Clifford Asness.
DTCC evaluates risks presented by “interconnectedness” in global finance
Bob Currie – Securities Finance Times
DTCC has published a white paper outlining the dangers of interlinkage between systemic risks confronting the global finance industry and the threat of contagion that this “interconnectedness” may present. The paper highlights a series of risks that have become prominent in global financial services and must be under constant scrutiny from risk managers. This includes increased risk of cross-border financial exposures that make countries that are dependent on foreign capital more exposed to systemic shocks. Although by no means a new trend, DTCC indicates that the risk teams must monitor the evolving nature of this threat.
CFTC best-placed to regulate digital assets – Pham; Newly confirmed commissioner says agency has the authority and precedent to police crypto markets
Bernard Goyder – Risk.net
The US Commodity Futures Trading Commission is “absolutely” the right regulator to oversee cryptocurrencies, according to the agency’s newest commissioner, Caroline Pham. Regulators in the US are engaged in a tug-of-war over who should police the market for digital assets. The CFTC already regulates crypto futures and has determined that popular tokens such as Bitcoin, Ether and Litecoin are commodities falling within its jurisdiction.
BitMEX co-founders ordered to pay $10 million each for illegally operating cryptocurrency derivatives platform; The founders have been charged with illegally conducting business with US customers.
Annabel Smith – The Trade
BitMEX co-founders Arthur Hayes, Benjamin Delo and Samuel Reed have been ordered to pay $10 million each in civil monetary penalties by a US District Court for operating the cryptocurrency and derivatives platform illegally. The penalties relate to accusations from October 2020 that found that from at least the end of 2014, the platform’s operating entities and founders conducted business with US customers illegally by unlawfully accepting orders and funds from them to trade cryptocurrencies including derivatives on bitcoin, ether and Litecoin.
HKEX appoints operating co-chiefs to replace retiring president Calvin Tai; The exchange confirmed Tai will step down at the end of May after serving in various roles since 1998.
Annabel Smith – The Trade
HKEX has appointed John Buckley and Wilfred Yiu to replace retiring president and chief operating officer, Calvin Tai, when he steps down at the end of this month. Tai originally joined HKFE in 1998 and during his tenure has served in several roles including as its head of clearing, co-head of equities and FIC division and as head of its trading division
CME Group’s launch of SOFR First for Options receives support from ARRC; New options will help the exchange-traded options market transition away from USD LIBOR ahead of its phase out in mid-2023.
Wesley Bray – The Trade
CME Group’s launch of secured overnight financing rate (SOFR) First for Options, which aim to accelerate the growth of SOFR options trading, has been applauded by the Alternative Reference Rates Committee (ARRC). This initiative falls in line with supervisory guidance and the ARRC’s suggestion to immediately suspend entering into new LIBOR contracts, as well as the SOFR First recommendation given by the Commodity Futures Trading Commission Market Risk Advisory Committee.
LSEG launches in Singapore with NDF Matching venue; NDF and Spot Matching to be launched by LSEG in response to growing demand in Asia and the increasing electronification of FX trading globally.
Chris Lemmon – The Trade
London Stock Exchange Group (LSEG) is to launch a fully-cleared non-deliverable forwards (NDF) Matching venue in Singapore, in response to the strong demand seen in the region. Supported by the Monetary Authority of Singapore (MAS), the roll-out represents the first phase of LSEG’s plans to implement NDF and Spot Matching and streaming relationship venues in Asia.
London Metal Exchange bars Russian lead from its market
Zandi Shabalala – Reuters
The London Metal Exchange (LME) said on Wednesday it had stopped allowing Russian-produced lead into its warehouses following European Union sanctions on the country’s products, effectively shutting Russian lead out of the world’s biggest metals market. Russia is not a major producer of lead, but the decision could add to market jitters about a potential ban on its aluminium and nickel, where its supplies are far more important.
2022 U.S. Markets Choice Award Winners Announced
Markets Media Group’s 10th-anniversary U.S. Markets Choice Awards was held Wednesday, May 4 in NYC. Congratulations to the winners!
Bankers Quit Jobs for Shot at Riches in ‘Wall Street of Crypto’; Binance says it’s recruiting more bankers for its UAE hub; BitOasis CEO says crypto euphoria in nation is here to stay
Ben Bartenstein – Bloomberg
Sign up for our Middle East newsletter and follow us @middleeast for news on the region. In the shadow of Dubai’s sail-shaped Burj Al Arab hotel, crypto executives rubbed shoulders with Emirati royals, Wall Street bankers and Instagram influencers. The festivities in late March were organized by Binance Holdings Ltd. in its de facto home of the United Arab Emirates, which is fast becoming a global hub for digital currencies. Co-founder and Chief Executive Officer Changpeng ‘CZ’ Zhao skipped the event as he recovered from Covid, but he was top of mind for partygoers who said they aspired to replicate his rapid ascent from software developer to one of the world’s wealthiest people.
500 Kilos of Cocaine Found in Coffee Bags at Nespresso Plant; Stash seized by police is worth more than $50 million; Employees found cocaine hidden in shipment from Brazil
Bryce Baschuk – Bloomberg
Employees at a Nespresso factory in a Swiss town discovered more than 500 kilograms of cocaine in bags of coffee beans from Brazil. Nespresso said employees immediately informed the police on Monday after discovering a suspicious substance at its production site in Romont. The cocaine is more than 80% pure and its market value is estimated at more than 50 million francs ($50.6 million), the police said.
The Fed owes the American people some plain-speaking; Chair Jay Powell must acknowledge that free money has made asset prices unsustainably high
Gillian Tett – FT
This week financiers’ eyes have been firmly fixed on the Federal Reserve. No wonder. On Wednesday the US central bank raised rates at the most aggressive pace for 22 years, as Jay Powell, Fed chair, finally acknowledged the obvious: inflation is “much too high”. But as investors parse Powell’s words, they should spare a thought for a central bank on the other side of the world: the Reserve Bank of New Zealand.
Europe’s Quest to Replace Russian Gas Faces Plenty of Hurdles; Climate concerns, investor reticence and political disputes complicate a shift to supplies from the United States, North Africa and the Mediterranean.
Clifford Krauss – NY Times
Russia’s natural-gas supplies have become a tool of leverage in its conflict with Europe over the Russian invasion of Ukraine. And the stakes are high for Europe, which relies on Russia for 40 percent of the gas that warms and lights its homes and businesses. The confrontation also poses a challenge for the world gas market, which has generally endured less price volatility and political manipulation than oil in times of crisis.
Transforming the Cleared Derivatives Markets
MarketInsite – NASDAQ
During a panel at the Arab Federation of Capital Markets Conference in Bahrain in March 2022, Anna Theorin, Head of Clearing Technology at Nasdaq, discussed how technology can help clearinghouses meet collateral management challenges in cleared derivatives while improving operational efficiency. Collateral plays an important role in market liquidity as it mitigates credit and counterparty risk and thereby allows participants to access organized markets and contribute to liquidity. However, collateral is in higher demand than it was a decade ago because of mandatory OTC clearing and the phasing in of the Uncleared Margin Rules, which means firms must post margin on products that were previously not collateralized.
New Bans Force Rich Russians to Drop Favored Investment Vehicle; EU, Switzerland bar them from trusts in latest limits; Move could force rich Russians to transfer assets back home
For wealthy Russians, the race to shield their fortunes from sanctions is reaching another level. The European Union and Switzerland are banning one of their favorite overseas investment vehicles. Starting this month, registering or providing management services to family trusts that have Russian nationals as trustors or beneficiaries will no longer be allowed. At the same time, EU and Swiss citizens won’t be allowed to serve as a trustee, nominee shareholder or director for the trusts that already exist.
Wall Street Influencers Are Making $500,000, Topping Even Bankers; Finance firms have long struggled to reach young and new customers — until now.
Misyrlena Egkolfopoulou – Bloomberg
At first no one could explain why business was picking up at Betterment, a robo adviser aimed at newbie investors. There were about 10,000 signups in one day. Then came the answer: A 25-year-old TikToker from Tennessee was posting videos describing how to retire a millionaire by using the platform. His name is Austin Hankwitz, and he’s managed to land one of the hottest new gigs: full-time “finfluencer.”
Wood and Musk Turn Into Dumb Money on Index Investing; Contrary to the pair’s debate on Twitter, passive investing continues to benefit small investors, not harm them.
Timothy L. O’Brien and Nir Kaissar – Bloomberg
Elon Musk, Marc Andreessen and Cathie Wood have spent the past few days on Twitter exchanging ideas about how investing and financial markets work — all in the name of liberating small-fry investors from elite giants that manage and peddle index funds. Andreessen, a digital innovator who now oversees a venture capital fund, started things off with a critique of managerial bureaucracies and the rise of big institutional investors. He also decried large firms like BlackRock Inc. that advocate investing in companies with robust environmental, social and governance practices by leveraging other people’s money. He also highlighted his fears that BlackRock, Vanguard Group and other dominant firms that specialize in index funds had amassed too much power.
Mifid II London roadshow: Are Europe’s consolidated tape proposals are superior to the UK? Panellists speaking at a panel hosted by The TRADE at the London Stock Exchange were less than excited by the UK’s tape proposal in comparison with that put forward by Europe.
Annabel Smith – The Trade
Regulators in Europe have taken a “pragmatic” approach to implementing a consolidated tape, industry participants told the audience as part of a panel hosted by The TRADE. European regulators set out plans in November last year to implement a single real-time post-trade consolidated tape provider per asset class with mandatory contributions.
Unexplained Attacks Inside Russian Territory Raise Prospect of Wider Conflict; Strikes and explosions—some attributed to Ukrainian forces—have hit infrastructure vital to Moscow’s offensive in eastern Ukraine
Thomas Grove – WSJ
A series of attacks inside Russian territory and unexplained explosions at Russian targets near the border with Ukraine have expanded the scope of the conflict in recent weeks, underscoring Russian vulnerabilities in regions that are crucial to Moscow’s renewed offensive in eastern Ukraine. Russian officials said last month that two Ukrainian Mi-24 helicopters entered Russian airspace flying at low altitudes to evade air defenses and launched a missile attack on a fuel depot in Russia’s Belgorod region, a province that sits on the western edge of the country, less than 20 miles from Ukraine’s war-ravaged city of Kharkiv.
Western sanctions forced Russia to draw down its valuable dollar reserves to pay its debts, US Treasury says
Harry Robertson – Business Insider
Western sanctions have forced Russia to deplete its own reserves of dollars to pay its debts, meaning the money can’t go towards funding its invasion of Ukraine, the US Treasury has said. Russia avoided default at the last minute Tuesday as payments on dollar-denominated bonds started to find their way into investors’ accounts. “Russia has made their debt payment using funds located outside the US or other partner jurisdictions,” a US Treasury official told Insider in a statement.
Fiona Hill Says Putin Sensed West’s Weakness Before Ukraine War; Former Trump aide worries Putin may take ‘one-sided action’; China, India could play key role in ending the war, Hill says
Bill Faries – Bloomberg
The Trump administration’s top adviser on Russia says President Vladimir Putin’s decision to go to war was guided by his sense of weakness in the West as well as his isolation stemming from the Covid-19 pandemic. “He thought the West had lost the plot, that we’d become very weak and distracted,” former National Security Council official Fiona Hill told Bloomberg Quicktake’s Emma Barnett in an interview airing at 8 p.m. New York time on Thursday. “He saw over a long period of time an inability for the West to stand up to its own values and its own principles, particularly when it came to pressure on other countries.”
A race against time in Ukraine as Russia advances, West sends weapons
Liz Sly and Catherine Belton – The Washington Post
A slowly regenerating Russian army is making incremental gains in eastern Ukraine against valiant but underequipped Ukrainian forces. The United States and its allies are racing to deliver the enormous quantities of weaponry the Ukrainians urgently need if they are to hold the Russians at bay. Both sides are fighting furiously, both sides are suffering heavy casualties, and for both sides it has become a race against time. If the Ukrainians can hold out long enough for the new weaponry to arrive, there is a good chance they can not only reverse Russia’s gains but inflict a decisive defeat that could inhibit Russian ambitions in Europe for years, analysts and U.S. and Western officials say.
To Resettle Ukrainian Refugees, U.S. Depends on Kindness of Strangers; Volunteers and private organizations extend a warm welcome, in a potential model for the future
Michelle Hackman and Alicia A. Caldwell – WSJ
Marianna Brucker, a mother of twins from suburban Atlanta, had only a tenuous connection to Ukraine when Russia invaded and began dropping bombs on apartment buildings and hospitals. Her children’s nanny was a recent immigrant from Ukraine, and she relayed daily updates of her friends who were left homeless and suffering.
Exchanges, OTC and Clearing
CME Globex Notices: May 5, 2022
Topics in this issue include: Critical System Updates; Product Launches; Product Changes
EBS Market Integration onto CME Globex
Subject to applicable regulatory approvals, EBS Market’s Central Limit Order Book and eFix Matching Service will launch on CME Globex. You will receive subsequent notices with additional details and actions required to support the EBS Market integration onto CME Globex.
CME STP Notices: May 5, 2022
CME STP; CME STP FIX; CME STP; TRADE VIEW.
Updated Listing Schedule for the Options on Three-Month Eurodollar Futures Contracts
Pending all relevant Commodity Futures Trading Commission (“CFTC”) regulatory review periods, Chicago Mercantile Exchange Inc. (“CME” or “Exchange”) will amend the listing schedule for the Options on Three-Month Eurodollar Futures contracts as noted in Exhibit A below (the “Contracts”).
Euronext launches the OBX® ESG index
The OBX® ESG index is today live and available to index users. The index is a selection of 40 blue-chip companies listed in Norway demonstrating best Environmental, Social and Governance (ESG) practices. 3rd ESG Index alternative for national blue-chip indices, following successful launch of CAC 40 ESG® Index (France), and MIB® ESG Index (Italy).
HKEX President and COO Calvin Tai to Retire
Calvin Tai to retire at the end of May after a long and distinguished career at HKEX Group
John Buckley, Wilfred Yiu to become Co-Chief Operating Officers with effect from 1 June 2022
Main Board and Gem Websites to Be Unified with Effect From 28 May 2022
The Stock Exchange of Hong Kong Limited (the Exchange), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), is pleased to announce that the Main Board and GEM websites will be unified with effect from 28 May 2022, and the Websites Unification Rule Amendments will come into effect on the same day.
Updates on Client Margin in Relation to Derivatives Holiday Trading
Reference is made to the circulars dated 7 April 2022 (Ref: MO/DT/085/22 and LSD/029/2022). For the implementation of derivatives holiday trading arrangement on Hong Kong public holidays 1 (“Derivatives Holiday Trading”) with all MSCI futures and options as the first suite of Derivatives Holiday Trading products (“H Products”) commencing on 9 May 2022, Hong Kong Futures Exchange Limited (“Exchange”) would like to remind and provide further guidance to Exchange Participants (“EPs”) on the minimum requirement of client margin.
File Layout Update Of Lists Of China Connect Securities
With reference to the Exchange Circular (Ref: CT/033/22) dated 22 April 2022 on the inclusion of Exchange Traded Funds (ETFs) in Stock Connect, China Connect Exchange Participants (CCEPs) and Trade-through Exchange Participants (TTEPs) are requested to note that the file layout of lists of China Connect Securities on All Eligible Securities page will be enhanced and the effective date is to be announced together with the inclusion of ETFs in Stock Connect. CCEPs and TTEPs are advised to refer to the sample files of different lists of China Connect Securities with new file layout in the Attachment.
Changes of Designated Securities for Short Selling
Exchange Participants are advised that with effect from 13 May 2022, 31 securities will be added to the list of Designated Securities for short selling while 55 existing Designated Securities will be removed from the list. The securities to be added to and those to be removed from such list are shown in the Attachment for your information. The revised list of all Designated Securities is also available on the Exchange’s website.
New Equity Options Classes
Bourse de Montréal Inc. (the Bourse) and Canadian Derivatives Clearing Corporation (CDCC) hereby inform you that at the opening of trading on Tuesday May 10, 2022, the following new equity options classes will be listed.
MGEX Reports Trading Results for April 2022; Sets Year-to-Date Volume Record
Andy Nybo – MGEX
Minneapolis Grain Exchange (MGEXTM), a Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO), today reported April 2022 trading volume of 245,294 contracts, representing a 23.9% year-over-year (YoY) decrease and a 28.3% decrease from March 2022. Total year-to-date volume reached a record 1,176,385 contracts, an increase of 5.9% from the same period in 2021.
TMX Group Equity Financing Statistics – April 2022
TMX Group today announced its financing activity on Toronto Stock Exchange and TSX Venture Exchange for April 2022.
Refinitiv Launches NDF Matching in Singapore
Colin Lambert – The Full FX
Months of rumours of Refinitiv becoming the first of the primary FX venues to locate in SG1 have been answered with news the firm is locating a new NDF matching venue in the city state. Singapore has been on an aggressive growth strategy seeking to become the primary e-FX location in Asia and has seen multiple major players locate in SG1. NDF Matching, a new fully cleared non-deliverable forwards venue in Singapore, is supported by the Monetary Authority of Singapore (MAS). The impact of the move will be interesting given the imminent re-platforming of EBS, which remains the dominant NDF platform amongst the multi-dealers, however EBS does not have a Singapore presence at this time and NDF matching is planned to be located in London after the migration to CME Globex later this month.
China Orders Government, State Firms to Dump Foreign PCs; Beijing aims to drive foreign PCs out of government, SOEs; Campaign could kick out at least 50 million foreign-made PCs
China has ordered central government agencies and state-backed corporations to replace foreign-branded personal computers with domestic alternatives within two years, marking one of Beijing’s most aggressive efforts so far to eradicate key overseas technology from within its most sensitive organs.
European Tech Giant Shaken by Bullying Claims, Exodus of Women; German software giant has struggled to keep top female talent; SAP says it has a zero-tolerance policy for harassment
Amy Thomson and Giles Turner – Bloomberg
Christian Klein was in his second year as chief executive of SAP SE in January 2021 when he addressed a staff meeting to field questions about the imminent launch of a new push into cloud computing. A staffer took Klein, 42, to task over female representation. “If gender equality and women in leadership is important to SAP, why are there no female speakers?” one employee asked through a moderator, concerning the event planned for the announcement later that month. Klein’s response took the audience aback.
Russia pummelled by pro-Ukrainian hackers following invasion; Cyber attacks lead to ‘avalanche’ of secret data from state-backed groups and private companies
Mehul Srivastava – FT
For years, Dmitriy Sergeyevich Badin sat atop the FBI’s most wanted list. The Russian government-backed hacker has been suspected of cyber attacks on Germany’s Bundestag and the 2016 Olympics, held in Rio de Janeiro. A few weeks into Russia’s invasion of Ukraine, his own personal information — including his email and Facebook accounts and passwords, mobile phone number and even passport details — was leaked online.
How millions of Russians are tearing holes in the Digital Iron Curtain; A tremendous surge in VPN downloads represents a challenge to Putin and his version of the Ukraine war
Anthony Faiola – Washington Post
When Russian authorities blocked hundreds of Internet sites in March, Konstantin decided to act. The 52-year-old company manager in Moscow tore a hole in the Digital Iron Curtain, which had been erected to control the narrative of the Ukraine war, with a tool that lets him surf blocked sites and eyeball taboo news.
Argentina Slams Brake On Crypto, Banning Purchases Through Banks
Ignacio Olivera Doll and Patrick Gillespie – Bloomberg
The monetary authority banned operations that allow bank clients to purchase crypto, just days after two large institutions announced they would let clients buy Bitcoin and other digital currencies. The ban also includes assets whose returns are determined by the fluctuations of cryptocurrencies. Argentines are embracing cryptocurrencies at a quick pace as recurring currency crises and inflation running above 50% annually erodes the value of their savings. The country is among the world’s top 10 with the highest adoption of crypto, according to specialized website Chainalysis.
Luna Foundation Guard Acquires $1.5B in Bitcoin to Reinforce Stablecoin Reserves
Oliver Knight – CoinDesk
The Luna Foundation Guard (LFG) has acquired 37,863 bitcoins as it continues to move toward its target of having $10 billion of stablecoin reserves before the end of the third quarter.
New Traders Face Their First Big Tax Bills After Last Year’s Rally; Those lured into stock trading by 2021’s market surge are learning they now have to pay dues to the taxman.
Claire Ballentine and Emily Graffeo – Bloomberg
Newbie traders are about to find out the downside of massive stock gains: larger-than-usual tax bills. As the April 18 U.S. filing deadline quickly approaches, the hordes of retail investors who funneled cash into last year’s rally are discovering that learning how to trade is one thing, but figuring out the U.S. tax system — and paying your dues — is another beast entirely.
Crypto-Rich Puzzle Over How to Pass On High-Risk Wealth to Heirs; Holders of digital tokens consider options in estate planning; Typical trustees ‘know very little’ about crypto, lawyer says
Jill R Shah – Bloomberg
J.W. Verret has a plan for his heirs to follow when he dies. And it’s unlike anything estate planners could have imagined just a decade ago. That’s because the middle-aged law professor has spent two years building up various crypto holdings. To access that wealth, should he meet an untimely end, his three children may have to go through a 25-page document with details on websites to navigate, special wallets to download, web applications to connect and exchanges to cover.
Saudi Prince Reverses Course on Twitter for ‘New Friend’ Musk; Alwaleed bin Talal Al Saud agrees to roll his $1.9 billion stake into a privatized Twitter.
Devon Pendleton – Bloomberg
It took less than three weeks for Prince Alwaleed bin Talal Al Saud to flip from outraged investor to crucial supporter of Elon Musk’s $44 billion takeover of Twitter Inc. “Great to connect with you my ‘new’ friend @elonmusk,” Alwaleed tweeted Thursday, shortly after a Securities and Exchange Commission filing showed he agreed to roll his entire $1.9 billion stake into a privatized Twitter. When Musk announced his $54.20-per-share offer in April, Alwaleed used the social-media platform to reject the offer, saying it didn’t “come close” to the company’s intrinsic value.
Binance’s warm welcome in France draws stark divide with UK; Crypto exchange’s chief Changpeng Zhao says he met Emmanuel Macron in effort to court French support
Scott Chipolina, Leila Abboud and Joshua Oliver – FT
France has warmly welcomed Binance’s bid to put down roots in one of Europe’s top financial centres, drawing a deep divide with watchdogs in the UK that rejected the crypto giant. Binance this week received a nod from French financial regulators, a move that clears the way for the crypto exchange to establish a significant presence in the G7 nation and could also help unlock access to other jurisdictions across Europe.
Crypto’s evolution adds new risks to potential rewards; Regulators warn retail investors as they enter specialist fields such as borrowing, lending and staking
Eva Szalay – FT
Currency trader Damian Mitchell had more than two decades of City experience under his belt when he received some unsolicited advice from his son. “He said: ‘Dad, come on you’re an FX guy, why aren’t you looking at bitcoin?’ And I said, ‘well it’s not really a credible thing is it?'” 53-year-old Mitchell tells FT Money.
VC Fund Will Invest in NFT Swords and Other Video Game Items; Sfermion is seeking $100 million for investments in nonfungible tokens in games.
Hannah Miller – Bloomberg
Venture capitalists generally invest in startups. A new fund from the Chicago-based firm Sfermion will invest in virtual ice swords. Sfermion is seeking $100 million for the new fund, which it will invest mostly in nonfungible tokens designed for video games, the company plans to announce in June. It has raised roughly a fifth of the total so far.
Chief Justice Says Supreme Court Leak ‘Absolutely Appalling’; Disclosure won’t affect handling of case, John Roberts said; Roberts makes comments at a judicial conference in Atlanta
Greg Farrell and Greg Stohr – Bloomberg
U.S. Chief Justice John Roberts called the leak of a draft Supreme Court abortion opinion this week “absolutely appalling” and said the person responsible would be “foolish” to think the disclosure will affect the court’s handling of the case. Roberts made his remarks Thursday at a judicial conference in Atlanta three days after Politico reported that the court had preliminarily voted to overturn the landmark Roe v. Wade abortion-rights ruling. He’s already asked the Supreme Court marshal, its top security officer, to investigate the leak.
‘Bad things will happen’ if stablecoins are not regulated soon; Top Republican tells FT that Congress should write new rules for fast-growing cryptocurrency
Kiran Stacey and Patrick Jenkins – FT
A senior Republican has sounded the alarm over the fast-growing stablecoin industry, warning “bad things will happen” to investors’ money unless it is regulated soon. Pat Toomey, the top Republican on the Senate banking committee, said he thought Congress should write new rules for the $180bn market in stablecoins, which are some of the most popular cryptocurrencies in the world.
Ken Griffin Gives $25 Million to Illinois GOP Governor Candidate; Griffin has said he’s ‘all in’ to unseat incumbent Pritzker; Battle of billionaires playing out in gubernatorial election
Shruti Singh – Bloomberg
Hedge fund billionaire Ken Griffin has upped his ante in Illinois’s gubernatorial election this year, contributing another $25 million to Republican candidate Richard Irvin, the mayor of the state’s second-largest city. Irvin is trying to unseat Governor J.B. Pritzker, a billionaire Democrat seeking a second term in the November election. Griffin, the founder of Citadel and the richest man in Illinois, in February pledged $20 million to Irvin, the mayor of Aurora, after saying in November that he’s “all in” to back an opponent to beat Pritzker.
Ukraine Latest: G-7 Leaders to Discuss More Russia Sanctions
Group of Seven leaders will discuss potential new sanctions against Russia on Sunday. European Commission President Ursula von der Leyen expressed confidence that the European Union will reach a deal on a Russian oil embargo after proposing to give Hungary, Slovakia and the Czech Republic more time to comply with the proposed ban. Hungarian leader Viktor Orban earlier compared the proposal for a ban by year-end to a “nuclear bomb” being dropped on his nation’s economy.
EU could offer Hungary more time and money to agree to Russia oil ban; Foreign affairs chief Josep Borrell says sanctions proposals must ‘fit with reality’
Sam Fleming and Andy Bounds – FT
The EU is considering providing more time and money to Hungary to adapt to an embargo on Russian oil after talks on Brussels’ plans for sanctions have become “stuck”, the bloc’s foreign affairs chief said.
UK ministers retreat from giving new tech regulator statutory backing; Bill on oversight of likes of Google and Facebook out of Queen’s Speech, with legislation promised ‘in due course’
Jim Pickard and Kate Beioley – FT
UK ministers will not legislate in the next parliamentary session to empower a new technology regulator to police big internet companies such as Facebook and Google, Whitehall officials confirmed on Thursday. The government had been weighing plans to include a bill in the forthcoming Queen’s Speech that would put the digital markets unit based within the UK competition regulator on a statutory footing, but has backed away from legislating.
EU Revises Russia Oil Ban Plan to Give Hungary More Time; Hungary, Slovakia would get until end of 2024 to comply; EU ambassadors meeting Friday to discuss revised package
Alberto Nardelli – Bloomberg
The European Union has proposed a revision to its Russia oil sanctions ban that would grant Hungary and Slovakia an extra year to comply beyond what they had already been offered, giving them until the end of 2024, according to people familiar with the matter.
Plaintiffs in Cusips lawsuit argue the codes aren’t copyrightable; Firms file “aggressive” motion to have legal case resolved early, saying Cusip’s operators and owners have no basis to charge for the codes.
Rebecca Natale – WatersTechnology
In March, WatersTechnology reported that New York-based broker-dealer Dinosaur Financial and Swiss asset manager Swiss Life Investment Management had filed a class-action lawsuit in the Southern District of New York alleging antitrust violations in the licensing of Cusip numbers. This was followed just three days later by another lawsuit with similar complaints, filed in the same court on behalf of Connecticut-based asset manager Hildene Capital Management.
Reminder – TRACE Depository Institution Reporting
As announced by the Board of the Federal Reserve System in the Federal Register on October 28, 2021, FINRA will collect detailed data on depository institutions’ daily transactions of marketable U.S. Treasury securities and of the debt and MBS issued by U.S. federal government agencies including government-sponsored enterprises (agencies) via its Trade Reporting and Compliance Engine (TRACE).
FCA hires ex-Goldman Sachs MD as new-look senior teams take shape; Promotions and a private sector hire will help shape a fresh leadership team in the watchdog’s supervision, policy and competition unit
Justin Cash – Financial News London
The Financial Conduct Authority has hired a former Goldman Sachs managing director as it continues to reshape its senior leadership team. Mel Gunewardena, who was an MD at Goldman and senior MD at Deutsche Bank and State Street before moving to the US Commodities and Futures Trading Commission as chief market intelligence officer, will join the FCA as a senior adviser later this month, according to a 3 May statement.
Chairman Behnam to Keynote at the 20th Annual Symposium Building the Financial System of the 21st Century
Chairman Rostin Behnam will keynote at the 20th Annual Symposium on Building the Financial System of the 21st Century: An Agenda for Europe and the United States
CFTC Commissioner Johnson Announces Initial Staff Appointments
CFTC Commissioner Kristin N. Johnson announced today appointments to her executive staff. Bruce Fekrat will serve as Chief Counsel and Natasha C. Robinson Coates and Lillian A. Cardona will serve as interim Senior Counsel. “I am excited to work with this exceptionally talented team during this transformative moment in the history and development of financial markets,” said Commissioner Johnson. “It is a privilege to benefit from expert counsel with such an extensive depth and breadth of experience in market structure, risk management oversight, and customer protection in the markets for legacy and innovative, emerging asset classes,” she added.
Statement of CFTC Commissioner Pham Regarding Court Orders Entered Against BitMEX Co-Founders
Commodity Futures Trading Commission (CFTC) Commissioner Caroline D. Pham today released the following statement regarding the entry of consent orders by the U.S. District Court for the Southern District of New York against three BitMEX co-founders: Arthur Hayes, Benjamin Delo, and Samuel Reed.
Statement by Commissioner Johnson Regarding Consent Order Imposing $10 million Penalty Against Each Individual Co-founder and Co-owner of BitMEX
Today, the United States District Court for the Southern District of New York (SDNY) entered a Consent Order imposing a $10 million civil monetary penalty in connection with charges against Arthur Hayes, Benjamin Peter Delo, and Samuel Reed, the three individual co-founders and co-owners of BitMEX, totaling $30 million. On August 10, 2021, SDNY ordered BitMEX corporate entities to pay $100 million for illegally operating a cryptocurrency trading platform and anti-money laundering (AML) violations.
Federal Court Orders BitMEX’s Three Co-Founders to Pay a Total of $30 Million for Illegally Operating a Cryptocurrency Derivatives Trading Platform and Anti-Money Laundering Violations
The Commodity Futures Trading Commission today announced the U.S. District Court for the Southern District of New York entered consent orders against the three co-founders of the BitMEX cryptocurrency derivatives trading platform: Arthur Hayes, Benjamin Delo, and Samuel Reed. The three co-founders are required to pay a total of $30 million civil monetary penalty for their actions. The orders require each to pay a $10 million civil monetary penalty, and also enjoin Hayes, Delo, and Reed from further violations of the Commodity Exchange Act (CEA) and CFTC regulations, as charged.
FINRA Fines Wefunder $1.4 Million for Crowdfunding Rule Violations; StartEngine Capital Separately Fined $350,000
Ray Pellecchia – FINRA
FINRA announced today that it has fined two FINRA-registered funding portals a combined $1.75 million for failing to comply with securities laws and rules designed to protect crowdfunding investors. “Funding portals perform an important gatekeeping role for securities that are offered to investors under Regulation CF, the crowdfunding exemption from securities registration,” said Jessica Hopper, Executive Vice President and Head of FINRA’s Department of Enforcement. “Today’s actions highlight FINRA’s vigilance over this developing area of securities regulation and our unrelenting focus on investor protection.”
Investing and Trading
Bond Turmoil Threatens to Erupt Anew With Inflation Haunting Fed
Liz Capo McCormick and Michael MacKenzie – Bloomberg
But in pouring cold water on the prospect for a jumbo-sized 75 basis point rate hike next month, he may have inadvertently set the stage for more turbulence going forward if inflationary pressures increase. Treasuries reversed some of the post-Fed gains on Thursday before trading steady. The Fed was “trying to send a message of sustained expectations for 50 basis point increases,” but “unintentionally gave a very dovish message,” Jeffrey Rosenberg, senior portfolio manager for systematic multi-strategy at BlackRock Inc., said on Bloomberg Television. That caused an “easing of financial conditions, at least for today.”
Vicious Stock Reversal Is Symptom of the Fed’s Feedback Problem; Risk assets plunge after biggest post-Fed rally in a decade; ‘Sell the rally’ given Fed focus on financial conditions: Ren
Katherine Greifeld and Vildana Hajric – Bloomberg
Question for market experts: When U.S. stocks staged their biggest rally in two years Wednesday after the Federal Reserve enacted its first half-point rate hike since 2000, was Jerome Powell happy or sad? And what about today, when the entirety of that advance went poof in 90 minutes? Only he knows, but the question goes to the heart of a puzzle that is likely to dog markets for weeks and months to come. How does the motion of markets affect the state of financial conditions, the cross-asset measure of stress that in Powell’s words is the channel via which monetary policy “reaches the real economy?”
Creative Carry Traders Turn to Low-Yield Asian Currency Funders; Taiwan, Singapore dollars seen as good funding sources; BNP Paribas Asset favors the shekel to fund carry trades
Lilian Karunungan and Marcus Wong – Bloomberg
Traders are getting creative in their pick of currencies to fund carry trades as conventional choices such as the dollar, euro and yen lose their luster. Goldman Sachs Group Inc. and RBC Capital Markets are highlighting low-yielding Asian currencies such as the Taiwan dollar and South Korean won as increasingly attractive funding sources for emerging-market carry traders. SPI Asset Management is also going with the Taiwan dollar, while BNP Paribas Asset Management is turning to the Israeli shekel.
Used Tesla, Audi Prices Plunge in Sign of Hong Kong Expat Exodus; Owners in Hong Kong are having to offer steep discounts or abandon their vehicles as excess supply drives down resale values.
Alice Kantor and Venus Feng – Bloomberg
If you’re wondering about the best place in the world to buy a car right now, just look at Hong Kong. Even as second-hand vehicle prices break records in the U.S. and other countries, people in Hong Kong are struggling to offload their cars as a surge of residents move out of the city after two years of punishing Covid restrictions.
Carvana Father-Son Duo Is Down $25 Billion, Leading Wealth Rout; Used-car retailer is caught in selloff of star pandemic stocks; Company’s leaders hit by 87% slump in shares since August peak
Scott Carpenter – Bloomberg
Nine months ago, the father-son duo that runs used-car company Carvana Co. had a combined personal fortune of more than $32 billion. Ernie Garcia II and Ernie Garcia III have now shed almost 80% of that wealth, one of the biggest and fastest declines of any billionaire family or individual fortune, according to the Bloomberg Billionaires Index.
Environmental, Social and Corporate Governance
ESG Debt Sales Hit Eight-Month Low as Volatility Deters Issuers; Rising rates, macro and geopolitical risk stilfe debt sales; Green, sustainability, sustainability-linked bond sales fall
David Caleb Mutua – Bloomberg
Global sustainable debt sales fell to an eight-month low in April as borrowers in U.S. and Europe postponed deals amid worries about rising rates, the economy and geopolitics. Sales of green, social, sustainability, sustainability-linked bonds, loans and munis fell to about $70 billion in April, data compiled by Bloomberg show. That’s the lowest since August 2021, when companies and governments issued about $67 billion of ESG debt.
Congo Plans Oil Bonds to Refinance Glencore, Trafigura Loans; Country has hired Deutsche Bank, Citi to structure the deal; Congo owes about $2 billion to commercial creditors: IMF
Priscila Azevedo Rocha and Baudelaire Mieu – Bloomberg
The Republic of Congo plans to issue Eurobonds linked to oil warrants to refinance its outstanding debts to commodity traders Glencore Plc and Trafigura Group, according to people familiar with the plans. The deal, expected to launch later this month, is structured as a “debt-neutral” transaction, meaning it will be solely used to refinance about $1.4 billion of the oil traders’ loans and won’t impact the nation’s debt load, the people said, asking not to be identified because the matter isn’t public. Citigroup Inc. and Deutsche Bank AG are structuring the bond, while financial advisory firm Rothschild & Co. is working with the government, they said.
MSIM’s baffling $400m options splurge; Funds owned or advised by the manager have spent vast sums on a USD/CNH strategy that appears not to have paid off
Ben St. Clair – Risk.net
At first glance, the Growth Portfolio mutual fund offered by Morgan Stanley Investment Management seems fairly straightforward, holding a selection of tech-heavy US stocks like Cloudflare, Doordash and Snowflake. But over the past five years, the nearly $10 billion-asset fund has also spent $150 million on something seemingly unrelated – a string of options to buy US dollar against the renminbi, which would only pay off if the Chinese currency collapsed in value.
Many VC Firms Ban Side Investing. Yuri Milner’s DST Encourages It; Partners at DST Global maintain at least two funds they use to make personal investments in startups.
Ivan Levingston and Sarah McBride – Bloomberg
Many venture capital firms frown upon or even bar their partners from using their own money to make side investments in startups. At DST Global, the investment group run by the Russian-Israeli billionaire Yuri Milner, personal investing is institutionalized. A prevailing philosophy in venture capital is that allowing partners to broker personal investments can put their interests at odds with those of the firm. An investor might choose to bid up the valuation of a startup he holds using his employer’s money, in turn increasing his paper wealth.
Goldman Launches $900 Million Junk Bond for Spanish Football; Deal backs CVC’s investment in national football league LaLiga; Notes split in two tranches, expected to receive BB rating
Laura Benitez and Irene Garcia Perez – Bloomberg
Banks led by Goldman Sachs Group Inc. launched a 850 million euro ($896 million) high-yield bond to back CVC Capital Partners’ investment in Spain’s national football league, in the first deal of its kind for the sport in Europe. CVC will invest a total of 2 billion euros in LaLiga via an entity that will manage the broadcasting revenues of one of Europe’s top football competitions. The league’s football clubs will give up 8% of their broadcast rights for 50 years in exchange. It’s the first deal in European football to let an investor buy a stake in a business linked to a league rather than one or more clubs.
‘I Put Faith in These Guys’: Vanguard Clients Decry Tax Debacle; Investor says he got hit with $30,000 surprise bill and thousands of others may have seen impact after firm made change to target-date funds.
Annie Massa and Claire Ballentine – Bloomberg
He pores over IRS Publication 17, a guide for individual filers, with the zeal of a certified public accountant, and he meticulously calculates how much money to set aside each April. But this year came with a stinging surprise — a tax bill roughly $30,000 more than he anticipated. That’s because Quinn, an independent contractor from New Jersey, owned two Vanguard Group retirement funds that racked up massive capital gains — an increase of more than 2,000% from the prior year — that fell almost entirely on the shoulders of unsuspecting individual investors.
Uranium ETF launches follow frenetic fund activity in the sector; After starting to stockpile uranium, Sprott has expanded into equity, buying URNM, and joining Global X by launching an ETF in Europe
Emma Boyde – FT
The launch of the first two European-listed uranium exchange traded funds, coming hot on the heels of a $1bn US uranium ETF acquisition, are the latest indicators of what has been a flurry of fund activity in nuclear fuel investment. But despite the huge speculative interest, especially from investors in an investment trust that is less than a year old, industry observers warn there are no guarantees that last year’s strong performance will be repeated — even with a looming European energy crisis sparked by the Ukraine war.
Macquarie profits hit record on market volatility and M&A boom; Market chaos leads to bumper earnings but Australian bank warns of uncertain year ahead
James Fernyhough – FT
Australia’s biggest investment bank Macquarie Group has benefited from global commodity market volatility and record dealmaking that drove full-year net profit up 56 per cent from the previous year to a record A$4.7bn ($3.3bn). But chief executive Shemara Wikramanayake warned on Friday that Macquarie’s commodities income was expected to fall in what was likely to be a “very uncertain” current financial year.
£7.1bn withdrawn from UK investment funds so far in 2022; Fears over inflation and interest rates add to retail investors’ fears
Stefan Wagstyl – FT
UK retail investors have rushed to withdraw money from investment funds this year, with net outflows in the first three months hitting £7.1bn, the highest level since the fourth quarter of 2018. The pace of the withdrawal accelerated rapidly over the three-month period, as concerns about inflation and rising interest rates were compounded by the impact of the Ukraine war, according to data released on Thursday by the Investment Association, the fund industry group.
America Is Starting to See What COVID Immunity Really Looks Like; With time and effort, we can build enough protection to blunt surges—but herd immunity remains out of reach.
Katherine J. Wu – The Atlantic
I, as far as I can tell, have not yet been infected by the virus that causes COVID-19. Which, by official counts, makes me an oddball among Americans. Granted, I could be wrong. I’ve never had a known exposure or symptoms, but contact tracing in the United States is crummy and plenty of infections are silent. I’ve taken many coronavirus tests, but not that many coronavirus tests, and it’s always possible that some of their results missed the mark.
J&J’s Covid Shot Restricted by FDA on Rare Clotting Disorder; Shot has been used most in low-income countries, remote areas; Pfizer and Moderna produce the shot of choice, see wider use
Riley Griffin – Bloomberg
Johnson & Johnson’s Covid-19 vaccine was limited to use only in U.S. adults for whom other shots aren’t appropriate after an investigation of rare and potentially deadly clotting disorder that occurs in some recipients. The Food and Drug Administration limited the use of the vaccine to people 18 and older for whom other shots aren’t accessible or clinically appropriate, and those who would otherwise not get immunized against the virus. J&J’s single-shot vaccine has been noted for its convenience compared to two-shot vaccines, especially in remote areas and in populations like the homeless who may be difficult to give repeat immunizations.
India Can’t Afford Its Coal Addiction; Despite plentiful reserves, power plants can’t keep up with demand during the country’s blistering heat wave. It’s time to accelerate the switch to renewables.
Mihir Sharma – Bloomberg
Nothing makes you appreciate air-conditioning like high summer in India. Here in Delhi, temperatures are running over 100 degrees for much of the day, with two full months still to go before the cooling monsoon rains arrive. Unfortunately, just as everyone decided to crank up their ACs or at least their ceiling fans, electricity supply collapsed under the strain in large parts of the country.
King Dollar Returns With a Vengeance to Crush Emerging Markets; Thai baht, Korean won, Taiwan dollar lead declines in Asia; King dollar still has more to gain in coming months: NAB says
Ruth Carson – Bloomberg
The dollar is powering ahead against almost all its major peers, buoyed by higher Treasury yields and a selloff in stocks that is turbo-charging demand for the world’s reserve currency. Bloomberg’s gauge of the greenback gained for second day, approaching a two-year high set last month as investors seek shelter amid concern Federal Reserve interest-rate hikes will send the global economy into recession. Asian currencies were the biggest losers Friday, with the Taiwan dollar, South Korean won and the Chinese yuan all dropping at least 0.5%.
Many Japan, German Firms Still Shut Despite Shanghai’s Promises; Almost two-thirds of Japanese factories yet to resume output; Shanghai government says production is getting back on track
The majority of Japanese factories in Shanghai are yet to resume any production and many German firms are still closed as well, with the city’s lockdown still damaging business activity even as the local government claims that production is getting back on track. Almost two-thirds of Japanese factories haven’t resumed any production yet, while another 28% are running at less than 30% capacity, according to the results of a survey of Japanese firms in the city. None of the 54 companies with factories in Shanghai are back to planned levels of output, and only 37% of firms had permission to resume output.
China Credit Contagion Turns Strong Developers Into Risky Bets; China Credit Tracker
Rebecca Choong Wilkins and Ailing Tan – Bloomberg
Credit stress among China’s developers is spilling over to some of the nation’s stronger builders, leaving investors with even fewer places to hide. Distress in the nation’s $870 billion offshore debt market remained elevated during February, Bloomberg’s China Credit Tracker shows. Returns on dollar bonds remain close to their lowest level in nearly two years. While the significantly larger onshore market showed signs of stabilizing, risks are magnifying as maturities on local bonds swell to 1 trillion yuan ($158 billion) this month.
ACER publishes its Final Assessment of the EU Wholesale Electricity Market Design
The EU Agency for the Cooperation of Energy Regulators (ACER) has published today its Final Assessment of the EU Wholesale Electricity Market Design.
Exclusive-Germany begins filling western Europe’s biggest gas storage site
Vera Eckert, Christoph Steitz and Tom Käckenhoff – Reuters
Germany has started filling the huge Rehden gas storage facility abandoned by Russia’s Gazprom, the site’s state-appointed manager said on Thursday, as Europe’s biggest economy looks to guard against the risk of Moscow turning off supplies. Russian gas is vital to Europe and Germany in particular. But supplies have been thrown into doubt by Western sanctions over Moscow’s invasion of Ukraine and a looming deadline set by Russia for payments in roubles, which most buyers have rejected.
Germany Pledges Energy Solidarity in Bid to Cut Russian Oil
Michael Nienaber and Peter Laca – Bloomberg
Europe’s largest economy is pushing ahead with plans to substitute Russian oil and build up infrastructure to import liquefied natural gas, Scholz told reporters after talks with Czech Prime Minister Petr Fiala in Berlin. “If we take this step, we must also show our solidarity and readiness to help those countries that don’t have direct access to the Northern Sea or the Baltic Sea,” Scholz said, adding that he had offered support on energy to the Czech Republic.
Germany Charters LNG Hubs from Uniper, RWE to Reduce Dependency on Russia
Giulia Petroni – MarketWatch
Uniper SE said Germany is chartering two floating storage and regasification units to import gas as it aims to strengthen security of gas supply and reduce dependency on Russian gas, following a similar announcement by RWE AG on Thursday.
Germany energy company Uniper said the units, also known as FSRUs and managed by shipping company Dynagas, have a total natural gas-send-out capacity of up to 7.5 billion cubic meters a year and a liquefied natural gas storage capacity of 174,000 cubic meters each. The combined capacity is equivalent to around 30% of the gas Germany imports from Russia.
Austria is years away from cutting off Russian natural gas and must face ‘uncomfortable truths,’ top energy official says
Brian Evans – Business Insider
Austria’s top energy official acknowledged the country is years away from severing its connection to Russian natural gas and that amassing an emergency reserve would most likely include Russian supplies. Russia’s war on Ukraine has pushed Austria to face several “uncomfortable truths,” one of which being the difficulty associated with seeking gas supplies from other markets, said Energy Minister Leonore Gewessler, according to Bloomberg.
Xi Jinping’s renewed commitment to zero-Covid rattles markets in China; Tech stocks and renminbi slip as Beijing refuses to change course despite economic pain
Jennifer Creery and Hudson Lockett and Edward White – FT
Xi Jinping has reaffirmed his commitment to China’s controversial zero-Covid strategy, warning against “any slackening” in the effort and vowing to crack down on criticism of the policy despite signs of damage to the economy. The comments were published by state media after a meeting on Thursday of the Communist party’s politburo standing committee, the country’s most influential political body that is chaired by the president.
The horrific bird flu that has wiped out 36 million chickens and turkeys, explained; Bird flu currently poses little threat to humans, but it’s hell for the birds.
Kenny Torrella – Vox
The final month of Minnesota Timberwolves basketball was livelier than ever this season, and not just because they nearly upset the Memphis Grizzlies in their first-round playoff series. During one game in mid-April, a woman glued her hand to the court. A few days later, another woman chained herself to the goal post. The following week, a third woman, dressed as a referee, stormed the court before removing her jacket, exposing a shirt underneath that read “Glen Taylor roasts animals alive.”
A Startup Found a Lifeline for Newspapers That Isn’t Advertising or Subscriptions; Column helps publications digitize government disclosures, a critical remaining source of revenue.
Sarah McBride – Bloomberg
Without public notices, the Mercury, a 138-year-old newspaper in Manhattan, Kan., would have lost money in 2021. Instead, it eked out a tiny profit. The state-mandated publication of zoning changes, foreclosures, government bidding processes, and the like by newspapers has become crucial for the industry amid falling circulation and ad sales moving elsewhere. But that lifeline is under threat, and the Mercury is playing an important role in the fight to hold on to the business. The paper is testing Column, a service that helps publications digitize notices to run them on their websites as well as in print so they can head off political efforts to move the disclosures to government sites. The Mercury is also funding the startup, which was founded by Jake Seaton, 27, whose great-great-grandfather bought the paper in 1915 and whose father, Ned Seaton, is now publisher.
A $63 Million Piece of Southampton Estate ‘La Dune’ Is Bankrupt; Estate tied to art publisher and philanthropist Louise Blouin; Property wrapped up in multi-year mortgage fight, filings show
Jeremy Hill – Bloomberg
A beachfront home in Southampton, New York, appraised at $63 million — half of an estate marketed as “La Dune” — recently landed in bankruptcy court just days before a foreclosure auction, court papers show. The house at 366 Gin Lane is wrapped up in foreclosure proceedings stemming from an unpaid $26 million mortgage that has ballooned to about $40 million since 2019, according to Suffolk County Court records. The house is adjacent to another, larger waterfront mansion that is also in default. Both homes are controlled by once-ascendant art publisher and philanthropist Louise Blouin, bankruptcy court papers show.