Hedge Fund Talent Schools Are Looking for the Perfect Trader

Jun 20, 2024

First Read

Hits & Takes
John Lothian & JLN Staff

FIA’s IDX concluded last night on a high note with the gala dinner in support of the Futures For Kids charity and the end of Rama Pillai‘s Kilt Challenge. The dinner gala raised a total of 150K British pounds, including over 60K pounds raised in Rama’s eight-month record-breaking Kilt Challenge fund-raising effort.

Rama was eloquent in his remarks about the experience, saying, “Over this year, it has been a journey I have gone through. It has reaffirmed to me the fact that I work and live in an industry with people who really care and want to do the best for others and those who are in need. All I did was just use the kilt as a symbol.”

I had the honor of sitting at the Table of Individuals in the corner of the hall for the dinner with representatives of some of the Futures For Kids charities and staff members from the FIA. It was refreshing to be there and hear the stories of the charities, some of which I hope to share with you in the future.

Because of the success Rama showed this year in the Kilt Challenge, two people were selected for next year, Goldman Sachs’ Alicia Crighton and ICE’s Chris Edmonds.

The most interesting man in the world again attempted to do the splits on the dance floor at the gala, but I missed capturing it on video. However, FIA CEO Walt Lukken may have captured the attempt.

The latest edition of The TRADE Magazine for Q2 is now available online. As the first half of the year concludes, the financial industry is poised for change, influenced by significant global elections and regulatory updates. Traders face a challenging rates environment, and the transition to T+1 in the US has been a notable event, with initial feedback indicating a smooth operational shift, though its long-term impact remains to be seen. The key question now is whether the UK and Europe will adopt similar changes. The latest edition of The TRADE Magazine covers these developments and more, including hedge funds’ algorithmic trading survey results, new trading venues in Europe, and disparities in ETF volumes between the US and Europe. Exclusive content features interviews with key industry figures like Hugh Spencer of Janus Henderson and the trading desk at Royal London Asset Management. Additionally, the magazine addresses challenges in outsourced trading, the dynamics of emerging crossing networks in Europe, and the implications of the T+1 transition. The upcoming Leaders in Trading event in New York is also highlighted.

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

*****
Peoples’ Climate Vote 2024 marks the second edition of the global survey conducted by the United Nations Development Programme (UNDP) and the University of Oxford. This year’s survey has expanded its reach, encompassing 77 countries representing 87% of the world’s population. The Peoples’ Climate Vote is the world’s biggest standalone public opinion poll on climate change, serving as a platform for people to express their concerns and needs on climate change to world leaders.

Key findings from the United States include:
– 80% of respondents believe that countries should collaborate on addressing climate change.
– 64% think that wealthier nations should provide more assistance to poorer countries in combating climate change.
– 66% feel that the US should strengthen its commitments to addressing climate change.
– 76% prioritize protecting and restoring nature.
– Only 27% support the rapid replacement of coal, oil, and gas with renewable energy sources like wind and solar power.
– 26% believe the US is addressing climate change very poorly.
– 33% think that big businesses in the US are handling climate change very poorly.

Explore the findings from your country and download the full report HERE. ~ SAED

Our most read stories from our previous edition of JLN Options were:
Wall Street Faces Tougher Margin Rule as Zero-Day Options Boom from Bloomberg.
Regulatory Uncertainty Clouds Options Market Innovation from John Lothian News.
The role of the FCM: Futures Discovery EP 10 from John Lothian News. ~JB

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

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ASEAN exchange leaders discuss transition finance and the economic shift to net zero
JohnLothianNews.com

In a recent roundtable on transition finance with the World Federation of Exchanges (WFE), JLN spoke with three dynamic leaders representing exchanges from the Association of Southeast Asian Nations (ASEAN), all members of the World Federation of Exchanges. Speaking with us were Dr. Soraphol Tulayasathien, senior executive vice president, Stock Exchange of Thailand (SET); Dr Hezri Adnan, current director, group sustainability of Bursa Malaysia; and Laurent Poirot, head of product strategy and development at SGX. Contributing to the conversation were Nandini Sukumar, CEO of the WFE and Victoria Powell, senior manager – ESG, regulatory affairs for the WFE.

Watch the video »

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Putin’s Hybrid War Opens a Second Front on NATO’s Eastern Border
Kati Pohjanpalo, Aaron Eglitis, Milda Seputyte and Ott Tammik – Bloomberg
Shortly after midnight, several masked men in boats began removing orange navigational aids on the Narva River that separates Estonia from Russia – a watercourse which demarcates the extent of NATO’s reach. Even that late in the day it’s twilight in northern Europe at the end of May, leaving the Russian border guards who were working to lift the markers clearly visible to the watching Estonian authorities. Then again, Russia’s actions in the early hours of May 23 weren’t necessarily meant to be conducted under cover of darkness; Estonia took it as an explicit signal of intent to the Baltic states and the West more broadly.
/jlne.ws/3xqcU42

***** In case you were wondering about all the ways we are at war.~JJL

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Wednesday’s Top Three
Our top clicked item Wednesday was the FIA’s FIA and Acuiti release report on challenges and opportunities for the European listed derivatives markets. Second was Reuters’ Baseball legend Willie Mays, all-around great of America’s pastime, dead at 93. And third was The Wall Street Journal’s Willie Mays, Major League Baseball’s ‘Say Hey Kid,’ Dies at Age 93.

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Lead Stories

Hedge Fund Talent Schools Are Looking for the Perfect Trader; Amid a brutal hiring war, Steve Cohen’s Point72, Ken Griffin’s Citadel and other giant hedge funds are going in a radical new direction: Training schemes for in-house superstars.
Nishant Kumar and Liza Tetley – Bloomberg
More than a decade ago, hedge fund titan Steve Cohen and his portfolio manager Harry Schwefel sat huddled on SAC Capital’s busy trading floor. Schwefel was musing on how a run of lucky breaks had powered his rise at the firm. Cohen’s reaction: “We shouldn’t allow it to be luck anymore.” Today he’s enjoying the fruits of that epiphany. The duo went ahead and constructed one of the hedge fund industry’s first assembly lines of top talent – in Cohen’s words by taking people you’d rank as a “nine” and making them perfect 10s. The result is a conveyor belt of polished high-performers who’ve helped him rebuild after a costly insider-trading scandal and to emerge on the other side with an empire whose coffers now boast $34 billion of client cash.
/jlne.ws/3KNGUKq

Nasdaq Boosts Scrutiny of Investors in IPOs From China, HK
Kiuyan Wong – Bloomberg
Nasdaq Inc. is once again increasing scrutiny of small initial public offerings from China and Hong Kong to avoid a repeat of the wild swings that followed a handful of deals two years ago, according to people familiar with the matter. Several Hong Kong- and China-based IPO applicants have faced a series of questions from Nasdaq, the people said, asking not to be identified discussing private information. Questions centered on the identity and independence of the firms’ pre-IPO investors selling shares in the listings, the people said.
/jlne.ws/3VQO72o

JPMorgan follows Goldman Sachs in scrapping EU bonus cap for London staff
Lars Mucklejohn – CityAM
Wall Street giant JPMorgan Chase has become the latest bank to scrap an EU-imposed cap on its UK staff’s bonuses, after rival Goldman Sachs made the same move last month. JPMorgan’s London-based bankers will now be able to earn payouts equivalent to as much as 10 times their base salary, a person familiar with the matter told City A.M. This ratio is up from 2:1 under the EU-imposed cap. The person added that the bank did not expect staffers’ fixed pay to materially change under the new structure this year compared to 2023.
/jlne.ws/3xg1gc9

Four Financial Services Industry Leaders Join DTCC Board of Directors; New Members Bring Deep Subject Matter Expertise and Diverse Experiences to the DTCC Board
DTCC
DTCC, the premier post-trade market infrastructure for the global financial services industry, today announced that four new Board Members have joined its Board of Directors. The Board plays a critical role in setting the strategic direction of DTCC, working closely with the firm’s leadership and advising on topics including risk management, regulatory matters, the development of new products and services, emerging fintech and more. The new Directors are Brian Gallagher of JPMorgan Chase, Christopher Gelvin of UBS, Jon Herrick of the New York Stock Exchange and Igor Modlin of Goldman Sachs.
/jlne.ws/3XyHpzG

The ‘equitification’ of credit; Public and private markets are seeing big changes that provide new options for investors
Jeff Meli – Financial Times
A transformation is under way in the world of credit. On the one hand, new instruments and trading processes are improving the liquidity of public bonds and loans, and expanding the range of strategies available to investors. On the other, the private credit market has grown rapidly, from a funding source for small and medium-sized businesses into a legitimate alternative to public markets. These are not separate trends. Instead, they are part of a broader structural shift we call the “equitification” of credit. It will have long-lasting implications for how issuers raise funds and how investors position across the credit spectrum.
/jlne.ws/4cxpDRD

The dark side of tokenisation; The financial industry needs to think of resilience as much as efficiency when putting real-world assets on to blockchains
Hilary Allen – Financial Times
Traditional financial institutions are increasingly showing interest in “tokenising” real-world assets, meaning they are curious about how these assets could be digitally represented by programmable tokens recorded on shared ledgers. There could be real efficiency gains associated with tokenisation, but the drive towards it could also take a dark turn. The most dangerous outcomes would arise if tokenisation of real-world assets were pursued simply to feed into what has been described as “the perpetual motion machine that is crypto trading”. Regulators around the world have expressed concerns about the integration of crypto and traditional financial markets, because of the high levels of volatility, leverage, concentration and operational risk associated with the crypto markets. This integration would be sped up if ownership of tokenised real-world assets were recorded on so-called permissionless public blockchains. The type of ledger favoured by the crypto industry, these blockchains can be accessed by any computer running the necessary software to host them, no identification or vetting required
/jlne.ws/3xr8jPa

Police arrest two Londoners suspected of running illicit £1 billion crypto exchange
Louis Goss – MarketWatch
Police have arrested two people in London suspected of running an illegal crypto exchange that is believed to have processed more than £1 billion ($1.3 billion) worth of crypto assets, the U.K.’s financial regulator said in a statement on Thursday. The two unnamed individuals, aged 38 and 44, were arrested on suspicion of operating the unregistered crypto exchange in a sting led by the U.K.’s Financial Conduct Authority and London’s Metropolitan Police Service.
/jlne.ws/3RwIDYo

Dilemma on Wall Street: Short-Term Gain or Climate Benefit? Portfolio managers have conflicting incentives as the economic and financial risks from climate change become more apparent but remain imprecise.
Lydia DePillis – The New York Times
A team of economists recently analyzed 20 years of peer-reviewed research on the social cost of carbon, an estimate of the damage from climate change. They concluded that the average cost, adjusted for improved methods, is substantially higher than even the U.S. government’s most up-to-date figure. That means greenhouse gas emissions, over time, will take a larger toll than regulators are accounting for. As tools for measuring the links between weather patterns and economic output evolve – and the interactions between weather and the economy magnify the costs in unpredictable ways – the damage estimates have only risen.
/jlne.ws/3xu5Wer

Lord Cruddas could shift trading empire to US ‘in a year or two’
Michael Bow – The Telegraph
The Tory peer Lord Cruddas has suggested he is open to shifting the listing of his online trading empire to New York if London’s ailing stock market fails to recover. Lord Cruddas, a former Conservative donor, said a switch for CMC Markets was not on the cards currently but might be considered in “a year or two” if London does not close the valuation gap with the US market.
/jlne.ws/3VzYTZT

Opinion: France is about to bring the EU to the brink of collapse
Allister Heath – The Telegraph
It is a terrifying showdown, an epic moment of truth that threatens to blow up the EU, trigger another Eurozone crisis and, just three days into his prime ministership, throw Sir Keir Starmer’s immigration and trade plans into disarray. In two weeks’ time, France will have either elected the most radical Right-wing populist government ever to control a nuclear power, opted for a rabidly anti-capitalist, anti-Western, far-Left coalition, or proved itself to be entirely ungovernable. The centre won’t hold. In extremis, President Emmanuel Macron may even have to resign. Chaos could overshadow the Olympics. I fear for the France I love, but above all I am angry at decades of failure by an arrogant, pseudo-meritocratic, overly Cartesian ruling class whose hatred of classical liberalism and disdain for conservative values are forcing the country into such an unpalatable choice.
/jlne.ws/3RBWXyN

Britain could become ‘island of stability’ as Macron debt crisis consumes France, says UBS
Tim Wallace – The Telegraph
Britain could become “an island of stability” in financial markets as France is rocked by Emmanuel Macron’s debt binge, UBS has warned. Shahab Jalinoos of UBS said the UK’s reputation as Europe’s “problem child” could be reversed amid increased political uncertainty in France after Macron triggered a snap election. Britain’s position “is very different to the French case, where there is a risk of a clash with the EU Commission, for starters”, he said hours after Brussels criticised Mr Macron’s borrowing binge.
/jlne.ws/3Vtdpm5

Korean Won Extends Losses in Test of Expanded Trading Hours
Hooyeon Kim – Bloomberg
The South Korean won edged lower as trading hours were expanded to test the platform. The won weakened to 1,386.7 per dollar as of 5:20 p.m. Seoul time, according to a Bank of Korea official. The currency slid 0.2% to 1,384.65 at 3:30 pm official closing time on the back of broad dollar strength. Earlier this week, South Korea’s FX committee said trading of the onshore won will continue through 2 a.m. the next day as it conducts final tests on the currency’s extended trading hours.
/jlne.ws/3VvaWYo

Consensys CEO Joseph Lubin Says SEC Closes Ethereum Inquiry; The SEC declined to comment on possible investigations; Agency signed off on Ether exchange-traded funds last month
Dave Liedtka – Bloomberg
The US Securities and Exchange Commission has ended its review into Ethereum, according to Joseph Lubin, one of the original developers of the second-largest cryptocurrency network. Lubin is also the founder and chief executive officer of crypto software firm Consensys, which sued the agency in April in an effort to fend off regulation of the Ethereum blockchain. The SEC does not comment on the existence or nonexistence of a possible investigation, a spokesperson said Wednesday.
/jlne.ws/4ctGDYJ

**** Here is that story from Reuters.

What does the family office explosion mean for the world? As the ranks of the super-wealthy swell, the way they deploy their money is changing
Lee Harris – Financial Times
Welcome back. A Texas district judge yesterday dismissed ExxonMobil’s lawsuit against an activist shareholder who challenged the oil major’s climate change risks, ending a six-month campaign by Exxon with far-reaching implications for shareholder rights. Exxon said its lawsuit had “put a spotlight on the abuse of the shareholder-access system”.
/jlne.ws/3xqDrOG

Ukraine Invasion

Russia obliterates front-line Ukraine towns by retrofitting bombs and expanding its air base network
Lori Hinnant, Vasilisa Stepanenko and Hanna Arhirova – Associated Press
The first shock wave shattered aisles stacked almost to the ceiling with home improvement products. The next Russian bomb streaked down like a comet seconds later, unleashing flames that left the megastore an ashen shell. A third bomb failed to detonate when it landed behind the Epicenter shopping complex in Kharkiv. Investigators hope it will help them trace the supply chain for the latest generation of retrofitted Russian “glide bombs” that are laying waste to eastern Ukraine. The Soviet-era bombs are adapted on the cheap with imported electronics that allow distant Russian warplanes to launch them at Ukraine.
/jlne.ws/3VvdFAP

How Putin Rebuilt Russia’s War Machine With Help From U.S. Adversaries; Iran, North Korea and China are supplying the people and know-how to tool up Russia’s factories and churn out arms for the war in Ukraine
Warren P. Strobe and Michael R. Gordon – The Wall Street Journal
Russia’s military cooperation with Iran, North Korea and China has expanded into the sharing of sensitive technologies that could threaten the U.S. and its allies long after the Ukraine war ends, according to U.S. defense and intelligence officials. The speed and depth of the expanding security ties involving the U.S. adversaries has at times surprised American intelligence analysts. Russia and the other nations have set aside historic frictions to collectively counter what they regard as a U.S.-dominated global system, they said.
/jlne.ws/3zcP1O8

Opinion: Desperation is making Putin even more dangerous
Con Coughlin – The Telegraph
There is nothing “peaceful” about the defence pact that Vladimir Putin signed yesterday with his North Korean counterpart, Kim Jong-un. On the contrary, the comprehensive strategic partnership agreed between the two leaders during the Russian president’s visit to Pyongyang demonstrates the deepening bond between two rogue states whose main aim is to forge a new “axis of evil” to confront the West. As Putin explained in a letter that was published by the North Korean media before his visit, forging a pact between Moscow and Pyongyang is key to confronting efforts by the US and its allies to impose a “neocolonialist dictatorship” around the globe.
/jlne.ws/3VOlqmK

Russia pounds Ukraine energy sites in latest ‘mass’ attack
Daria Andriievska – AFP
A Russian missile and drone barrage damaged a Ukrainian power plant and other energy facilities overnight, officials said on Thursday, the latest in a series of strikes that have pushed its grid to the brink. The targeted aerial barrages over recent months have crippled Ukrainian electricity generation capacity and forced officials to impose rolling blackouts and import supplies from neighbouring EU states.
/jlne.ws/4caeYME

EU Agrees First-Ever Russia Gas Sanctions Hitting LNG Shipments
Alberto Nardelli – Bloomberg
The European Union has approved a new package of sanctions over Russia’s invasion of Ukraine, seeking to tighten the enforcement of restrictions by widening the scope of measures to its network of accomplices and hit Moscow’s revenues.
/jlne.ws/4cwYMVL

EU imposes sanctions on Russian LNG; First ever measures against Russia’s gas part of latest restrictions against Moscow
Henry Foy and Alice Hancock – Financial Times
The EU has agreed its first sanctions against Russian gas by targeting the country’s lucrative liquefied natural gas shipments, as part of its latest package of restrictions against Moscow in response to its invasion of Ukraine. The deal struck between member state ambassadors on Thursday will prohibit Russian exporters from using EU ports to transfer gas between large tankers and smaller vessels destined for third countries. But it falls short of a full ban on EU states purchasing the fuel.
/jlne.ws/45ADy7e

***** Here is The New York Times’ version of this story.~JJL

Israel/Palestine Conflict

Hezbollah threatens to attack Cyprus if it lets Israel use airports
The Telegraph
Hezbollah’s chief has threatened to attack Cyprus if the Mediterranean island opens its airports to Israel. Hassan Nasrallah on Wednesday said his Iran-backed group had been informed that Israel could use bases in Cyprus if Hezbollah struck Israeli airports. Cyprus, a European Union member, has good relations with Israel and Lebanon, and lies close to the coast of both countries. Britain has also retained sovereign control over two base areas in Cyprus, its former colony, since the island’s independence in 1960.
/jlne.ws/3RYjOov

Hezbollah chief says nowhere in Israel will be spared in case of full-blown war
Layal Abou Rahal – AFP
Hezbollah chief Hassan Nasrallah on Wednesday warned “no place” in Israel would be spared in case of full-blown war against the Lebanese group, and threatened Cyprus if it opened its airports to Israel. “The enemy knows well that we have prepared ourselves for the worst… and that no place… will be spared our rockets,” Nasrallah said in a televised address. Israel must expect “us on land, by sea and by air”, he said.
/jlne.ws/3REQ4fZ

Israel army spokesman says Hamas can’t be eliminated
AFP
Israel’s top army spokesman said Wednesday that Hamas cannot be eliminated, prompting a knee-jerk reaction from the government which quickly reiterated it remains committed to the Palestinian militant group’s destruction. More than eight months of war, sparked by Hamas’s unprecedented October 7 attack on Israel, have failed to oust the Islamist militants from Gaza but have brought widespread devastation.
/jlne.ws/3VPyyYW

Hizbollah warns Israel of war ‘without limits’ and threatens Cyprus; Leader of militant group issues threat as fears grow of full-blown war across Lebanon’s southern border
Raya Jalabi and James Shotter – Financial Times
Hizbollah leader Hassan Nasrallah has warned that the Lebanese militant group would fight “without rules and without limits” if its conflict with Israel widens. In a televised address, Nasrallah also threatened neighbouring Cyprus for the first time, saying Hizbollah would consider the country “part of the war” if it allowed Israel to continue using Cypriot airports and bases for military exercises.
/jlne.ws/3VuYwzv

Exchanges, OTC and Clearing

SGX FX wins Best AI-Based Solution at 2024 WatersTechnology Asia Awards
SGX Group
SGX FX has clinched the prestigious award for Best AI-Based Solution at the 2024 WatersTechnology Asia Awards. This accolade recognises the team’s pioneering efforts in leveraging artificial intelligence (AI) to innovate and enhance the global FX market. The Best AI-Based Solution category celebrates companies that have demonstrated exceptional and innovative use-cases of AI technology across the industry. This includes advancements in machine learning, natural language processing, advanced analytics, observational learning, neural networks, and robotic process automation. The award underscores the transformative impact of AI on the financial sector, highlighting the continuous evolution and improvement driven by cutting-edge technology.
/jlne.ws/3RArdKc

ASX admits first Bitcoin ETF
ASX
ASX today announces the admission of its first spot Bitcoin exchange-traded fund (ETF), marking a significant milestone in the Australian financial market and cryptocurrency industry. The admission of the VanEck Bitcoin ETF (ASX:VBTC) comes as crypto assets, such as Bitcoin and Ether, increasingly move into the investment mainstream, supported by increased regulatory guidance around the product category and growing consumer demand.
/jlne.ws/4cuNIsc

Number of investors in fixed income grows 34% and in equities 23% in 12 months at B3; Total number of investors reaches 17.6 million. Amount in custody reaches BRL 2.2 trillion
B3
The volume invested in fixed income products has risen due to a high SELIC base rate in the past 12 months. The amount reached almost BRL 1.8 trillion at the end of the first quarter of 2023, up 42% on the same period last year. During these 12 months, fixed income attracted 4 million new investors, bringing the total number of this type of investor to 15.3 million. These figures come from the most recent edition of the study that analyzes the evolution of individual investors at B3.
/jlne.ws/3VNOr27

INBEST GPF I, INBEST GPF II and INBEST GPF V to start trading in BME Scaleup on 21th June
BME
The companies, which are the fifth, sixth and seventh in this market, have an initial capitalization of 14.8, 12.6 and 13.6 million euros, respectively. The Board of Directors of BME Scaleup has approved the incorporation of INBEST GPF I SOCIMI, INBEST GPF II SOCIMI and INBEST GPF V SOCIMI next 21th June once all the documentation submitted by the companies has been analyzed and studied and the favorable evaluation reports of the Market Coordination and Incorporations Committee have been issued. As indicated in the Initial Market Access Documents of INBEST GPF I, INBEST GPF II and INBEST GPF V, a price of one euro per share has been taken as a reference for the start of trading of the shares, which implies an initial capitalization of the companies of 14.8, 12.6 and 13.6 million euros, respectively.
/jlne.ws/3XAqahd

Re: FSB Consultation report on Liquidity Preparedness for Margin and Collateral Calls
CCP Global
The Global Association of Central Counterparties (“CCP Global”)1 is the international association for central counterparties (“CCPs”), representing 42 members who operate over 60 individual CCPs across the Americas, EMEA, and the Asia-Pacific region. CCP Global appreciates the opportunity to respond to the Consultation report on Liquidity Preparedness for Margin and Collateral Calls 2 (“the Consultation”) prepared by the Financial Stability Board (“FSB”).
/jlne.ws/3VP8gpB

Delisting Of The Bitcoin Price Index Futures (BT)
Bourse de Montreal
Bourse de Montreal Inc. (the ”Bourse”) and Canadian Derivatives Clearing Corporation (“CDCC”) wish to inform its participants that it plans to delist the Bitcoin Price Index Futures (BT) on June 28, 2024, after market close.
/jlne.ws/4baK2uz

“Shenzhen Stock Exchange – Chuangxianghui” Held Special Event On M&A Restructuring To Help Cultivate And Develop New Quality Productive Forces
Mondovisione
On May 9, to implement the new “Nine National Rules”, SZSE held the 15th “Chuangxianghui” forum, focusing on the main channel function of capital market in M&A restructuring. We invited representatives from enterprises such as Zhejiang Provincial Energy Group, Zhejiang State-owned Capital Operation Co., Ltd., Zhejiang International Business Group, Zhejiang Communications Investment Group, Wuchan Zhongda Group, Sanhua Intelligent Controls, Hikvision, Huadong Medicine, and Rongsheng Petrochemical, as well as representatives from institutions such as Huatai United Securities and Global Law Office. All participants met in Hangzhou and discussed boosting the development of new quality productive forces through M&A restructuring.
/jlne.ws/3LcqMT3

New instruments of the over-the-counter stock market
MOEX
On June 19, 2024, 11 new securities will become available in the Moscow Exchange service for concluding over-the-counter transactions in unlisted shares with settlements through a central counterparty (CCP). The total number of unlisted securities available for transactions will reach 69 shares. In the future, it is planned to expand the list of available tools.
/jlne.ws/3xqiK5u

Fintech

Liquidnet to imminently roll out derivatives predicted volume curve and sweep price analytics; New analytics make up the second phase of a three-part roll-out by Liquidnet. The first phase included a set of pre-trade analytics covering volume and liquidity information.
Annabel Smith – The Trade
Liquidnet is set to roll out the second phase of its derivatives analytics suite in the next few weeks, The TRADE can reveal. Aimed at supporting buy-side traders with their derivatives flow by creating an ecosystem of information all in one place, the analytics suite is being rolled out in three phases. Already brought to market, phase one includes volume and liquidity information. Traders can access the user face via GUI or API.
/jlne.ws/3z7fH2x

Fintech veteran Mats Almstrom appointed as new board member of Vermiculus Financial Technology
Vermiculus
Vermiculus Financial Technology, the leading provider of technology solutions for exchanges, clearing houses and CSDs worldwide – has welcomed the new board member Mats Almstrom. Mats Almstrom is a seasoned IT architect with more than 30 years of experience from trading, clearing, and CSD projects worldwide such as AMEX in New York, Alpha Exchange in Toronto and B3 in Sao Paulo. In his current role at Vermiculus, he is involved in building B3’s new CSD by customizing Vermiculus’ VeriSafeâ„¢ product to meet B3’s requirements.
/jlne.ws/4ex6h0z

FX trading has not shifted due to T+1 as some had predicted; The drama around cut-offs at CLS and custodians prior to the T+1 implementation had many believing the FX market would alter drastically, but so far, it’s business as usual over the first three weeks of the shortened settlement cycle as the first big public holiday – and major test – approaches.
Jonathan Watkins and Sophia Thomson – The Trade
It was billed as being one of the most impacted market practices from the rollout of T+1 settlement for US equities, but over the first three weeks, the FX market is operating BAU, according to leading asset managers and their service providers. Despite the relative ‘non-event’ however, there are two important factors to consider: firstly, that many asset managers are still taking a wait-and-see approach, and secondly, that we have yet to encounter the first US public holiday in a T+1 environment.
/jlne.ws/3KPvRQX

Antish Manna: Leveraging algo strategies to ensure the best outcomes; Head of execution analytics, multi-asset, at Man Group, Antish Manna, sits down with The TRADE to explore how to leverage algorithms to achieve the best results, touching on machine learning, broker collaboration, and ensuring minimal bias.
Annabel Smith – The Trade
How has the way you determine what is an optimum algo strategy changed in recent years and what is driving this change?
I have to say that in some ways it hasn’t changed at all; first and foremost, our role is to understand the objective of the investment strategy we are trading for and ensure the algo strategy we pick matches that objective. That won’t shift. We do, however, have to stay abreast of and adapt to developments in the marketplace, for example, the steady growth of closing auction volumes and close facilities. On the latter, we work really closely with our brokers to adapt our algo strategies to benefit from those changes, where possible through strict A/B experimentation.
/jlne.ws/3VOH4Y5

UK’s Global Fintech Community On Track For Further Integrity And Ethics Skills Boost With Innovate Finance And CISI Certificate In Ethical AI Partnership
Mondovisione
The UK’s industry body for the fintech community, Innovate Finance, has confirmed it will be distributing the CISI’s Certificate in Ethical Artificial Intelligence (AI) to its membership. This new partnership means that the CISI’s Certificate in Ethical AI will be added to the Innovate Finance elearning programme and made available to all Innovate Finance members. Educational charity and professional body the CISI has a global membership of over 53,000 based in over 100 countries. The Institute offers qualifications and lifelong elearning opportunities for those working or aspiring to work in the capital markets, financial planning and wealth management professions.
/jlne.ws/4bhBe5X

AI is coming for our anger; A SoftBank project is working on technology that takes the rage out of customer phone calls
Leo Lewis – Financial Times
Howard Beale, the prophetically fuming anti-hero from the 1976 film Network, was certainly very angry. Increasingly, according to successive Gallup surveys of the world’s emotional state, we all are. But possibly not for much longer if artificial intelligence has any say in it. AI was already coming for our jobs; now it is coming for our fury. The question is whether anything has a right to take that fury without permission, and whether anyone is ready to fight for our right to rage.
/jlne.ws/3xsCmG9

OpenAI co-founder Ilya Sutskever announces rival AI start-up; Safe Superintelligence Inc to focus on safety and comes a month after star researcher quit the ChatGPT maker
Madhumita Murgia and Hannah Murphy – Financial Times
OpenAI’s co-founder Ilya Sutskever is starting a rival AI start-up focused on “building safe superintelligence”, just a month after he quit the AI company following an unsuccessful coup attempt against its chief executive Sam Altman. On Wednesday, Sutskever, one of the world’s most respected AI researchers, launched Safe Superintelligence (SSI) Inc, which is billing itself as “the world’s first straight-shot SSI lab, with one goal and one product: a safe superintelligence”, according to a statement published on X.
/jlne.ws/3KQP84l

***** Here is The New York Times’ version of this story.~JJL

Building expertise in the AI era; Also in this week’s newsletter, making sense of Gen Z and the evidence on working from home
Bethan Staton and Isabel Berwick – Financial Times
/jlne.ws/3Rz8xKZ

How mobile phone networks are embracing AI
Matthew Wall – BBC
/jlne.ws/45vYeNm

Cybersecurity

Most cybersecurity pros took time off due to mental health issues
Help Net Security
Cybersecurity and infosecurity professionals say that work-related stress, fatigue, and burnout are making them less productive, including taking extended sick leave – costing US enterprises almost $626 million in lost productivity every year, according to Hack The Box.
/jlne.ws/3KRKPG8

How Cybersecurity Can Steer Organizations Toward Sustainability
John Donegan – DarkReading
By integrating environmental initiatives, social responsibility, and governance into their strategies, security helps advance ESG goals.
/jlne.ws/3zbxPbK

10 Ways Employees Are Sabotaging Your Cybersecurity Stance
Lisa Morgan – Information Week
Following are some ways, whether intentional or not, employees can undermine cybersecurity and some advice on how to handle each scenario.
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Cryptocurrencies

GDF, ANNA, and DTI Foundation announce partnership to support the development of standards and best practices in the digital asset industry
Global Digital Finance
Global Digital Finance (GDF), the global members association and platform for open innovation in digital assets in financial services, announces a partnership with the Association of National Numbering Agencies (ANNA), a global member association seeking to foster standardization within the financial industry, and the Digital Token Identifier (DTI) Foundation whose combined mandate is to increase transparency in the digital asset space by creating a core reference data set based on open data principles and made available as a public good. As the digital asset sector grows, it is crucial that standardized identification data is available that seamlessly blends digital asset standards with conventional financial systems.
/jlne.ws/4eyy6Wg

Why You Should Diversify Your Digital Asset Portfolio
Felician Stratmann – CoinDesk
Digital assets may be one of the few markets where diversification still seems underappreciated. Bitcoin and Ethereum remain dominant by market cap despite a growing number of innovative new projects, and many investment products provide only a handful of concentrated positions. At Outerlands Capital we have written about the benefit to risk-adjusted returns from diversification. Individually, smaller projects may carry higher risk, but investing across a broad mix of projects can reduce volatility and improve risk-return metrics like the Sharpe ratio (returns normalized for volatility). However, there’s more to diversification than higher Sharpe ratios.
/jlne.ws/3Vpeefq

Bitcoin ETF launches on Australia’s main stock exchange for the first time
Lewis Jackson – Reuters
A bitcoin exchange-traded fund (ETF) launched on Australia’s main stock market for the first time on Thursday as fund managers debut products to satisfy investors returning to cryptocurrency markets following a boom in prices. The VanEck Bitcoin ETF launched with around A$990,000 ($660,429) in assets on the Australian Securities Exchange and is the culmination of over three years of negotiations with operator ASX.
/jlne.ws/3Vxot1B

SNB Extends Digital-Franc Pilot by at Least 2 Years, Martin Says
Bastian Benrath – Bloomberg
The Swiss National Bank has decided to continue its pilot of issuing of a wholesale central-bank digital currency for at least two more years, Governing Board member Antoine Martin said. The project, which kicked off last December and is scheduled to end June 30, was “very successful,” he said on Thursday after the SNB’s interest-rate decision in Zurich. It will therefore also be broadened, he added.
/jlne.ws/3VMucSi

Politics

UK and US at loggerheads over Ukraine joining Nato
Tony Diver – The Telegraph
The UK and US are at loggerheads over Ukraine’s relationship with Nato, after American officials said its path to membership should not be described as “irreversible”, it has been reported. Washington is reportedly concerned about plans to give Volodymyr Zelensky new assurances on Nato membership at a summit next month.
/jlne.ws/4ckoDA6

What a Reelected Trump Could and Couldn’t Do to Sway the Fed; He’s said Powell wouldn’t get another term as chair, but making bigger changes could be difficult.
Amara Omeokwe – Bloomberg
Central bank independence is emerging as a 2024 campaign issue, as both supporters and opponents of former President Donald Trump increasingly question whether he would, if reelected, seek to reduce the autonomy of the Federal Reserve. Neither Trump nor his campaign has taken an official stand on that, although the Republican candidate has said he wouldn’t reappoint Fed Chair Jerome Powell, whom he had discussed firing in 2018. Some informal Trump advisers have floated ideas about possible changes to the Fed that would give him more power over the central bank.
/jlne.ws/3xqj97Y

Koch Family Invests in Brooklyn Nets Owner at $6 Billion Value; Nets’ majority owner is Alibaba co-founder Joseph Tsai; Members of the billionaire Koch family will acquire 15% stake
Giles Turner – Bloomberg
Members of the billionaire Koch family will buy a minority stake in BSE Global, the holding company which owns the Brooklyn Nets, New York Liberty and the Barclays Center. Julia Koch and her three children have agreed to invest an undisclosed amount in the group, according to a statement Wednesday. They will acquire a 15% holding in a deal valuing BSE Global at about $6 billion, a person familiar with the matter said, asking not to be identified because the information is private.
/jlne.ws/3RBcGOv

Labour could borrow more without UK bond market backlash, say investors; Relaxing fiscal rules unlikely to provoke a Liz Truss-style gilts crisis, according to fund managers
Mary McDougall, Costas Mourselas and Sam Fleming – Financial Times
A new Labour government could raise extra money for investment from bond markets without causing a Liz Truss-style gilts crisis, according to fund managers. Shadow chancellor Rachel Reeves has promised to retain the Conservative government’s commitment that debt as a proportion of GDP must be on track to fall in five years if Labour wins the July 4 election.
/jlne.ws/4cq9fSL

How Russia is using nuclear power to win global influence; Despite sanctions, Russian companies are building more than a third of the new reactors around the world, which is gaining Moscow new friends
Anastasia Stognei, Benjamin Parkin, Jamie Smyth and Malcolm Moore – Financial Times
Rooppur in Bangladesh’s far west may seem an unlikely place for a Little Russia. Yet in this enclave, shop signs are written in Russian, Bengali vegetable vendors haggle over “kartoshka” (potatoes) and “morkov” (carrots), and Russian expats can have their teeth examined at Russ Dental Care. The explanation sits a few kilometres down the road where Rosatom, Russia’s state-owned nuclear giant, is building the first nuclear power plant in Bangladesh. At an estimated cost of about $12bn, it is one of the largest ever infrastructure projects in the nation of about 170mn people.
/jlne.ws/4csen94

Regulation

Starling steps up legal action against debtors amid defaults and FCA probe; About 90% of fintech’s outstanding SME loans are guaranteed by UK government
Euan Healy and Akila Quinio – Financial Times
Starling Bank is pursuing several debtors that have never shown signs of active trading, as the fintech that relied on government-backed Covid-19 loans battles rising defaults and a probe into its financial-crime controls. Since May, Starling has filed winding-up petitions against 24 companies that have defaulted on loans, UK court filings show. Most of the entities have reported little-to-no business activity, three have never filed accounts, while a further six have been dormant since incorporation, according to company filings analysed by the Financial Times.
/jlne.ws/4cuyDa4

PKF admits to contraventions concerning independent expert report engagements
ASIC
ASIC has accepted a court enforceable undertaking from Australian Financial Services (AFS) licensee PKF Melbourne Corporate Pty Ltd (PKF). ASIC conducted an investigation which reviewed files related to three independent expert report (IER) engagements. ASIC held concerns that PKF failed to have:
/jlne.ws/3VO8xt3

MDP issues infringement notice to Ascot Securities for serious failures
ASIC
The Markets Disciplinary Panel (MDP) issued an infringement notice to Ascot Securities Pty Ltd (Ascot) on 24 November 2023 for serious failures, requiring it to pay a penalty of $3.1 million and enter into an enforceable undertaking. The date for compliance with the infringement notice was 21 December 2023. Ascot elected not to comply.
/jlne.ws/4cqQrCU

Advisory: FMA publishes Auditor Regulation and Oversight Plan
FMA
The Financial Markets Authority (FMA) – Te Mana Tatai Hokohoko has published its Auditor Regulation and Oversight Plan 2024-2027. The plan is similar to last year’s. As the FMA has moved to annual monitoring of audit firms, rather than periodic reviews previously, our approach is continuously updated where appropriate.
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PCF Bank Limited enters into liquidation
FCA
On 19 June 2024, PCF Bank Limited (PCF), together with its subsidiaries PCF Credit Limited and Azule Limited, entered into creditors’ voluntary liquidation. Peter Dickens and Edward Macnamara of PricewaterhouseCoopers LLP (PwC) were appointed joint liquidators.
/jlne.ws/3xpRPa1

FCA urges victims to claim compensation for Ian Hudson’s illegal activities
FCA
The FCA urges victims to come forward by 3 July 2024 after the court ordered compensation for victims of fraudulent trading and regulated activities carried on without authorisation.
/jlne.ws/3Xz2oSK

FCA keeps trading apps under review over gaming concerns
FCA
In an online experiment with over 9,000 consumers, the FCA found that digital engagement practices (DEPs) used by trading apps, such as push notifications and prize draws, can increase trading frequency and risk taking.
/jlne.ws/3RYT1IH

Two arrests connected to suspected illegal £1 billion cryptoasset business
FCA
The FCA, working with the Metropolitan Police Service, has conducted an operation to arrest 2 individuals, aged 38 and 44, suspected of running an illegal cryptoasset exchange.
/jlne.ws/3xedGRS

LCC Trans-Sending Limited enters special administration
FCA
On 18 June 2024, LCC Trans-Sending Limited (LCC) entered special administration under the Payment and Electronic Money Institution Insolvency Regulations 2021.
/jlne.ws/4es7jed

Publication of “FSA Analytical Notes”
FSA
The FSA is enhancing its data analysis capabilities and data infrastructure. Some case-examples of the data analyses undertaken by the FSA as part of such efforts are published as “FSA Analytical Notes.”
/jlne.ws/3KPnrsT

Singapore Publishes Updated Money Laundering National Risk Assessment
MAS
Singapore published today its updated Money Laundering (ML) National Risk Assessment (NRA), as part of Singapore’s continuing efforts to maintain the effectiveness of its anti-money laundering (AML) regime amidst the evolving risk landscape. The updated ML NRA synthesises the ML risks observed by the Singapore supervisory and law enforcement agencies, and Singapore’s Financial Intelligence Unit – the Suspicious Transaction Reporting Office (STRO), as well as feedback from private sector entities and counterpart foreign authorities. Since its last ML NRA in 2014, Singapore has been closely monitoring our ML risks including conducting thematic risks assessments in relation to abuse of legal persons, virtual assets, and environmental crime ML, to ensure that these risks are surfaced in a timely manner to facilitate targeted risk mitigation across relevant stakeholders.
/jlne.ws/4bb6ELm

SFC secures conviction for provision of paid investment advice on Telegram chat group without licence
SFC
The Eastern Magistrates’ Court today convicted Mr Wong Ming Chung for providing investment advice on a subscription-based chat group on Telegram he hosted without a licence in a prosecution brought by the Securities and Futures Commission (SFC) (Note 1). Wong pleaded guilty to a charge of carrying on a business of advising on securities when he was not licensed to do so and was fined $10,000. He was also ordered to pay the SFC’s investigation costs.
/jlne.ws/3RBKafs

SFC suspends Shum Wai Nap for seven months for failures in managing a private fund
SFC
The Securities and Futures Commission (SFC) has suspended Mr Shum Wai Nap, former licensed representative of PICC Asset Management (Hong Kong) Company Limited (PICC), for seven months from 20 June 2024 to 19 January 2025 for fund management failures (Note 1). The SFC’s investigation found that while Shum was the investment manager on behalf of PICC for a Cayman-incorporated fund between May 2018 and April 2020, he failed to properly manage the fund to ensure that its investments were in line with its stated investment strategy, objectives and investment restrictions. He also failed to properly manage the risks of the fund in accordance with PICC’s policies (Note 2).
/jlne.ws/3VrvO2y

Notice is hereby given, for Joint Credit Information Center to be commissioned to collect and process supervisory information of banks (period of commission has commenced since 13th, June 2024)
FCA (Taiwan)
Notice is hereby given, for Joint Credit Information Center to be commissioned to collect and process supervisory information of banks (period of commission has commenced since 13th, June 2024)
/jlne.ws/4cwKNPN

ESMA Withdraws The CRA Registration Of EuroRating
Mondovisione
The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, has withdrawn the credit rating agency (CRA) registration of EuroRating Sp. z o.o. The withdrawal decision follows the official notification to ESMA by EuroRating Sp. z o.o. on 15 April 2024 of its intention to renounce their registration under the conditions set out in Article 20(1)(a) of the CRA Regulation (CRAR). The list of registered or certified CRAs has been updated.
/jlne.ws/4c9JLcr

Investing and Trading

Investing With Billionaires Is Losing Its Appeal; The valuations of family-led investment vehicles like the Agnellis’ Exor are suffering. That calls for a much more shareholder-friendly message.
Chris Hughes – Bloomberg
We’re rich, and you too can become richer if you invest alongside us. That implicit sales pitch for buying shares in Europe’s family-founded investment vehicles is falling on deaf ears. Discount valuations in this unusual sector appear ripe for narrowing. The skepticism towards the Agnelli family’s Exor NV is the most visible instance of the phenomenon. Its EUR21.5 billion ($23.1 billion) market capitalization is around 40% below the last reported net asset value – and the discount is nearer 45% when adjusted for the current worth of its listed assets. That gap is close to a historic high, and comes despite the NAV-per-share beating the MSCI World index last year and over the longer term.
/jlne.ws/3xmft7n

What Are Meme-Stock Frenzies and Why Do They Fizzle?
Bailey Lipschultz – Bloomberg
Some stocks are prone to sudden rallies and swift declines, not because their underlying businesses have changed but because of the influence of social media personalities. GameStop Corp. reawakened the “meme stock” animal spirits twice since May, spurred by a well-known Reddit user who set off the first frenzy in 2021. A smattering of meme moments this year have caused multibillion-dollar stock moves – and big losses for investors who were late to the trade.
/jlne.ws/3VRBW4z

Most stocks hyped as winners from AI boom have fallen this year; Artificial intelligence frenzy has powered Nvidia to peak of US equity market but elsewhere investors become more selective
Nicholas Megaw – Financial Times
Most of the stocks that were caught up in last year’s hype around artificial intelligence have fallen this year, suggesting that investors are increasingly trying to separate the wheat from the chaff among companies claiming to be beneficiaries of the AI trend. Massive share price rallies for high-profile groups such as Nvidia, the chip designer that this week became the world’s most valuable listed company, have spurred a growing debate about whether the US stock market is being driven by speculative hype.
/jlne.ws/3Xue8WE

Environmental, Social and Corporate Governance

Europe’s New ESG Rules Spark Questions About What Sustainable Investing Looks Like; To comply with the EU’s new rules, investment firms would have to change the name of thousands of funds or sell off $40 billion in assets.
Mathilde Augustin – Inside Climate News
The European Union’s move to tighten rules for sustainable investing will put two-thirds of Europe’s so-called ESG funds on notice, forcing thousands of them to either sell off $40 billion in assets or change their names in a way that more accurately and transparently reflects their holdings. Last month, the European Securities and Markets Authority (ESMA) initiated a long-awaited process to tackle contradictions and confusion in the world of sustainable investing. This move highlights the long-standing debate over whether stocks such as fossil fuel companies should be included in ESG-environmental, social and governance-funds. “To have that ESG moniker in the name is very important,” said Andrew Behar, CEO of As You Sow, a shareholder advocacy non-profit. “But clever people at asset management firms misused the fund naming protocol and started to come out with funds that were oftentimes the opposite of what the name was, which caused confusion in the marketplace.”
/jlne.ws/3zblBQi

The UK Has an Answer to Biden’s Massive Climate Bet; The City of London is blessed with bankers, investors and insurers able to structure deals to support the move away from fossil fuels.
Alastair Marsh – Bloomberg
The UK may not have the appetite or capacity to directly match President Joe Biden’s unprecedented funding for the US energy transition, but it does have a secret weapon of its own in the race to finance the low-carbon economy: a bounty of financial engineers. The City of London is blessed with bankers, investors and insurers able to structure deals to support the move away from fossil fuels, according to Rhian-Mari Thomas, a former leveraged finance banker at Barclays Plc who now runs the UK government-backed Green Finance Institute (GFI).
/jlne.ws/3XxFOKi

Green bond issuance surges as investors hunt for yield; Sustainable debt raises $273bn in first quarter, in contrast to downturn in ESG stock funds
Lee Harris – Financial Times
Sustainable debt issuance has hit a record level this year, as investors pile into green bonds and other debt tracking similar themes as a way of signalling their environmental credentials while also locking in an attractive yield.
/jlne.ws/4baBTpY

Energy emissions hit record high on rising fossil fuel demand, says report; Data highlight slow transition to clean energy despite big increase in renewables generation
Rachel Millard – Financial Times
Greenhouse gas emissions from energy hit a record high last year as demand for fossil fuels rose despite a big increase in renewable power, according to a report that highlights the need to speed up the green transition. Energy emissions increased 2 per cent in 2023 to exceed 40 gigatonnes of COâ‚‚ equivalent for the first time, according to the Energy Institute’s Statistical Review of World Energy. “Clean energy is still not even meeting the entirety of demand growth,” said Nick Wayth, chief executive of the London-based Energy Institute. “Arguably, the [energy] transition has not even started.”
/jlne.ws/3KRCUZh

Fighting Fire Before It Comes; As wildfires become a bigger threat, US communities like Boulder, Colorado, are scrambling for home protection solutions.
Kyle Stock – Bloomberg
This is the third story in Climate-Proofing Cities, a series that explores how cities around the world are adapting to the effects of global warming. Read more on Beira, Mozambique’s early warning system for cyclones; and about how Sao Paulo is planting hundreds of absorbent rain gardens. Juniper trees are ecological marvels. They can live for a millennium and have been growing in Boulder for about 40 million years. Birds nest in them and eat the berries, as do rabbits, raccoons and coyotes. Mountain lions hide in junipers when stalking prey, and porcupines love to nap in them. Landscapers are fond of them, too. Not only are junipers dense enough for privacy, but they’re also drought resistant, with oily leaves that look more like miniature clusters of ocean coral than evergreen needles.
/jlne.ws/3XsEvwh

Deadly heat in Mexico and US made 35 times more likely by global heating; Researchers find extreme heat four times more likely than at turn of millennium and urge reduction in fossil fuels
Nina Lakhani – The Guardian
The deadly heatwave that scorched large swaths of Mexico, Central America and the southern US in recent weeks was made 35 times more likely due to human-induced global heating, according to research by leading climate scientists from World Weather Attribution (WWA). Tens of millions of people have endured dangerous day – and nighttime temperatures as a heat dome engulfed Mexico – a large and lingering zone of high pressure that stretched north to Texas, Arizona and Nevada, and south over Belize, Honduras, Guatemala, and El Salvador.
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A tiny house to tackle climate change pops up on the Vitra Campus in Germany; Bangladeshi architect Marina Tabassum designed the dwelling to provide housing in areas prone to flooding
Edwin Heathcote – Financial Times
/jlne.ws/3XwcDr9

Carlyle to build Mediterranean oil and gas group after Energean asset deal; Private equity group’s near-£1bn acquisition of projects in Italy, Egypt and Croatia marks latest foray into sector
Tom Wilson, Lukanyo Mnyanda and Shotaro Tani – Financial Times
/jlne.ws/4ceK5He

Shareholders warn Nippon Steel faces higher decarbonisation costs with U.S. Steel takeover
Katya Golubkova – Reuters
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Institutions

Goldman Team Finds Alternative to Crowded TSMC Arbitrage Trade
Jeanny Yu – Bloomberg
It has become one of the most popular – and more recently, painful – trades among arbitrageurs on Wall Street: buying Taiwan Semiconductor Manufacturing Co.’s lower-valued Taipei shares and shorting the US stock on hopes prices will converge. Investors can use options to bet that the premium on TSMC’s American Depositary Receipts – currently hovering between 20% and 25% – will shrink while capping their potential for losses if markets move the wrong way, according to a note from the bank’s trading desk on Wednesday. It advises buying puts on the US ticker and selling those on the Taiwan shares.
/jlne.ws/45EKZu4

NatWest to buy most of Sainsbury’s Bank; Deal by state-backed lender’s new chief is latest sign of supermarket sector’s retreat from financial services
Oliver Ralph – Financial Times
NatWest is to buy most of Sainsbury’s banking business in the first significant deal by new chief executive Paul Thwaite and one that accelerates the supermarket sector’s exit after a failed push into financial services. The state-backed bank said on Thursday it had agreed to buy £2.5bn of assets including unsecured loans and credit card deposits and £2.6bn of liabilities from the supermarket chain.
/jlne.ws/45AyQ9y

Bobby Jain Sees Private Credit Competing for Hedge Fund Money
David Ramli – Bloomberg
Bobby Jain signaled that efforts to raise cash for his new hedge fund faced competition from private credit firms that attracted investors looking for alternative strategies. Investors who used to buy bonds to hedge volatility in the stock market are now looking for other asset classes for “uncorrelated” investments, Jain said at the UBS Singapore Family Wealth Forum on Thursday. “Private credit has taken up a lot of that,” Jain said. “The theme we’re going to capture in our fund is the same disintermediation theme.”
/jlne.ws/3VEG0VI

Work & Management

Companies Are Watering Down Their Diversity Recruiting Programs; Minority students worry about the impact on their job searches
Kailyn Rhone – The Wall Street Journal
White-collar companies that once championed programs to recruit diverse employees are now tiptoeing away from them. PricewaterhouseCoopers and JPMorgan Chase are among those that recently removed or altered descriptions of their programs for underrepresented students. The shift came after an “anti-woke” movement took aim at U.S. companies and a Supreme Court decision overturned affirmative action in college admissions.
/jlne.ws/3VR1Fv9

Lessons from the Pandemic: Remote Work is Working
Chris Haworth – BornTec blog
The COVID-19 pandemic had profound impacts on the world, with everything from rapid advancements in new vaccine technologies to the exposure of bitter political differences, and many aspects of daily life were impacted, particularly the acceptance of remote work. According to research conducted by LinkedIn, fewer than 5% of job postings offered the option of remote work before the pandemic but that number jumped more than fourfold to over 20% by April 2022. Now, more than 22% of the workforce – nearly 33 million Americans – works remotely and 1 in 6 companies is fully remote. BornTec is one of those companies. When the pandemic emerged we elected to go fully remote and we haven’t looked back. The switch brought a number of benefits as well as challenges and the results have been very clear: going fully remote has been a great decision for us.
/jlne.ws/3xrkgEw

Wellness Exchange

Why Wall Street Is Chasing Ozempic Wannabes; Big Pharma can’t seem to get investors hyped on much beyond obesity, so many are jumping in. Most won’t win.
David Wainer – The Wall Street Journal
Gilead Sciences, a biotech company focused on treatments for cancer and HIV, isn’t pitching itself as an obesity drug developer. But that hasn’t stopped some Wall Street analysts from trying to do that on its behalf. Seasoned Jefferies analyst Michael Yee published a market-moving note to investors last week: He dug up recent patents and cross-referenced them with prior data to unearth what looked like the makings of an early-stage metabolic program that could one day become an obesity program. There was even data on monkeys to back that up, which the company will be presenting at the American Diabetes Association conference starting later this week, according to Yee.
/jlne.ws/4c8wP6C

Is Social Media the New Tobacco? Vivek Murthy, the U.S. surgeon general, wants warning labels on the tech platforms, arguing that they are fueling a mental health crisis among teens.
Andrew Ross Sorkin, Ravi Mattu, Bernhard Warner, Sarah Kessler, Michael J. de la Merced, Lauren Hirsch, Ephrat Livni and Vivienne Walt – The New York Times
A call to arms to rethink social media. Just in: The U.S. surgeon general, Vivek Murthy, called for a warning label for social media platforms in a Times Guest Essay, advising parents that the technology may be helping fuel a mental health crisis among adolescents. It’s the latest effort by regulators to impose restrictions on social networks – particularly over their effects on children and teens – and is a reminder of the increasing scrutiny of global tech giants.
/jlne.ws/4caLq1q

With Heat Waves, an Increased Risk for Heart Problems, New Research Shows; Other recent studies link rising temperatures to neurological diseases, gastrointestinal health and increased inflammation affecting the immune system.
Victoria St. Martin – Inside Climate News
As a cardiologist in the largest city in the nation’s fastest-warming region, Ethan Katznelson has daily, first-hand knowledge of how high temperatures can put stress on the human heart. Katznelson, who practices at New York Presbyterian Weill Cornell Medical Center, regularly sees the cardiovascular stress suffered by patients who live in homes without air conditioning, or climb steep stairs in multi-story apartment buildings with no elevators, or rely on public assistance to help cope with the heat in a city where residents feel almost 10 degrees hotter than their suburban neighbors because of the urban heat island effect.
/jlne.ws/4eyLx8E

Regions

Chinese Bond Market Is So Hot One Firm Is Mulling a 50-Year Sale
Bloomberg
Amid an unprecedented bond issuance boom as borrowing costs tumble to record lows, a state-owned Chinese firm is considering an offering of a 50-year note in what would be the nation’s longest corporate debt tenor if completed. Wuxi Industry Development Group Co., owned by the Wuxi city government near Shanghai, has engaged underwriters to sound out investor interest for a potential 1 billion yuan ($138 million), 50-year domestic bond sale, according to people familiar with the matter. The deal is still at an early stage and terms, including the tenor, are subject to change, the people said, requesting anonymity in discussing private matters.
/jlne.ws/4b8HiOd

China Turns to Cast-Off Copper in Battle to Feed Hungry Smelters
Bloomberg
China has ramped up imports of copper scrap as smelters seek alternative raw materials to offset tight sipplied of mined ore. The world’s biggest refined copper producer took in nearly 1 million tons of scrap in 2024’s first five months, putting imports on pace for the strongest year since 2018. Using more scrap is one way for smelters to churn out record volumes of the metal even amid an unprecedented pinch in the ore market. Across markets, waste metal that’s recouped from the likes of factory waste, demolished buildings and unwanted cars is an important alternative to supply from mines. Scrap is highly price sensitive, typically entering the market as merchants cash in on high prices. Copper futures reached a record above $11,000 a ton last month.
/jlne.ws/45F42nV

China’s Copper Exports Hit a Record as Deflation Bites at Home
Bloomberg News
Chinese copper exports hit a record last month, as poor demand at home forced traders to seek markets overseas for their surplus. Exports of unwrought copper and products in May doubled from the previous year to nearly 150,000 tons, just topping the previous high reached in 2012, according to the latest customs data.
/jlne.ws/4cq1YlV

China Should Use Quantitative Easing If Needed: Ex-PBOC Adviser
Bloomberg
China should shake off its “taboo” regarding quantitative easing – the once-unorthodox central bank policy of buying government bonds – and recognize that it may be necessary in the interest of stoking economic growth, a former People’s Bank of China adviser said. Chinese policymakers have long rejected QE, which was used by most advanced economy central banks as a stimulus tool after they had lowered interest rates toward zero. It’s sometimes been associated with stagnant economic growth and excessive public debt, and by some critics as evidence of Western economies’ decline.
/jlne.ws/3z7J0Cn

Taiwan’s central bank warns about systemic risks of rapid ETF growth; Institution says the funds have been pushing up valuations in local stock market
Sinyi Au – Financial Times
Taiwan’s central bank is predicting that the impact of locally listed equities exchange traded funds will “definitely continue to increase” as it issues a new warning to retail investors about the systemic risks associated with the rapid growth of the local ETF market. Following a meeting of its joint supervisory committee on June 13, the Central Bank of Taiwan has published a report analysing the impact of the ETF boom on the Taiwan stock market during March and April.
/jlne.ws/4coyYuE

Miscellaneous

Canary Wharf architect quits as financial district battles exodus
Adam Mawardi – The Telegraph
Sir George Iacobescu, who masterminded Margaret Thatcher’s vision for Canary Wharf, has quit the developer as it battles an exodus of banks from the financial district. Sir George will step down as non-executive chairman of the Canary Wharf Investment Group (CWG), the owners and developers of the docklands area, after 36 years with the company. He will be replaced by City grandee Sir Nigel Wilson, the former chief executive of Legal & General, from July 1.
/jlne.ws/4cw56wr

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The Spread

Traders Betting on China Easing Boost Bearish Options on Banks

Observations & Insight Miami International Holdings, Inc. (MIH) announced that the SEC has approved MIAX Sapphire LLC's application to become a national securities exchange. MIAX Sapphire, MIH's fourth national securities exchange for U.S. multi-listed options,...

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