Hits & Takes
John Lothian & JLN Staff
The Associated Press is reporting that Bernie Madoff of Ponzi scheme infamy has died in federal prison, apparently of natural causes. He was 82.
Today we published a video interview with Scott Knudsen, which was shot as part of The Path to Electronic Trading series, but which we decided to break out into its own video. Knudsen joined IMC, then called Holland House Trading, after graduating from the University of Illinois. We will release his video for The Path to Electronic Trading later today. This video is about his experience with cryptocurrency and his decision to build Cove Markets, a platform designed to trade multiple crypto marketplaces on one screen and get the best execution available. It is a timely video given all the attention on today’s Coinbase direct listing, but more dumb luck than brilliant planning.
Also later today we will post a video interview we did with Brendan Bradley about the new “ESG Investing for Dummies” book he just published.
The 2021 Annual Threat Assessment of the U.S. Intelligence Community report is out from the Office of the Director of National Intelligence. Some highlights from the foreword:
- Ecological and climate changes, for example, are connected to public health risks, humanitarian concerns, social and political instability, and geopolitical rivalry.
- China increasingly is a near-peer competitor, challenging the United States in multiple arenas—especially economically, militarily and technologically—and is pushing to change global norms.
- Emerging and disruptive technologies, as well as the proliferation and permeation of technology in all aspects of our lives, pose unique challenges. Cyber capabilities, to illustrate, are demonstrably intertwined with threats to our infrastructure and to the foreign malign influence threats against our democracy.
To summarize, climate change is bad, China is a rival and disruptive technology can be used by bad guys.
Bob Pisani of CNBC reported that “the Senate is likely to confirm Gary Gensler as the new chairman of the Securities and Exchange Commission either Wednesday or later this week.”
The ICAPCharityDay for 2021 is taking place on Thursday, December 9, 2021. You can visit @ICAPCharityDay on Instagram and Twitter to see success stories from some of the amazing charities they have supported.
The JLN MarketsWiki Education GoFundMe campaign had a donation from Yuriy Shterk yesterday. Yuriy is a longtime JLN reader and has worked for a couple of JLN sponsors, CQG and Fidessa. He is currently the chief product officer for Allvue Systems, formed from the merger of Black Mountain & AltaReturn. Allvue is a provider of investment management solutions for fund managers, investors and administrators in the alternative investments industry. Thank you to Yuriy and to all who have given and all who have yet to give. His donation will be matched by Trading Technologies. Support our efforts to preserve industry history by giving to our GoFundMe campaign.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
Scott Knudsen – The Path to Electronic Trading Led to a Best Execution Platform For Bitcoin
John Lothian News interviewed Scott Knudsen, the founder of Cove Markets and a former longtime executive with IMC, for The Path to Electronic Trading video series, but we broke off this part of the interview into a stand-alone video.
2021 Annual Threat Assessment of the U.S. Intelligence Community
Office of the Director of National Intelligence
Director of National Intelligence Avril Haines, in coordination with Intelligence Community leaders, released to Congress an unclassified annual report of worldwide threats to the national security of the United States. Pursuant to Section 617 of the Intelligence Authorization Act for Fiscal Year 2021, the annual assessment examines the diverse array of threats that exist against the backdrop of the COVID-19 pandemic, great power competition, and rapidly evolving technology.
*****Many of the risks they outline are risks for the market too.~JJL
How Amsterdam Recovered From a Deadly Outbreak — in 1665; Following an epidemic of bubonic plague that wiped out 10% of the population, Amsterdam’s economy quickly rebounded, a new study shows.
Feargus O’Sullivan – Bloomberg
For two years in the mid-1600s, Amsterdam experienced a shock that may now seem familiar. The city was ravaged by a deadly epidemic of bubonic plague. As graveyards in poorer districts started to fill, the wealthy scattered to their country houses, while those that remained did their best to keep healthy through social distancing. Sick people were banned from markets, inns and churches, while infected houses warned off visitors with a sign hung outside — a bunch of straw tied with three bands. These measures may have helped, but they weren’t enough to stop the plague. By the time the epidemic petered out in 1665, the disease had claimed 24,000 Amsterdammers — around 10% of the population.
*****The good news is we have been dealing with pandemics a long time and are still around. We had some ideas on what to do before we knew the science of it all.~JJL
Hungry for Investors, Some Companies Woo the Little Guy; Small investors are becoming a force in the stock market, and company executives are beginning to take notice.
Matt Phillips – NY Times
After CarParts.com reported its quarterly results last month, executives at the company, which sells replacement auto parts, did what many of their ilk do: They held a conference call with Wall Street analysts, fielding questions about inventory levels, profit margins and corporate strategy.
*****Win the hearts of the little guy, the beginning of the investment food chain.~JJL
Bank of England: Andy Haldane to Become Chief Executive of The Royal Society For Arts, Manufactures And Commerce
Andy Haldane, Chief Economist and member of the Monetary Policy Committee, is leaving the Bank of England to become Chief Executive of the Royal Society for Arts, Manufactures and Commerce (RSA).
*****This is a loss for the markets. Haldane was a great thought leader. It is a win for the Royal Society though.~JJL
Bitcoin Power Consumption Jumped 66-Fold Since 2015, Citi Says
Josh Saul – Bloomberg
Annualized consumption likely reached 143 terawatt-hours; Bitcoin mining could soon face more regulatory scrutiny
Bitcoin mining is consuming 66 times more electricity than it did back in late 2015, and the carbon emissions associated with it will likely face increasing scrutiny, according to a Citigroup Inc. report. As of mid-April, global power demand by the Bitcoin network probably reached an annualized 143 terawatt-hours, about 4% higher than Argentina’s total electricity generation in 2019, the report said, citing numbers from the Cambridge University Center for Alternative Finance.
*****At least gold just sits there and you need to protect it. Protection prices don’t go up 66-fold.~JJL
Tuesday’s Top Three
The top-read story on Tuesday was a controversial piece published by Medium and written by John Ramsay, IEX chief market policy officer, How Do You Measure a Fill? Nasdaq Attacks with a Dull Knife. The second most-read was a Yahoo Finance piece that also was in the Top Three on Monday, JPMorgan CEO Jamie Dimon outlines ‘serious weaknesses’ of virtual work. And third was Thom Thompson’s JLN History of Financial Futures video interview with Richard Sandor, Richard Sandor Makes History With Financial Futures – John Lothian News.
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|CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.Recently Updated Pages
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Crypto Exchanges Usher in Era of Round-the-Clock Stock Trading
Brandon Kochkodin – Bloomberg
Binance unveiled Tesla token on Monday for non-U.S. users
Multiple cryptocurrency exchanges now offer access to equities
The era of round-the-clock stock trading is here, if you know where to look. Binance on Monday began allowing its non-U.S. based users to trade a tokenized version of Tesla Inc. stock, joining a growing list of cryptocurrency exchanges that are setting their sights on the world of traditional finance.
Coinbase Listing Throws Spotlight on Nasdaq Amid Bitcoin Boom
Crystal Tse and Katie Roof – Bloomberg
Nasdaq hosts first big direct listing for Coinbase Wednesday; Bitcoin hit all-time high this week, climbing above $63,000
Nasdaq Inc., an exchange that has never hosted a major direct listing, is about test its hand on the most valuable company to go public using one. Coinbase Global Inc., the largest U.S. cryptocurrency exchange, is set to debut on Wednesday through a direct listing, an alternative to a traditional initial public offering that has only been deployed a handful of times. While Slack Technologies Inc., Palantir Technologies Inc. and most recently Roblox Corp. all listed on the New York Stock Exchange, Coinbase picked the younger bourse known for tech-oriented companies.
Bernie Madoff of Ponzi Scheme Infamy Has Died in Federal Prison: AP
Michael Balsamo – AP
Bernie Madoff, the financier who pleaded guilty to orchestrating the largest Ponzi scheme in history, died in a federal prison early Wednesday, a person familiar with the matter told The Associated Press. Madoff died at the Federal Medical Center in Butner, North Carolina, apparently from natural causes, the person said. The person was not authorized to speak publicly and spoke to the AP on the condition of anonymity.
IRS Chief Says $1 Trillion in Taxes May Go Uncollected Each Year; Charles Rettig tells lawmakers more resources are needed to detect fraud, errors
John McCormick – WSJ
As much as $1 trillion a year in federal taxes may be going unpaid because of errors, fraud and lack of resources to enforce collections adequately, Internal Revenue Service Commissioner Charles Rettig told lawmakers Tuesday.
Black Americans Are Embracing Stocks and Bitcoin to Make Up for Stolen Time; Investing influencers who are attracting audiences on the Clubhouse app say bold steps need to be taken to close the wealth gap.
Akayla Gardner – Bloomberg
In the real world and increasingly online, they are pushing their followers to take bolder steps to create wealth. This includes investing in stocks and even cryptocurrencies. Part of their argument is that Black Americans need to make big moves to make up for stolen time. For over a century after emancipation, institutional policies ranging from Jim Crow segregation to modern-day redlining have disenfranchised Black people from building generational wealth. Today, Black Americans hold just 3.8% of $116 trillion in wealth in the U.S., according to data from the Federal Reserve.
Chinese Students Pay Agents $12,000 for Shot at Wall Street
Career firms hire bankers to give students inside track; Global firms warn of risks in paying for shot at internships
Getting a shot at a coveted investment banking or finance job is a cutthroat, and sometimes controversial, business in China. Career consulting firms have mushroomed in recent years, enlisting what they say are thousands of finance professionals to help open doors to students who can afford it. Firms are charging $12,000 or more to help students land internships and eventually jobs at Wall Street powerhouses such as Goldman Sachs Group Inc. and Citigroup Inc.
Coinbase CEO to Take Crypto Exchange Public After Bringing Bitcoin to Masses; As trading starts Wednesday in the company’s shares, Brian Armstrong works to make bitcoin as easy as email
Paul Vigna – WSJ
Brian Armstrong is poised to become one of the richest people in the world after Coinbase Global Inc. goes public Wednesday. Coinbase, co-founded by Mr. Armstrong in 2012, runs the largest bitcoin exchange in the U.S. and is set to become the first major cryptocurrency-focused company to go public in the country. It is expected to fetch a valuation of between $65 billion and $100 billion, which could make Mr. Armstrong’s 20% stake worth up to $20 billion.
‘Fear of Missing Out’ Will Drive Workers Back Into the Office; Working from home leaves them bereft of “useful updates, critical intel, and key connections,” writes Gensler co-CEO Andy Cohen.
Peter Coy – Bloomberg
Imagine the rest of your team has gone back into the office post-Covid-19 but you’re still at home, avoiding that long commute and enjoying the sweatpants life. Just one problem. When you Zoom in, you see your colleagues laughing at jokes you didn’t hear, remarking on gossip you missed, comparing notes on projects you weren’t aware of. You feel FOMO—fear of missing out. This is what will drive you to suit up and get back to your old desk, at least for a couple days a week, says Andy Cohen, co-chief executive officer of Gensler, the world’s largest architecture firm by revenue. “The person who’s home says, ‘They’re meeting after the meeting. I’ve got to be there,'” Cohen says in a joint interview April 12 (via Zoom) with his colleague, co-CEO Diane Hoskins.
Coinbase Reference Price for Listing Is Set at $250 by Nasdaq
Crystal Tse and Katie Roof – Bloomberg
The Nasdaq set a reference price of $250 for the direct listing of Coinbase Global Inc., the cryptocurrency exchange that will start trading Wednesday via a direct listing. The exchange disclosed the price in a statement Tuesday.
Chinese Hedge Fund Jumps 258% After Dumping Ray Dalio’s Strategy
Shanghai Banxia’s Li says Dalio approach is unsuited to China; Shift to embrace leverage helped tiny macro fund top rankings
Shanghai hedge fund manager Li Bei says she learned quickly that the low-volatility approach to investing behind the rise of Bridgewater Associates was doomed in China for a startup like hers. Steady returns did little to draw investors used to short-term rewards, so she put in her own money, cranked up leverage and produced an industry-leading 258% gain last year.
China’s digital currency is a threat to dollar dominance; Beijing’s ambitions could spur acceptance of renminbi as main rival to US currency
Michael Hasenstab – FT
Markets have been gripped by cryptocurrency fever. The price of bitcoin has attained new highs while debate has raged over the emergence of cryptocurrency technology. But these may be a sideshow for a big developing trend — the rapid digitalisation of the renminbi.
Bernie Madoff, infamous Ponzi schemer, dead at 82
Bruce Golding and Rebecca Rosenberg – The New York Post
Bernie Madoff, whose $65 billion Ponzi scheme made him one of the world’s most-hated criminals and destroyed even his own family, has died at the secure federal medical center in Butner, North Carolina, where he was serving a 150-year prison sentence, according to a report Wednesday.
Credit Suisse Problems Go Right to the Top; It’s encouraging that Thomas Gottstein is holding the Swiss bank’s managers accountable, but the board’s record over the past 18 months has been dismal.
Elisa Martinuzzi – Bloomberg
Scarred by damaging blowups in every one of its key businesses, Credit Suisse Group AG has cleaned out its top management ranks. Gone are several executives — including the risk chief — who had responsibility for fiascos such as the supply-chain funds linked to now bankrupt Greensill Capital and the ruinous stock gambles by Bill Hwang’s Archegos.
FTSE Russell awaits pivotal GPIF decision on flagship bond index; Japan’s institutions are big investors in the WGBI but are concerned about Chinese onshore bonds inclusion
Rebecca Feng – FT
Japan’s Government Pension Investment Fund said it would decide in the coming months whether to continue to invest via the FTSE Russell’s flagship bond index, a resolution that could affect billions in assets tracking the index.
JPMorgan Profit Soars After Bank Releases Reserves for Bad Loans; The bank a year ago set aside billions of dollars for potentially bad loans to prepare for the coronavirus pandemic
Orla McCaffrey – WSJ
JPMorgan Chase JPM -1.19% & Co. said Wednesday that first-quarter profit nearly quintupled, after the bank released $5.2 billion it had set aside to cover soured loans. The bank posted a profit of $14.3 billion, or $4.50 per share, well above the $3.10 per share forecast by analysts polled by FactSet. A year earlier, JPMorgan reported a quarterly profit of $2.87 billion, or $0.78 a share.
Goldman Sachs Profit Rises Sharply on Strong Trading, Dealmaking; Bank’s first-quarter results benefit from turbocharged market and economic recovery
Peter Rudegeair – WSJ
Goldman Sachs Group Inc. GS -1.25% reported sharply higher profits for the first quarter, benefiting from a turbocharged market and an economic recovery. Goldman posted a quarterly profit of $6.84 billion, or $18.60 a share, on revenue of $17.7 billion. Both measures were up significantly from a year ago—when the bank posted profit of $1.2 billion on revenue of $8.7 billion—and exceeded the expectations of analysts polled by FactSet, who forecast profit of $10.22 a share on revenue of $12.56 billion.
Wells Fargo Earnings Jump as Economy Bounces Back; San Francisco-based lender posts first-quarter profit of $4.74 billion, up from $653 million a year earlier
Ben Eisen – WSJ
Wells Fargo WFC -2.40% & Co. said earnings soared in the first three months of the year. The San Francisco-based lender on Wednesday posted a profit of $4.74 billion for the first quarter, up from $653 million a year earlier. A year ago, Wells Fargo and other big banks set aside billions of dollars to prepare for a coronavirus recession, hammering their profits at the time.
Benchmark Strategies Forum Asia Pacific
Most LIBOR settings are almost certain to cease to exist after the end of 2021, although the most popular US dollar settings are expected to continue until mid-2023. This ISDA Virtual Conference will explore regulatory expectations on new LIBOR use across Asia and describe the upcoming milestones for transition. The event will also set out the steps that Asian firms need to take to shift to alternative reference rates and the implications for their legacy portfolios.
J&J Blood-Clot Pause Done to Educate Doctors, Monitor Cases
Riley Griffin, John Lauerman, and Angelica LaVito – Bloomberg
Pause could end in ‘a matter of days,’ FDA’s Woodcock says; Officials knew it could cause hit to vaccine confidence
U.S. health officials urged a pause on the use of Johnson & Johnson’s Covid-19 vaccine due to dangerous blood-clotting to give them time to educate doctors on how to treat the exceedingly rare disorder and to “look in all the nooks and crannies” for other cases. That’s the message from Peter Marks, a top official at the U.S. Food and Drug Administration, after six women between the ages of 18 and 48 developed severe blood clots in the brain days after getting the one-shot vaccine and federal officials called for a temporary halt in its use. J&J decided to delay rollout of the immunization in Europe and pause all of its Covid-19 vaccine trials.
Moderna Says Covid Shot Remains 90% Effective After Six Months
Robert Langreth – Bloomberg
Results echo long-term data from Pfizer-BioNTech vaccine; Shot is more than 95% effective against severe Covid cases
Moderna Inc.’s coronavirus vaccine remained more than 90% effective after six months, according to a new analysis of data from the company’s final-stage trial. Beginning two weeks after the second dose, the shot was more than 90% effective overall, and more than 95% effective at preventing severe cases, according to a statement. The company didn’t release further details and said the follow-up results were preliminary as the study is continuing.
Are China’s Covid Shots Less Effective? Experts Size Up Sinovac
China CDC chief fueled concern by noting their lower efficacy; Experts decode Sinovac’s varying rates, how to improve them
The lower protection rates of China’s Covid-19 vaccines have raised concerns about shots that are key to inoculation rollouts from Brazil to Indonesia, especially after their efficacy was questioned by one of the most senior Chinese health officials. Bloomberg spoke to two experts about the vaccines, zeroing in on the Sinovac Biotech Ltd. shot, which has been the focus of a crisis in confidence after it posted efficacy levels of just above 50% in a final stage trial in Brazil — the minimum required by leading global drug regulators. Other Chinese immunizations have delivered rates between 66% to 79%, still far below the shots developed by Pfizer Inc., Moderna Inc. and even Russia’s Sputnik vaccine that have logged protection rates of more than 90%.
Pfizer, BioNTech On Track to Beat Second-Quarter EU Vaccine Goal
Naomi Kresge and Fergal O’Brien – Bloomberg
Pfizer Inc. and BioNTech SE expect to deliver more Covid-19 vaccines to the European Union this quarter than currently targeted, offering good news to the bloc after deliveries of Johnson & Johnson’s shot were paused. The U.S. drugmaker said it’s “on track to significantly exceed established commitments” by the end of June. The EU is expecting some 200 million doses from Pfizer and BioNTech, up from about 66 million in the first three months of the year.
Here Comes the Fourth Wave (Or Not); Although there’s disagreement about whether Covid is making a comeback, it’s a good time to focus the message on what is known — and unknown — about risks.
Faye Flam – Bloomberg
So are we having a fourth wave of the Covid-19 pandemic in the U.S. or not? University of Minnesota’s Michael Osterholm has forecast a Covid “category 5 hurricane” this spring. To some people, a look at hard-hit Michigan could justify this level of alarm. But Paul Offit of the Children’s Hospital of Philadelphia could also claim to be right with his much more optimistic view that vaccines will mostly tame the pandemic from this point forward. After all, U.S. death rates and hospitalizations are not spiking and may never return to anything close to the fall/winter peak.
J&J vaccine pause threatens to dent public confidence, warn experts; Recommendation to halt use of one-dose jab in US risks stoking hesitancy towards other shots
Kiran Stacey and Nikou Asgari – FT
The decision by US health agencies to recommend a pause in the use of Johnson & Johnson’s Covid-19 vaccine threatens to damage public confidence in all coronavirus jabs even if it is quickly reversed, experts have warned.
Why we shouldn’t worry about Covid vaccine blood clots; ‘For the entire winter wave, a single day’s delay to being vaccinated has been riskier than the vaccine itself’
Tim Harford – FT
Wrinkles and grey hairs notwithstanding, I must be younger than I had assumed. Sixty percent of the adult population of the UK have been vaccinated with at least one dose, but your columnist is not old enough to be one of them. Who knew? This means I still have the joys of a jab ahead of me, and I can’t wait for the sweet superpower of immunity. All the available vaccines in the UK are hugely effective at preventing severe illness, and they increasingly look as though they greatly reduce transmission too.
Surge testing launched in south London for variant outbreak; Forty-four cases are confirmed of the strain first detected in South Africa
Anna Gross, John Burn-Murdoch and Jasmine Cameron-Chileshe – FT
Health authorities in the UK have stepped up the battle against possible vaccine-resistant variants of coronavirus as lockdown restrictions are eased across the country and the immunisation programme moves into a new phase.
India seeks vaccine boost with Russian jab deal as Covid cases soar; Experts warn Sputnik V production will not alleviate shortages as most doses destined for export
Amy Kazmin, Jyotsna Singh and Stephanie Findlay and Henry Foy – FT
Prime Minister Narendra Modi’s government touted India as “the pharmacy of the world” not long ago as it exported more than 60m locally made doses of the Oxford/AstraZeneca coronavirus jab globally. But with ailing Covid-19 patients overwhelming hospitals in Mumbai, New Delhi and other big cities, the government is scrambling to secure more vaccines for domestic use.
Bounty of Serbian vaccine diplomacy shames the EU; Belgrade’s purchase of Chinese, Russian and western jabs also recalls non-aligned movement’s golden days
Valerie Hopkins – FT
In a socialist-era concrete hall by the Sava river, Serbia is changing its international reputation one jab after another, and showing that vaccine diplomacy is not just the preserve of global powers.
Desert Control lists on Euronext Growth; NOK 205 MILLION RAISED – MARKET CAPITALISATION OF NOK 475 MILLION
Euronext today congratulates Desert Control on its listing on Euronext Growth Oslo (ticker code: DSRT). Desert Control is a climate technology company specialised in reclaiming degraded soil and turning desert sand into fertile soil.
‘A tsunami of cases’: desperation as Covid second wave batters India; Doctors speak of a new variant of the virus that appears to be spreading faster than ever before
Hannah Ellis-Petersen – The Guardian
Dr K Senthil had feared it was coming. He had feared it as he saw the reckless crush of hundreds of people taking part in large wedding parties over the past months, feared it as he saw the maskless faces of shoppers at the market, feared it as he witnessed thousands come together for political rallies in the ongoing elections in the Indian state of Tamil Nadu, where he is the president of the state medical council.
Exchanges, OTC and Clearing
Nasdaq Sets Reference Price for Coinbase Listing at $250; The cryptocurrency exchange would have valuation of about $65 billion
Paul Vigna – WSJ
Nasdaq set the reference price for the highly anticipated public listing of Coinbase Global Inc. at $250, which would give the cryptocurrency exchange a valuation of about $65 billion. That valuation would be a significant increase over the $8 billion at which Coinbase was last valued in a 2018 fundraising round.
EuroCCP reshuffles senior team after Cboe acquisition; Changes to the management team at EuroCCP have been made as it transitions into a multi-asset clearinghouse to support Cboe’s new European derivatives business.
Hayley McDowell – The Trade
EuroCCP has made several changes to the senior management team following Cboe Global Markets’ acquisition of the pan-European equity clearinghouse. The changes to the senior team aim to position the firm as it transitions into a multi-asset clearinghouse.
HKEX appoints former SWIFT capital markets strategy head to key post-trade role; New hire at HKEX comes at a crucial time for the exchange group as it looks to implement and roll out several key post-trade initiatives.
Joe Parsons – The Trade
Hong Kong Exchanges and Clearing has hired the former head of capital markets strategy at SWIFT to lead its post-trade innovation initiatives. Lisa O’Connor has been appointed head of post-trade change, where she will be working across HKEX’s clearing and settlement system initiatives, helping it to leverage new technology to expand its post-trade services.
Deutsche Börse expands crypto offering on Xetra with the first Litecoin ETN from ETC Group; Easy access to the performance of Litecoin / product with physical collateral / central clearing reduces processing risks
Deutsche Börse is expanding its range of cryptocurrency products: As of today, an Exchange Traded Note (ETN) on Litecoin can be traded for the first time via Xetra and the Frankfurt Stock Exchange. The product is issued by the ETC Group. The LTCetc – ETC Group Physical Litecoin ETP enables investors to participate in the performance of the crypto currency Litecoin for the first time on Xetra without having to set up crypto wallets. The ETN physically secured with Litecoin has been admitted to the regulated market of the Frankfurt Stock Exchange and is cleared centrally via Eurex Clearing. As a result, investors benefit from significantly reduced risks when processing stock exchange transactions.
Exchange’s Disciplinary Action against China Tangshang Holdings Limited (Stock Code: 674) and its executive directors
Hong Kong Exchanges and Clearing Limited
The Listing Committee of The Stock Exchange of Hong Kong Limited
CENSURES: (1) China Tangshang Holdings Limited (Stock Code: 674);(2) Mr Zhou Hou Jie, executive director of the Company;
Product Modification Summary: Expansion of SPAN Settlement DPL for E-mini Crude Oil Futures Contract – Effective May 03, 2021
Effective Sunday, May 9, 2021 for trade date Monday, May 10, 2021, and pending all relevant CFTC regulatory review periods, please be advised that the New York Mercantile Exchange, Inc. (NYMEX or EXCHANGE) will amend the SPANP STLMT DPL for E-mini Crude Oil Futures.
Initial Listing of the USD Malaysian Crude Palm Oil Day 15th Bullet Futures USD Malaysian Crude Palm Oil Day 10th Financial Options Contracts
Effective Sunday, May 2, 2021, for trade date Monday, May 3, 2021, and pending all relevant CFTC regulatory review periods, Chicago Mercantile Exchange Inc. (“CME” or “Exchange”) will list the USD Malaysian Crude Palm Oil Day 15th Bullet Futures and USD Malaysian Crude Palm Oil Day 10th Financial Options contracts (the “Contracts”) for trading on the CME Globex electronic platform (“CME Globex”) and for submission for clearing via CME ClearPort as more specifically described below
Deutsche Börse Capital Markets Academy Uses LiveX Trading Simulation Developed By Goethe University
Various German and international stock exchanges use it and numerous top European universities also use it: we are talking about the LiveX stock market simulation, unique in Europe, which was developed by business informatics experts at Goethe University Frankfurt and which can now also claim Deutsche Börse as a user. At the Capital Markets Academy, Deutsche Börse’s training provider, participants in the certificate course “Exchange Trader Cash Market” can now apply their acquired knowledge directly in the very realistic stock exchange simulation LiveX.
Nyse launches ‘First Trade’ NFTs
The New York Stock Exchange is joining the NFT craze, launching a series of collectibles that commemorate the first time six major companies were traded publicly.
China’s Tech Giants Vow, in Unison, to Play by Regulator’s Rules; Days after a record fine against Alibaba, China’s tech companies have pledged to adhere to antimonopoly regulations
Stephanie Yang – WSJ
Nearly three dozen of China’s largest technology companies have made public pledges to comply with the country’s antimonopoly laws, as they scramble to fall in line following Beijing’s moves to rein in the business empire of Jack Ma, the country’s best-known entrepreneur.
CloudMargin appoints Lombard Risk executive to oversee platform development; Helen Nicol joins CloudMargin as head of product after 14 years as global product director for Lombard Risk.
Annabel Smith – The Trade
Collateral management services provider CloudMargin has appointed Helen Nicol as its new senior vice president and head of product. Based in London, Nicol will be responsible for overseeing the development of the CloudMargin platform, as the FinTech firm looks to significantly scale its business.
***The press release from CloudMargin is here.
Former CFTC chairman Giancarlo joins Baton Systems as senior advisor; Chris Giancarlo joins Baton Systems as senior advisor after serving for five years as chairman and commissioner at the CFTC.
Annabel Smith – The Trade
Post-trade and blockchain technology provider Baton Systems has appointed the former chairman of the US derivatives watchdog as a senior advisor. Christopher Giancarlo joins Baton Systems in the role where he will support the firm’s post-trade payments and settlements growth strategy.
Tradeweb teams up with Amazon Web Services to expand access to closing price data; Collaboration with Amazon Web Services will broaden access to Tradeweb’s US treasury and UK gilt closing price data through the AWS Data Exchange cloud platform.
Annabel Smith – The Trade
Fixed income platform provider Tradeweb has partnered with Amazon Web Services (AWS) to expand access to its closing price data for US treasuries and UK gilts. Through the partnership, Tradeweb ICE US treasury closing prices and FTSE UK gilt closing prices can now be accessed directly through the AWS Data Exchange cloud platform through a monthly subscription to data published daily or as historical data sets.
Epic Games, the maker of Fortnite, raises $1 billion in a funding round.
Kellen Browning – NY Times
Epic Games, the video game developer that produced the hit game Fortnite, said Tuesday that it had raised $1 billion in funding, valuing the company at $28.7 billion. Sony, the creator of the PlayStation game console, invested $200 million, Epic said, and Appaloosa Management, Baillie Gifford and Fidelity Management were also among the investors.
How JPMorgan plans to boost wealth management and battle fintech competition
JPMorgan is the biggest bank in the US and a bellwether for the global financial system. So when the firm’s senior-most leaders talk, Wall Street pays attention. The bank is set to report first-quarter earnings on Wednesday, April 14. Earlier this month, CEO Jamie Dimon published his annual shareholder letter.
Coinbase listing set to capitalise on crypto bull run; Debut of bitcoin exchange will be ‘Rorschach test’ for investors’ belief in cryptocurrency
Miles Kruppa – FT
Coinbase became a dominant company by winning the trust of cryptocurrency novices. Next comes the stock market. When the nine-year-old start-up lists on the Nasdaq exchange on Wednesday, it will become the first major cryptocurrency company to go public in the US, a milestone that has generated excitement in an already buoyant market for digital assets.
Coinbase Gifts 100 Shares Each to 1,700 Employees Ahead of Public Listing; With COIN stock opening at $250 per share, it amounts to a $25,000 thank-you note to all Coinbase staffers.
Sebastian Sinclair – Coindesk
U.S. cryptocurrency platform Coinbase has gifted shares to its employees ahead of Wednesday’s hotly anticipated direct listing on the Nasdaq stock exchange.
Coinbase’s Reference Share Price for Trading to Commence Is $250
Nate DiCamillo – Coindesk
Goldman Sachs and Nasdaq have decided Coinbase stock should start trading at $250 per share. That’s a valuation of $66.5 billion, assuming an estimated 266.2 million shares outstanding. The reference price is discovered using public financial information along with market sentiment and is usually a conservative estimate. This figure came is 27% lower than what Coinbase last traded at in the private secondary market, $343.58 per share.
NFT Fans Want to Crack the Da Vinci Code; But will the current crop of digital art files survive as long as the Mona Lisa?
Lionel Laurent – Bloomberg
The art world has seen a lot of crazy in the past decade. With trophy assets booming in a low-rate world that drives demand for safe havens, only the clubby world of the super-rich and the brand power of Leonardo da Vinci could turn a $1,000 art-auction bet into the $450 million “Salvator Mundi.” The digital art world now represents a slice of that excess. Hyped-up cryptocurrency-fueled collectibles, known as non-fungible tokens, are in gold-rush territory: More than $2 billion in NFTs have changed hands in the first three months of 2021, according to NonFungible.com. Bored, wealthy millennials are all too eager to flash their cash online.
NYC Real Estate Mogul Secures $6 Billion in Gold to Back New Cryptocurrency; Kent Swig became interested in cryptocurrencies after learning more about the concept from his teenage son.
Devon Pendleton – Bloomberg
New York City real estate mogul Kent Swig has secured a minimum of $6 billion in gold reserves to back his new cryptocurrency. The value of the digital token, DIGau, will be pegged to the market price of the precious metal, guaranteed by liens Swig and partner Stephen Braverman’s company, Dignity Gold, secured against mining claims in Nevada and Arizona. “Gold was one of the original rock-solid backings of all currencies,” Swig, 60, said in an interview. “We’re not reinventing the wheel here. What we’re doing is applying the world’s stable backing of a lot of things to a very advanced technology.”
Macau Moves Step Closer to Digital Currency in Threat to Casinos
Junkets have expressed concern move could doom industry; Casinos are only slowly rebounding from pandemic slump
Macau has moved a step closer to the potential introduction of a digital currency as it seeks to better combat money laundering and tax evasion in the world’s biggest gambling hub. The government plans to amend laws to regulate the issuance of a virtual legal tender, Chief Executive Ho Iat Seng told lawmakers Tuesday. The government will work with China’s central bank to “study the feasibility of issuing a digital currency,” he said.
First Bitcoin ETF in North America Hits $1 Billion in Assets
Claire Ballentine – Bloomberg
Purpose fund in Canada reaches milestone in seven weeks; Demand for Bitcoin ETFs rages as U.S. issuers seek approvals
Less than two months after launching, the first North American Bitcoin ETF already reached $1 billion (C$1.25 billion) in assets, according to a statement from its issuer. The product from Toronto-based Purpose Investments, ticker BTCC, has seen massive interest as investors clamor for crypto exposure, especially in an exchange-traded fund wrapper. Although Europe has several crypto funds that effectively work like an ETF, this is the first anywhere to carry the ETF label.
Binance to list Coinbase stock token today
Yogita Khatri – The Block
Crypto exchange Binance is set to list rival Coinbase’s stock token today. The listing will take place at a UTC time after Coinbase goes public on Nasdaq. The specific time isn’t known yet. The listing will allow Binance users to trade Coinbase stock in fractions. Binance started trading in tokenized stocks earlier this week, beginning with Tesla. At the time, the exchange said it would list more stock tokens based on market demand. The Tesla stock token has seen a trading volume of $6.7 million within three days of its listing on Binance. Binance’s stock tokens are priced and settled in BUSD, meaning users can buy and redeem them via the exchange’s stablecoin.
Tax Cheats Cost the U.S. Far More Than Previously Thought—And Cryptocurrency Is Part Of the Problem, IRS Commissioner Says
Andrew Keshner – Barron’s
The Internal Revenue Service could be missing out on collecting approximately $1 trillion every year from taxpayers who are not paying their full tab, Charles Rettig, the tax collector agency’s commissioner, said Tuesday. “It would not be outlandish to believe that the actual tax gap could approach and possibly exceed $1 trillion dollars,” Rettig told members of the Senate Finance Committee. “We do get out-gunned. There’s no other way to say it,” he later added. The $1 trillion number was “shocking,” said Sen. Ben Cardin, a Democrat from Maryland.
SEC commissioner Hester Peirce unveils updated version of ‘safe harbor’ proposal for crypto tokens
Michael McSweeney – The Block
Hester Peirce, the crypto-friendly commissioner at the Securities and Exchange Commission (SEC), has formally unveiled an updated version of her proposed regulatory safe harbor for token sales. In a public statement, Peirce said that the proposal “seeks to provide network developers with a three-year grace period within which, under certain conditions, they can facilitate participation in and the development of a functional or decentralized network, exempted from the registration provisions of the federal securities laws.” The updated version comes more than a year after Peirce originally put forward a proposed three-year safe harbor period for token sales, as previously reported. The update was also published on GitHub.
Why Binance Coin Hit All-Time High (and $86B Valuation) Ahead of Coinbase Listing
Muyao Shen – Coindesk
Why wait for the Coinbase listing of its shares on the Nasdaq? There’s already a way – in cryptocurrency markets – to bet on the world’s biggest cryptocurrency exchange. It’s a digital token linked to the success of Binance, which boasts a higher spot trading volume than Coinbase, according to the data site CoinGecko. The token, binance coin (BNB), has surged 14-fold in price this year, for a market value of $86 billion. Some cryptocurrency investors see BNB as a way to get excess return over a simple purchase of bitcoin, whose doubling in price this year looks almost paltry by comparison, Joshua Frank, co-founder and CEO of crypto data firm The TIE, told CoinDesk in an interview.
Dogecoin price soars to record high amid latest crypto frenzy
Noah Manskar – NY Post
Dogecoin has the internet howling yet again. The cult coin nearly doubled its value in less than a day amid a new wave of investor enthusiasm for cryptocurrencies. Dogecoin exploded to a new all-time high of about 14.5 cents early Wednesday morning, hours after roaring above the 10-cent mark for the first time, according to CoinDesk.
African fintechs collaborate to interlink mobile money and digital assets
Finextra (press release)
The Seychelles-based Securities, Commodities and Derivatives Exchange (SECDEX), and KOINON, the global Digital Coin and Token based payment platform, are pleased to announce a collaboration to foster the intersection of African B2C and B2B payments and dynamic asset conversion between fiat currencies, cryptocurrencies and a broader range of digital assets.
This initiative comes at a key time in the mobile payments industry growth as evidenced by Mastercard’s recent $100million investment in Africa’s Airtel which focuses on mobile payments and financial inclusion.
Denmark to Gradually Reopen Borders for Some Countries in May
Morten Buttler – Bloomberg
Denmark will gradually reopen its borders to some countries next month when older Danes are expected to have gotten at least one Covid vaccination shot, the government said on Tuesday evening. Denmark will be open to vaccinated citizens from European countries as of May 1, the government said. Residents who haven’t gotten a shot but come from European countries with low contamination rates will be able to enter Denmark from May 14. Travelers must provide a recent negative test and isolate upon arrival, unless they have been vaccinated.
Joe Biden’s oil clean-up plan slammed as bailout for fossil fuels; Critics say $16bn provision in infrastructure package spurs drillers to shirk obligations
Myles McCormick – FT
Joe Biden’s plan to plug tens of thousands of abandoned oil wells across the US risks rewarding fossil fuel operators who shirk their clean-up responsibilities and hooking the industry on taxpayer bailouts, critics say.
Political polarisation hampers Spain’s pandemic response; Prime minister Sánchez at odds with Madrid regional chief over lockdowns and vaccine policy
Daniel Dombey – FT
The candidate issued a heartfelt plea. “Please stop using this for political ends,” Edmundo Bal said, as he denounced left and right alike for sowing “chaos and confusion” over Spain’s coronavirus strategy. Bal has political motivations of his own — his centrist Ciudadanos party is facing meltdown in a high-profile election in Madrid. But his charge that politicisation is undermining Spain’s health policy — that politics is contaminating what should be a matter of science — is a powerful one.
Big Oil’s Influence Shrinks as Tax Perks Face Axe in Biden Plan; Cutting the fossil-fuel industry’s tax perks might not dramatically affect hydrocarbon output or the environment, but it will mark the end of an era for Big Oil
Jinjoo Lee – WSJ
It doesn’t take long before a typical conversation with a U.S. energy executive turns to subsidies—those enjoyed by others. The fossil-fuel industry often brings up green energy’s explicit tax incentives, while the latter will point to the longevity of special tax preferences for oil and gas. President Biden’s tax plan proposes to extend tax credits for renewable energy while ending tax benefits for fossil fuels. Oil-and-gas lobbyists could soon find themselves in the awkward position of denying that any special treatment for those companies exists, while digging in their heels to protect that treatment. And while the impact on actual hydrocarbon production could be limited, such a move would mark the end of an era for an industry that has held much influence over the past century.
The C.E.O.s Who Didn’t Sign a Big Defense of Voting Rights; Hundreds of leaders and companies signed a letter opposing strict limits. They did not.
Andrew Ross Sorkin, Jason Karaian, Sarah Kessler, Michael J. de la Merced, Lauren Hirsch and Ephrat Livni – NY Times
Amazon, BlackRock, Google, Warren Buffett and hundreds of other companies and executives have signed a new statement opposing “any discriminatory legislation” that would make it harder for people to vote. The statement, which ran as a two-page ad in The Times, comes amid a flurry of voting-related proposals from Republicans that have generated competing calls for corporations to take a stand and to stay out of politics lest lawmakers retaliate, David Gelles and Andrew Ross Sorkin write in The Times. And just as notable as the names who signed the statement are those that didn’t.
Republicans are in a messy divorce with big business. Democrats could benefit
Andrew Gawthorpe – The Guardian
As corporations flee the Republican Party, liberals should welcome them into the Democratic coalition – with conditions
One of the central facts of modern American politics has been the strong bond between the Republican party and the country’s business elite. Even Donald Trump, who briefly campaigned as an economic populist in 2016, governed like the plutocrat he was. Businesses could rely on Republicans for the regressive tax cuts and supply-side economics that helped their bottom lines – and the personal bank accounts of their executives. Democrats, meanwhile, have drifted to the left economically, embracing much higher taxes and a new era of trust-busting. If Republicans are the capitalists, then Democrats are the socialists.
Swiss Watchdog Says Lessons Must Be Drawn From Archegos Collapse
Nicholas Comfort and Birgit Jennen – Bloomberg
Switzerland’s top financial regulator said the collapse of Archegos Capital Management LP will have consequences for how banks deal with risk as one of the country’s biggest lenders counts its losses from exposure to the investment firm. “The detailed lessons will doubtless be drawn, that has to be the case,” Mark Branson, the head of Swiss regulator Finma, said Wednesday, without referring to any banks by name.
Retail clients continue to lose out due to high investment products costs
The European Securities and Markets Authority (ESMA), the EU securities regulator, today publishes its third annual statistical report on the cost and performance of European Union (EU) retail investment products. In the report ESMA finds that the costs of investing in key financial products, such as UCITS funds, retail alternative funds, and structured investment products (SRPs) remain high and diminish the investment outcome for final investors.
ESMA updates its LEI Statement
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has published today an updated statement on the implementation of LEI requirements for third-country issuers under the SFTR reporting regime.
FINRA FINAL Production Reminder
Effective Monday, April 19, 2021, FINRA will replace digital certificates with Multi Factor Authentication (MFA) for access to the TRAQS website and will also institute system infrastructure changes for TRAQS and the API reference data software. Beginning April 19, 2021, all TRAQS users will be required to use MFA to gain access to TRAQS and will be denied access to TRAQS if they have not converted.
Margin Balance Reporting: Frequently Asked Questions under FINRA Rule 4521(d)
FINRA Rule 4521(d) provides that, unless otherwise permitted by FINRA in writing, each member carrying margin accounts for customers is required to submit, on a settlement date basis, as of the last business day of the month:
Financial Stability Board publishes Peer Review of UK remuneration regime
We have published a joint statement with the PRA welcoming the Financial Stability Board’s (FSB) Peer Review of the UK’s remuneration regime.
Investing and Trading
EU Lays Out $1 Trillion Debt Plan to Challenge Treasuries
John Ainger and Alberto Nardelli – Bloomberg
Bloc aims to begin selling bonds under recovery plan by July; Green bond standard due by early summer, Commission says
The European Union set out its blueprint to raise nearly $1 trillion of debt over five years as it seeks to fund its recovery from the coronavirus pandemic. The bloc is aiming to issue the first debt under its NextGenerationEU stimulus as early as July and will use a “state of the art” platform to begin selling bonds and bills via a network of primary bank dealers by September, according to the bloc’s executive branch. Almost a third of the roughly 800 billion euros ($957 billion) will be in green bonds, using a framework of rules to be published in early summer, with issuance as early as the fall.
Fed Is More Worried by Inflation Running Too Cold Than Too Hot
Craig Torres and Liz McCormick – Bloomberg
Long miss on inflation target raises doubts on new strategy; Fed officials worry that disinflationary forces still at work
Federal Reserve officials are just as worried about an inflation rate that runs too cold as one that runs too hot. While rising prices are in the spotlight now as the economy reopens and demand surges, the longer-run trends that have suppressed costs globally could re-emerge as the pandemic ends, some policy makers warn. That would make it harder to deliver on their new strategy of running inflation above their 2% target for a time in order to achieve that goal over the longer run.
Rubber Scarcity Creates New Headache for Beleaguered Automakers; As supply chain challenges pile up, U.S. manufacturers are having a hard time finding the key material for tires.
Gabrielle Coppola and Randy Thanthong-Knight – Bloomberg
Automakers struggling with pandemic-induced plant shutdowns and a global chip shortage are now confronting another supply chain headache: dwindling rubber supplies. Snarled shipping lines are disrupting the movement of natural rubber, a key material used in tires as well as components under the hood. With the global supply already running short following stockpiling by China and a devastating leaf disease, rubber prices are on the rise and some U.S. auto suppliers are rushing to secure shipments before the market gets squeezed further.
‘Wolf of Wall Street’ Jordan Belfort has investing advice for the Reddit crowd
Alexandra Steigrad – NY Post
Jordan Belfort, the infamous stockbroker who inspired the hit 2013 film “The Wolf of Wall Street,” is hosting a new documentary for the Discovery+ streaming service about the wild rise and fall of GameStop’s stock. Discovery took notice when Belfort weighed in as the GameStop saga unfolded, telling news outlets that the “little guy” can “play the same game” as the Wall Street overlords. He also posted a video to YouTube in which he reenacted a scene from Martin Scorsese’s Oscar-nominated “Wolf of Wall Street,” which was based on his 2007 memoir of the same name.
Big SPAC Deals Don’t Need Big SPACs; Also SPAC warrants, MicroStrategy’s strategy and NYSE NFTs.
Matt Levine – Bloomberg
One thing about the biggest SPAC deal ever is that it doesn’t involve a particularly big SPAC. Grab Holdings Inc., the Southeast Asian tech unicorn, is merging with Altimeter Growth Corp., a U.S.-listed special purpose acquisition company. The deal gives Grab about a $40 billion equity value, and Grab will raise $4.5 billion. That is sort of in the normal zone for companies going public: In a typical initial public offering, a company might sell 10% to 20% of itself to new investors; here the number is about 11%.
Environmental, Social and Corporate Governance
Executives Call for Deep Emission Cuts to Combat Climate Change; More than 300 corporate leaders will ask the Biden administration to nearly double the emission reduction targets set by the Obama administration.
Lisa Friedman – NY Times
More than 300 businesses, including Google, McDonalds and Walmart, are pushing the Biden administration to nearly double the United States’ target for cuts to planet-warming emissions ahead of an April 22 global summit on climate change.
Climate Change Threatens Russia With Billions in Annual Costs; From Siberian wildfires to flooding in the Far East, the full economic damage caused by more frequent natural disasters is yet unknown
Dina Khrennikova and Olga Tanas – Bloomberg
The residents of Irkutsk, one of Russia’s coldest regions, are used to harsh winters. But when the temperature dropped to negative 60 degrees Celsius (-76 Fahrenheit) last January, even they had to submit to the elements. “Please stay at home unless absolutely necessary,” Governor Igor Kobzev pleaded on Instagram.
BlackRock’s Record-Breaking ESG Fund Looks Just Like a Big Tech ETF; The Carbon Transition fund’s largest holdings are Apple, Microsoft, Amazon.com, Alphabet and Facebook.
Claire Ballentine – Bloomberg
As the biggest launch in the history of ETFs, it’s a ringing endorsement of all things ESG. But beyond its billion-dollar debut, BlackRock Inc.’s new fund might feel awfully familiar to most investors. The top holdings in the U.S. Carbon Transition Readiness ETF (ticker LCTU) — which lured about $1.25 billion in its first day on Thursday — turn out to be Apple Inc., Microsoft Corp., Amazon.com Inc., Alphabet Inc. and Facebook Inc.
Banks in Norway Offered Free Climate-Risk Tool by Government
Frances Schwartzkopff – Bloomberg
Financial institutions in Norway are being offered help from the government to measure the climate risk in investment portfolios. “The finance industry has a key role in steering investments in the right direction,” Climate Minister Sveinung Rotevatn said in a statement on Wednesday. “Good assessments of climate risks are important for both the private and public sector.”
Big Companies Line Up to Crush Green Transparency Resolutions; As proxy season starts, investors will be voting on at least 20 separate proposals calling for more climate disclosure.
Tim Quinson – Bloomberg
With the annual proxy season about to kick off, corporate executives are encountering increasing investor scrutiny about their environmental policies. But rather than support green initiatives or even compromise with shareholders, some of the world’s biggest companies instead plan to crush efforts to slow the climate catastrophe.
Cows Join Carbon Market in Quest to Curb Planet-Warming Burps; Livestock that produce less methane have joined trees, wind turbines and cleaner cookstoves as the basis for carbon offsets
Agnieszka de Sousa – Bloomberg
A European startup has started selling carbon credits for cattle raised on a feed supplement that reduces the amount of heat-trapping greenhouse gas they release. Mootral, based in Switzerland and the U.K., says its garlic-and-citrus feed can cut methane emissions from livestock by an average of 30%. Under its offset program, a certified farmer that’s produced milk using Mootral’s supplement can sell credits equal to one ton of carbon dioxide to customers that want to offset their pollution.
Schwab Accidentally Puts $1.2 Million Into Customer’s Fidelity Account
Chris Dolmetsch – Bloomberg
It’s not quite the nearly $1 billion blunder that Citigroup Inc. made last summer, but Charles Schwab Corp. said it accidentally sent more than $1 million to the Fidelity Brokerage Services account of a woman in Louisiana. Schwab blamed an “issue created by a software enhancement” for erroneously transferring $1.2 million in February to the Fidelity account of Kelyn Spadoni, rather than the $82.56 she had requested, according to a lawsuit filed in federal court in New Orleans last month. When the company realized the mistake and attempted to take the money back, it was gone and Spadoni wasn’t answering her phone, the bank said.
Archegos Ripples Through Banks’ Lucrative Hedge Fund Units
Cathy Chan and Steven Arons – Bloomberg
Nomura, Credit Suisse tighten financing in hedge fund units; Regulators are looking into what risks banks are taking
The collapse of Archegos Capital Management LP, an investment firm that few even on Wall Street had heard of until it imploded last month, is changing a lucrative, decades-old part of global banking. Nomura Holdings Inc. and Credit Suisse Group AG, the two lenders hit hardest, have started to curb financing in the business with hedge funds and family offices. European regulators are looking at risks banks are taking when lending to such clients, while in the U.S., authorities started a preliminary probe into the debacle.
Credit Suisse Sells $2 Billion of Archegos-Linked Stocks
Drew Singer, Crystal Tse, and Gillian Tan – Bloomberg
Shares of Discovery, Iqiyi were offered on Tuesday evening; Bevy of block trades has erased nearly $200 billion of value
Credit Suisse Group AG unloaded about $2 billion of stocks tied to the Archegos Capital Management blowup in the second such block sale since the bank wrote down the bulk of its exposure in the first quarter. The stock offerings included Discovery Inc. and Iqiyi Inc., adding to some $2.3 billion worth of shares tied to the debacle that the bank sold last week, according to people familiar with the matter. The trades follow a torrent of similar transactions that had already erased about $194 billion in market value as banks from New York to Zurich and Tokyo unwound leveraged equity bets by Bill Hwang’s family office.
Spain’s CaixaBank Set to Cut 7,000 Jobs After Bankia Takeover
Macarena Munoz Montijano and Thomas Gualtieri – Bloomberg
Spanish lender CaixaBank SA is seeking to cut about 7,000 jobs after taking over of smaller rival Bankia SA, according to people with knowledge of the matter. The bank’s management and workers’ representatives agreed at a meeting on Tuesday to form a negotiation committee on the cuts and will meet next on April 20, a spokesman for the lender said, declining to give details on the number of jobs to be lost.
JPMorgan Posts Investment-Banking Fee Surge While Loans Decline
Hannah Levitt – Bloomberg
Large reserve release adds to investment-banking windfall; Shares decline as Dimon says loan demand ‘remains challenged’
JPMorgan Chase & Co.’s dealmakers just helped usher in the firm’s best first quarter on record, but shares fell as the bank warned that loan demand remains tepid. Investment-banking fees soared 57%, beating analysts’ estimates and boosting net income to $14.3 billion, the most JPMorgan has ever earned for the first three months of the year. A larger-than-expected reserve release added to the windfall as the bank determined it didn’t need as much socked away for future loan losses.
JPMorgan beats earnings estimates on strengthening US economy; Largest US bank by assets cuts back loan loss reserves by $5.2bn
Imani Moise – FT
JPMorgan Chase’s earnings grew fivefold in the first quarter, as a strengthening US economy allowed it to release more reserves for potential bad loans and surging investment banking fees propped up results. The largest US bank by assets on Wednesday pared back its loan loss reserves by $5.2bn, signalling confidence that government stimulus and rapid vaccine rollouts have staved off the severe recession economists once feared.
HSBC relocates top leadership from London to Hong Kong; Divisions accounting for almost all of lender’s global revenue will be run out of the territory
Stephen Morris – FT
HSBC will move four of its top executives to Hong Kong from London, one more than had been anticipated, as the bank continues to accelerate its strategic shift to Asia. In an internal memo on Wednesday, chief executive Noel Quinn said that Greg Guyett, co-head of global banking and markets, Nuno Matos, chief executive of wealth and personal banking, and Barry O’Byrne, chief executive of global commercial banking, would relocate in the second half of the year.
Ex-JPMorgan Broker Accused of Bilking Grandma Gets Trading Ban
Tom Schoenberg – Bloomberg
Evan Schottenstein refused to comply with watchdog probe; Adviser allegedly ripped off his wealthy grandma for fees
A former JPMorgan Chase & Co. financial adviser accused of trading his wealthy grandmother’s assets without her knowledge has been barred from working as a broker by the industry’s watchdog, according to information on the Financial Industry Regulatory Authority’s website.
Kuwait Asks Banks to Employ Citizens in Top Leadership Positions
Farah Elbahrawy – Bloomberg
Kuwait’s central bank asked local lenders to employ its citizens to leadership positions as Gulf nations expedite their push toward nationalization. Kuwaiti nationals should comprise at least 70% of the banking sector’s upper and middle-level managements, the regulator said Wednesday. Banks will have until the end of 2023 to implement the changes.
China Huarong Showdown Reveals Beijing’s Tougher Stance on Risk
Richard Frost – Bloomberg
Central government has been quiet on debt-manager’s future; State Council issues statement on failing state-backed firms
Market turmoil surrounding China Huarong Asset Management Co. intensified on Wednesday as investors interpreted government silence on the embattled firm as a lack of official support. The Communist Party has yet to comment on the distressed-debt manager, which is controlled by the finance ministry, even as concern about a potential restructuring sent its dollar bonds plunging to distressed levels. China’s State Council, the country’s top administrative body, instead reinforced the idea that struggling state-backed companies shouldn’t rely on government support.
JPMorgan Asia Pacific Vice Chair El-Omari Retires After 29 Years
Vinicy Chan – Bloomberg
Hong Kong-based investment banker joined the firm in 1992; Veteran of consumer and retail banking will leave in summer
Mac El-Omari, vice chairman of investment banking for Asia Pacific at JPMorgan Chase & Co., is retiring from the bank after serving nearly three decades. The Hong Kong-based banker will stay with the U.S. lender for a few months to smooth the transition and will leave in the summer, according to an internal memo seen by Bloomberg News.
Beijing hints at truce in war on Jack Ma’s business empire; Alibaba appears to escape tough punishment while Ant Group faces more severe measures
Tom Mitchell and Ryan McMorrow and Yuan Yang – FT
The contours of a possible truce between Beijing and Jack Ma’s internet empire are beginning to take shape, with the Chinese billionaire’s ecommerce flagship Alibaba faring better than its sister fintech unit Ant Group.
HSBC says four senior bankers to relocate to Hong Kong as it extends pivot to Asia; Senior executives running its three major businesses, which account for the bulk of its revenue, will sit in Hong Kong, rather than London
Chad Bray – South China Morning Post
HSBC plans to move four of its senior executives to Hong Kong from London as CEO Noel Quinn bets big on future growth in Asia. The shift, which has been widely anticipated, would see Barry O’Byrne, the head of its global commercial bank; Greg Guyett, co-CEO of its global banking and markets business; and Nuno Matos, head of its wealth and personal banking segment, relocate to the city in the second half of this year, according to an internal memorandum seen by the Post. All three sit on the bank’s group executive committee.
U.K. Businesses Burn Cash as Brexit Bureaucracy Takes Its Toll; EU border hassle hits U.K. exporters big and small
Lizzy Burden and Deirdre Hipwell – Bloomberg
Breaking free of Brussels bureaucracy was meant to herald a bonfire of red tape for Britain. In the first 100 days of Brexit, the only thing many businesses burned was money. Customs checks, paperwork and border delays since the U.K. completed its withdrawal from the European Union at the start of the year are sucking cash and time out of firms from big-name retailers to small family-owned businesses. Companies, which warned for years that this would happen, take no pleasure in saying “we told you so,” but the frustration is clear as they grapple with the long-term reality.
UK exports to Ireland partially recover following Brexit
John Campbell – BBC News
Trade between the UK and Ireland partially recovered in February, after a steep drop in January following Brexit. The value of UK exports to Ireland was up by 38% month-on-month from £1.13bn to £1.56bn. That is still down by more than 7% compared to February last year when exports were valued at £1.69bn. The figures for Irish imports to the UK continued to deteriorate, down by 21% month-on-month and 17% year-on-year.
Brexit: Lord Frost to meet EU to discuss NI Protocol
John Campbell and Adam Fleming – BBC
The UK Brexit minister will meet his EU counterpart on Thursday to discuss the Northern Ireland Protocol and the Irish sea border. Lord Frost will travel to Brussels for talks with EU Commission Vice-President Maros Sefcovic. In March the UK delayed the implementation of some new sea border processes without EU agreement, prompting the EU to take legal action. Two weeks ago the UK sent the EU a plan for implementing the protocol. The BBC understands that the “work plan” document sets out areas where the two sides could work together but does not include dates for when the problematic parts of the protocol – the Northern Ireland part of the Brexit deal – will be in place.
Brexit Bureaucracy, U.S. Inflation, Asia Rates on Hold: Eco Day
Enda Curran – Bloomberg
Welcome to Wednesday, Europe. Here’s the latest news and analysis from Bloomberg Economics to help you start the day: Breaking free of Brussels bureaucracy was meant to herald a bonfire of red tape for Britain. In the first 100 days of Brexit, the only thing many businesses burned was money U.S. consumer prices climbed in March by the most in nearly nine years as the end of pandemic lockdowns triggered a rebound in travel and commuting; the report shows core inflation is stirring, not surging, writes Bloomberg Economics’ Carl Riccadonna and Yelena Shulyatyeva
Swiss billionaire Hansjörg Wyss, now a top bidder for Tribune Publishing, is an influential liberal donor
Kenneth P. Vogel And Katie Robertson – Chicago Tribune
Long before he emerged as a potential champion of journalism with his bid for Tribune Publishing, Swiss billionaire Hansjörg Wyss quietly created a sophisticated political operation to advance progressive policy initiatives and the Democrats who support them.