The future of futures markets: Exchanges looking to fail fast
By Jim Kharouf, JLN
At the IOMA: World Federation Exchanges conference in Frankfurt on Friday, he said his exchange will have to speed up its business processes exponentially in the next two to three years in order to thrive. Implementing products and services from beginning to release will go from today’s 18 months to 4 days. Yes, you read that correctly. And no, no one in the audience was laughing.
“The old way was seven months of iterations of prototypes,” Preuss said. “In the world I am aiming at, the business IT and operations will start on a concept at 9 am and know by noon if that is a flop.”
Indeed, the pace of technological change and innovation is improving dramatically. In Thomas Friedman’s latest book, “Thank You for Being Late: An Optimist’s Guide to Thriving in the Age of Accelerations,” he quoted Luana Iorio, the former director of General Electric’s 3D manufacturing unit.
“The feedback loop is so short now,” Iorio said. “In a couple days you can have a concept, the design of the part, you get it made, you get it back and test whether it is valid,” and “within a week you have it produced.”
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London Metal Exchange to be run by former banker; Matthew Chamberlain faces a big challenge to revive the world’s leading metals bourse
Henry Sanderson and Neil Hume – Financial Times
A former investment banker has been appointed as the new chief executive of the London Metal Exchange, the world’s oldest metals bourse, which is battling to halt a decline in trading.
****** The youngest exchange CEO will bring a lot of energy to the job.
Direct Funding Participants; Chatting About FX Trades; You Trade, You Submit
Gary DeWaal – Bridging the Week
CME Group revised its July 2016 proposal to permit current customers of futures commission merchants to become direct clearing members of its clearinghouse without potentially incurring liability for the default of other clearing members. In addition, a major international bank agreed to pay the Federal Reserve Bank US $156.6 million related to alleged deficiencies in the bank’s oversight of its forex trading activities a few years ago, as well as its current Volcker Rule compliance program.
Michael Bloomberg to world leaders: ignore Trump on climate change; Former New York mayor defends Paris climate deal in new book; Bloomberg argues states and markets will ensure US hits emissions goals
The former New York mayor Michael Bloomberg has urged world leaders not to follow Donald Trump’s lead on climate change, and declared his own intention to stave off the “tragedy” that would be the collapse of the Paris climate deal.
***** Michael Bloomberg shared the number one rule for trading: Think for yourselves.
Adaptive Markets, by Andrew Lo ó emotional investment theory; A remarkable new paradigm puts human instinct at the heart of market behaviour
John Authers – FT
It takes a theory to beat a theory. That line returns like a leitmotif throughout Andrew Lo’s remarkable new book Adaptive Markets. It is the challenge he has been attempting to meet throughout his academic career; if the efficient markets hypothesis does not work, as many now regard as evident, can we come up with anything better?
****** How many new paradigms are at the bottom of the investment ocean?
Chess Moves: Can Exchange M&A Really Make Shareholders and Customers Happy?
Jim Kharouf – JLN
I put CBOE’s John Deters on the spot. “Do you care about your customers, John?” I asked.
“Yes, we care very much about our customers,” he replied. As chief strategy officer and head of multi-asset class solutions at CBOE Holdings, Deters really does care about them. But that is a question end users often ask about exchanges today, especially as we look at the M&A activity in the stock, futures and options space.
**In case you missed it, in Friday’s JLN.
Friday’s Top Three
We weren’t the only ones intrigued by Nassim Taleb’s workout regimen as Dealbreaker’s Nassim Nicholas Taleb Is Being Bullied By His Own Trainer was the most clicked on Friday. Second was a Bloomberg story about one industry legend reminding the Feds to stay on their toes, Paul Tudor Jones Says U.S. Stocks Should ‘Terrify’ Janet Yellen. Rounding out the top three was BI’s These are the unwritten dress codes for the major London City banks.
98,707,889 pages viewed; 22,466 pages; 205,428 edits
Here’s What Analysts Are Saying About the First Round of French Elections
Blaise Robinson, Cormac Mullen, and Eric Lam – Bloomberg
How do you say “risk-on” in French? Investors are cheering the results of the first round of voting in France’s presidential elections after centrist Emmanuel Macron and far-right nationalist Marine Le Pen emerged victorious from the five-way race.
Charts Show Traders Writing Down Chances of a Le Pen Presidency
Will Davies and Garfield Clinton Reynolds – Bloomberg
Markets trimmed their hedges against a Marine Le Pen victory Monday, judging that the outcome of France’s first-round presidential poll reduced the odds of her winning office and seeking an exit from the euro.
OCC seeks leverage ratio relief as liquidity shrinks; 85% of CCP’s volumes now short contracts on 20 biggest names, claims risk chief
Duncan Wood – Risk.net
The Options Clearing Corporation (OCC) is seeking guidance from US bank regulators that would cut capital requirements for its members, in a move prompted by shrinking liquidity at the world’s biggest equity options clearer.
Trump Puts Two Dodd-Frank Powers on Hold in Symbolic Move; The powers put on the shelf during a 180-day review
Ryan Tracy – WSJ
President Donald Trump signed three executive actions directing a review of tax and financial-regulatory policies, including a symbolic move shelving two major powers the executive branch holds under the 2010 Dodd-Frank financial overhaul law. The Wall Street oversight powersóone allowing the government to take over a failing financial firm and another empowering it to designate risky firms for stricter regulationówill be put on the shelf during a pair of 180-day reviews, officials said.
New ETF invests in industry close to home: ETFs themselves
Trevor Hunnicutt – Reuters
Exchange-traded funds have proliferated in niches ranging from cyber security to solar power and even marijuana. On Thursday, a new index fund launched that will let investors chase the growth potential of ETFs themselves.
Meet Craig Phillips, the Man in Charge of Trump’s Review of Wall Street Rules; Former BlackRock executive is helming the administration’s plan for financial deregulation
Ryan Tracy – WSJ
After Donald Trump won the presidency, Craig Phillips shifted gears. The recent retiree from BlackRock Inc. had been donating to Hillary Clinton’s campaign and angling for a job in a Democratic administration.
SEC Should Write Fiduciary Rule, Acting Chairman Says; Rule governing the advice that brokers provide retail investors has been handled by Labor Department
Dave Michaels – WSJ
Wall Street’s top regulator should craft its own rule governing the advice that stockbrokers provide to retail investors, the Securities and Exchange Commission’s acting chairman said Friday.
Investors cheer France vote as far-right vs far-left clash averted
Jemima Kelly – Reuters
The euro surged in early trading in Asia on Sunday, while French bond yields were expected to fall and French stocks to rally on Monday morning, on relief that France had not been left with a choice between two radical, anti-EU presidential candidates. Multiple projections showed centrist Emmanuel Macron and far-right leader Marine Le Pen set to face each other in a May 7 runoff for the French presidency, after coming first and second in Sunday’s first round of voting.
Virtu’s Viola seals biggest deal with military precision
Nicole Bullock and Arash Massoudi – Financial Times
Bamonte’s, the Italian restaurant in the heart of Brooklyn’s Williamsburg, is known for making a delicious seafood fra diavolo and appearing in scenes of the HBO series The Sopranos. It is also the favoured spot of one of the neighbourhood’s proud sons, Vincent “Vinnie” Viola, the billionaire founder of high-frequency trading group Virtu Financial, which this week agreed the biggest deal in its history: a $1.4bn takeover of KCG Holdings, one of its main Wall Street stock-trading rivals.
Bring Back Glass-Steagall? Goldman Sachs Would Love That
William D. Cohan – NY Times
Among the many silly ideas floating around Washington these days about how to re-regulate Wall Street is that old chestnut about separating investment banking from commercial banking.
Young hedge fund managers try to score capital at Wall Street’s version of speed dating
Leslie Picker – CNBC
Raising money for hedge funds can be hard. In an industry experiencing dismal (if any) returns and 10,000 competitors, connecting with new investors can be even more challenging. So a new type of conference has popped up in recent years to fill that void. It’s called the Context Summit. The most recent one took place in downtown Manhattan on Thursday.
No Mercy / No Malice: Losses Are the New Black
Scott Galloway – L2
The relationship between investors / shareholders and firms has largely been the same for a century: We (investors) will fund losses for 1-3 years, and then you (firm) begin making profits you distribute back to us. No more. The firms markets reward with the greatest valuations have turned this on its head and replaced profits with vision and growth. Losses are the new black.
France Delivers Euro’s Latest Existential Question
Peter S. Goodman – NY Times
It has survived enough Greek tragedy to fill out an Aeschylus trilogy and sufficient brushes with Italian banks to make an opera. It has endured a global financial shock, years of regional economic stagnation and no end of cross-border political accusations.
Indexing Pivotal in S&P Global’s Rebound From Crisis Scandal; Financial-information firm, once vilified in Congress and targeted by Dodd-Frank, now benefiting from passive investing
Ben Eisen and Alexander Osipovich – WSJ
Once vilified for its role in the financial crisis, S&P Global Inc. SPGI -0.27% is emerging as one of the biggest beneficiaries of the rise of passive investing.
Wells Fargo Directors Face Uncertain Prospects; Some on board are at risk of losing re-election; shareholder meeting is Tuesday
Emily Glazer, David Benoit and Joann S. Lublin – WSJ
The battle over Wells Fargo WFC -0.93% & Co.’s board is going down to the last possible moment, with uncertainty hanging over the re-election prospects of several directors at Tuesday’s annual shareholder meeting, according to people familiar with the matter.
Exchanges, OTC and Clearing
Deutsche Boerse wins four Global ETF Awards; Awarded for the largest number of ETFs, biggest turnover, most proactive European ETF exchange and most innovative index provider
Deutsche Boerse won four awards at this year’s Annual Global ETF Awards in New York, receiving awards for the “Most proactive ETF exchange in Europe”, “Exchange with the largest number of primary listed ETFs in Europe”, “Largest exchange for ETFs by dollar turnover in Europe” and “Most innovative ETF index provider in Europe” for its STOXX indices.
ICE reverts Daily Trading Limit for Cotton No. 2 futures
Effective at the start of trading for Monday, April 24, 2017, the Daily Trading Limit for all Cotton No. 2 futures contract delivery months (other than May 2017 contract, which will be in its notice period and therefore not subject to a price limit) will revert to 3 cents per pound (300 points) above and below the prior day Settlement Price
London Stock Exchange welcomes largest corporate bond issuance from CIS region since 2014
London Stock Exchange Group
London Stock Exchange today welcomes the listing of the largest corporate bond issuance from the CIS region since 2014. Kazakh oil and gas company, KazMunayGas, placed $2.75 billion Eurobonds in 5, 10 and 30 year tranches in London. The offer secured strong investor demand and was three times oversubscribed, with the combined order books reaching $6.5 billion.
TradingScreen signs commercial deal with Tethys Technology
Tethys Technology, a provider of financial software development for the capital markets, has announced a deal with TradingScreen, the provider of electronic trading platforms to provide its customers with Tethys’ broker-neutral algorithms for equities, futures, options and FX trading.
Discovery Communications Chooses Equinix to Enable Real-Time Content Delivery Via The Cloud
Equinix, Inc. (Nasdaq: EQIX), the global interconnection and data center company, today announced that Discovery Communications has engaged with Equinix to implement an Interconnection Oriented Architectureô (IOAô) that will enable the company to transform its digital business to a fully cloud-based, distributed model.
Blockchain, cognitive computing and cloud to shape future of finance; Servers for data storage are seen at Advania’s Thor Data Center in Hafnarfjordur, Iceland August
Anna Irrera – Reuters
Blockchain, cognitive computing and cloud are some of the technologies that will shape the finance industry the most in the digital age, banking and technology chief executives told a financial conference on Monday.
Industries Gauge Blockchain’s Promise to Unlock New Economic Value; Blockchain has the potential to transform our economic and social systems, but such a transformation is still many years away
Irving Wladawsky-Berger – WSJ
A few weeks ago I attended the IBM Blockchain Summit 2017 in New York. The Summit included presentations of concrete blockchain use cases in a number of areas, including finance, supply chains and health care. Such real-world use cases are particularly important when introducing a new, complex set of technologies into the marketplace.
Fintech lures MBAs away from banking and consulting; Salaries are less of a concern to those who aim to be agents of disruption
Jonathan Moules – FT
Before taking her place at the Wharton School, Neha Goel followed a conventional pre-MBA career path, working as a consultant at Deloitte, the professional services firm.
How the Financial Collapse Steeled Gary Cohn for the White House
William D. Cohan – Politico
Anyone who has ever worked for a Wall Street investment bank knows what it takes to get to the top of one: cunning, smarts, an ability to produce revenue and Machiavellian political skills. And that’s why it’s really no surprise, if you think about it, that two longtime former Goldman Sachs executivesóGary Cohn and Dina Powellóare finding their influence, and access, rising inside Donald Trump’s increasingly polarized White House.
Opinion: A rich Gary Cohn got even richer by working for Donald Trump; The chief economic adviser was required to sell his Goldman Sachs shares ó and he did so tax-free and with perfect timing
By BRETT ARENDS Brett Arends – MarketWatch
Donald Trump’s chief economic adviser, Gary Cohn, pocketed somewhere between $47 million and $235 million by selling his Goldman Sachs stock earlier this year.
Elizabeth Warren on Big Banks and Their (Cozy Bedmate) Regulators
Gretchen Morgenson – NY Times
Wells Fargo’s board and management are scheduled to meet shareholders at the company’s annual meeting Tuesday in Ponte Vedra Beach, Fla. With the phony account-opening scandal still making headlines, and the company’s stock underperforming its peers, it’s a good bet the bank’s brass will have some explaining to do.
SIFMA Comment on Trump Presidential Actions
SIFMA today released the following statement from Kenneth E. Bentsen, Jr., SIFMA president and CEO, regarding recently-announced presidential actions:
Memo on FSOC Non-Bank SIFI Designation Process
Trump orders review of ‘too big to fail’ regulations; Conservatives attack Dodd-Frank rules as government bailout fund for banks
Barney Jopson – FT
President Donald Trump is taking aim at “too big to fail” banks by ordering a review of post-crisis tools to deal with failing lenders following attacks from conservatives who say they enable government bailouts.
SEC Should Write Fiduciary Rule, Acting Chairman Says
Dave Michaels Biography – WSJ
Wall Street’s top regulator should craft its own rule governing the advice that stockbrokers provide to retail investors, the Securities and Exchange Commission’s acting chairman said Friday. Michael Piwowar’s comments indicate he favors the brokerage industry’s call to replace a rule issued last year by the Labor Department with one, written by the SEC, that businesses would find less onerous.
Mnuchin urges IMF to enhance FX surveillance
U.S. Treasury Secretary Steven Mnuchin on Saturday called on the International Monetary Fund to enhance surveillance of its members’ exchange rates and external imbalances, as large trade imbalances would hamper “free and fair” trade. Mnuchin said the global economy continues to exhibit large and persistent external imbalances, “which contribute to the sentiment that the existing international monetary and trading system does not benefit all.”
Sebi to consider tighter scrutiny of commodity brokers, IPOs
The Securities and Exchange Board of India (Sebi) plans to enhance surveillance of commodity brokers ahead of introducing a unified licence for intermediaries. The capital market regulator’s board will consider this issue when it meets on 26 April, two people with direct knowledge of the matter said.
Sebi lines up reforms for market, to check black money flow via P-notes
Capital markets regulator Sebi will soon put in place stricter norms to check any flow of black money into the stock market though controversy-ridden P-Notes and also initiate steps for allowing mutual fund investments through e-wallets. Besides, Sebi will consider this week new norms for allowing options trading in commodity derivative market, while rules would be relaxed for registration of foreign investors and for a common license to brokers to deal in equities and commodities, sources said.
Hong Kong’s Securities And Futures Commission Welcomes Chief Executive Officer’s Re-Appointment
The Securities and Futures Commission (SFC) welcomes the re-appointment of Mr Ashley Alder as its Chief Executive Officer for another three-year term effective from 1 October 2017
SECP orders stockbrokers investigated for market manipulation
The Securities and Exchange Commission of Pakistan on Saturday announced it had ordered an investigation into brokers suspected of market manipulation on Pakistan’s stock exchange.
Aquis and LiquidMetrix team up for MiFID II best ex and surveillance; Both parties will bring best execution TCA and surveillance under one roof for users.
Hayley McDowell – The Trade
Aquis Technologies has teamed up with Strategic Insight’s LiquidMetrix to supply its clients with transaction cost analysis (TCA) for MiFID II’s best execution rules.
MiFID II sparks Virtu’s European expansion with KCG takeover; CEO at Virtu, Doug Cifu, said MiFID II means the buy-side need an execution only agency.
Hayley McDowell – The Trade
The onset of MiFID II played a crucial role in Virtu Financial’s $1.4 billion bid for KCG and its European expansion ambitions, according to CEO Doug Cifu.
Investing and Trading
Earth Day 2017: The rise of smart sustainability
Tony Campos, Director, ESG Product Management – FTSE Russell
Earth Day 2017 is a good time to examine the rapidly growing influence of environmental, social and governance (ESG) concerns on the global economy as investors and asset owners move more actively to integrate ESG practices into their models. Increasingly, investors are treating ESG as an economic, as well as an ethical, imperative; and they are putting their money where their mouths are. For instance, CalPERS, CalSTRS and KWAP are examples of institutional investors implementing sustainable investing models and ESG allocations.
Quants Fire Back at Paul Tudor Jones After His Attack on Risk Parity
Dani Burger – Bloomberg
Paul Tudor Jones says automated trading strategies are poised to blow up the market when volatility returns. That’s not going over well at one of the biggest quant shops on Wall Street. Speaking at a closed-door Goldman Sachs Asset Management conference earlier this month, the billionaire hedge fund investor said that a portfolio strategy known as risk parity will eventually act as “the hammer on the downside” when turmoil returns to equity markets.
Shale’s the Wild Horse OPEC Can’t Tame
Julian Lee – Bloomberg
It was all so simple. By lifting restraints on output, Saudi Arabia would stop subsidizing high-cost oil producers and halt the rapid rise in U.S. production that was eating into OPEC’s market share. At least, that was the logic back in November 2014.
If you like the euro, why not just call for a global gold standard?
Matthew C Klein – FT
Before it was unfairly blamed for causing the Great Depression, genocide, and world war, the gold standard was considered not only respectable but moral, according to informed opinion. These days, informed analysts seem to agree with much of the substance of the classical gold standard, but they prefer to talk about it in starkly different ways. Perhaps we should take their arguments to their logical conclusions.
Morningstar’s New Funds Gambit: Opportunity and Controversy; Can the fund-ratings firm remain impartial as it launches mutual funds?
Beverly Goodman and Leslie P. Norton – Barron’s
The elite cadre of financial advisors and industry insiders known as the Alpha Group sat down this past week with the new CEO of arguably the most influential firm in the fund industryó Morningstar.
How a $1.4 Billion ETF Gold Rush Rattled Mining Stocks Around the World; Money pouring into funds investing in gold companies set off price gyrations in the shares
Asjylyn Loder and Chris Dieterich – WSJ
Unruly trading in the shares of some small gold companies is rekindling investor concern about the pressure that fast-growing passive funds can exert on the stocks they are meant to track.
Bond Maven Bruno Crastes Bets Against the Crowdóand on Europe; The CEO of H2O Asset Management is buying in Greece and Italy, where many other investors have stayed away
Christopher Whittall – WSJ
As bonds were plummeting at the height of the eurozone’s 2011 debt crisis, Bruno Crastes’s brand-new fund suffered steep losses and fleeing investors.
The British just went 24 hours without coal-fired electricity
Victor Reklaitis – MarketWatch
Great Britain on Friday completed a 24-your period in which it didn’t use coal to generate electricity, according to officials at the power transmission network serving England, Scotland and Wales.
Government securities are causing a headache for investors – they aren’t as safe as they once were
Risks are compounded by the fact that the entire global financial system is now underpinned by the use of government bonds as collateral to secure to financial transactions. The practice continues to be a central tenet of banking regulation, despite its role in compounding the 2008 crisis
ECB Stands Ready to Support Banks If Needed After France Vote
Jeff Black and Jana Randow – Bloomberg
European Central Bank officials signaled that their liquidity facilities remain available to counter any market tension that may arise in the aftermath of France’s presidential election, the first round of which takes place Sunday. Ignazio ViscoPhotographer: Andrew Harrer/Bloomberg
Blackrock CEO Larry Fink explains why he won’t pick an ‘heir apparent’ to take over his job
Richard Feloni – Business Insider
As the CEO and chairman of BlackRock, an investment manager with $5.1 trillion in assets under management, Larry Fink is one of the most influential people in finance. At 64, he plans on retiring at some point in the next 10 years, but as he told Bloomberg Markets in a recent interview, he hasn’t picked out a successor from among his leadership team. In a way, the choice to not pick a successor early is his succession plan.
New global fund to raise $300 million for digital currency investments
Gertrude Chavez-Dreyfuss – Reuters
Alphabit, a global fund that invests in digital currencies, has been launched with a target of $300 million, co-founder Liam Robertson said in an interview, as managers seek to tap growing demand for virtual assets that allow for instant, borderless transactions. Digital currencies such as bitcoin are issued and usually controlled by its developers, and are used by members of virtual communities.
Plato and LiquidMetrix target block trading performance; LiquidMetrix’s research team will provide TCA to develop methods of assessing block trade performance with Plato.
Hayley McDowell – The Trade
Plato Partnership has teamed up with Strategic Insight’s LiquidMetrix to research, design and implement new methodologies for assessing block trade performance.
Goldman Sachs Introduces Real-Time Employee Performance Reviews
Jennifer Surane – Bloomberg
Goldman Sachs Group Inc. introduced a new system for performance reviews this week, giving employees the ability to send and receive real-time feedback with managers throughout the year.
Goldman Environmental Prize Recipients to Be Honored; This year’s six winners said they would likely plow their $175,000 prizes back into their causes
Jim Carlton – WSJ
An East Los Angeles man who helped shut down a toxic battery recycler joined activists who blocked other industrial projects as 2017 recipients of the Goldman Environmental Prize, the green world’s highest honor.
Goldman Said to Get Burned by These Debts in Rare Trading Miss
Hugh Son, Laura J Keller and Dakin Campbell – Bloomberg
Quarterly fixed-income revenue fell short in report last week; Coal miner, jewelry retailer among sources of traders’ pain
Goldman Sachs Group Inc.’s fixed-income revenue was so unexpectedly weak in the first quarter that last week’s earnings report left the stock tumbling and Wall Street buzzing over what happened. Part of the answer is now emerging.
World’s Biggest Money Manager Could Get Bigger; The case for growth outside of ETFs
Sarah Krouse – WSJ
Assets at the world’s largest money manager have more than quadrupled to $5.4 trillion since the end of 2008, but Credit Suisse Group analysts say BlackRock has even more room to grow. Some investors have questioned the New York firm’s ability to continue to gather assets given its size. Credit Suisse analysts, however, say the New York firm’s slice of the pie is still relatively small.
Credit Suisse braced for shareholder revolt over executive pay; Voluntary pay cut failed to quell investor anger over losses at the Swiss bank
Ralph Atkins – FT
Credit Suisse is braced for a shareholder revolt this week over compensation for its top managers, despite the Swiss bank’s executive board agreeing a voluntary 40 per cent cut in its bonuses. The Swiss bank, which is the midst of a sweeping restructuring, faces criticism for not taking into account a $5.3bn settlement last year in the US over the past sale of toxic mortgage securities when deciding on bumper awards for current managers.
Former Arconic CEO Klaus Kleinfeld resigns from Morgan Stanley board
Wallace Witkowski – MarketWatch
Klaus Kleinfeld, who recently stepped down as chief executive of Arconic Inc. has resigned from the board of Morgan Stanley the investment bank said in a Securities and Exchange Commission filing late Friday. Kleinfeld departed Arconic earlier in the week after he used “poor judgment” in contacting an activist investor without authorization. Morgan Stanley said the resignation from the board was effective immediately and that Kleinfeld would not be standing for re-election at the company’s annual shareholder’s meeting in May. Morgan Stanley shares were flat at $41.80 after hours.
Credit Suisse braced for shareholder revolt over executive pay; Voluntary pay cut failed to quell investor anger over losses at the Swiss bank
Ralph Atkins – FT
Credit Suisse is braced for a shareholder revolt this week over compensation for its top managers, despite the Swiss bank’s executive board agreeing a voluntary 40 per cent cut in its bonuses.
Is Islamic finance ready for disruption? The emergence of FinTech opens a host of investment opportunities in the digital Islamic economy
Abdulla Mohammed Al Awar – Gulf News
Disruptive financial technologies represent the foundations of tomorrow on the platform of today. All we need to do is identify the best ways of leveraging these technologies to support the UAE’s economy as it embraces diversity, robust growth and sustainability.
Russia just got bumped from this list of America’s biggest enemies
Shawn Langlois – MarketWatch
Iran? Russia? Syria? Sure, there’s really no shortage of contenders for the title of America’s biggest enemy, but considering the unsettling news flow these days, North Korea’s ascension to the top of the list shouldn’t come as much of a surprise.
Fears of weak renminbi fuel Chinese household forex demand Premium; Tighter capital controls mask strong underlying demand for non-renminbi assets
FT Confidential Research
Despite the renminbi exchange rate stabilising, concerns about depreciation continue to drive strong Chinese household demand for foreign exchange.
Malaysia’s 1MDB, Abu Dhabi State Investment Fund Reach Repayment Agreement; Malaysian state investment fund to pay $1.2 billion to settle part of its dispute with Abu Dhabi sovereign fund
Bradley Hope and Tom Wright – WSJ
State investment funds in Abu Dhabi and Malaysia struck an agreement to avoid potentially embarrassing arbitration proceedings related to billions of dollars that were allegedly misappropriated by a conspiracy of former executives and advisers to both funds, according to people with direct knowledge of the deal.
JPMorgan tops ranking of best-performing asset managers in China; Number of fund companies fall out of the top-10 list as they jostle to build scale
Chris Newlands – FT
JPMorgan has been ranked as the best-performing asset manager in China, following an evaluation of 100 investment companies operating in the country.
Italians probe Emirati for alleged insider trading in UniCredit; Prosecutors looking at involvement of a former managing director of Abu Dhabi’s Ipic
Davide Ghiglione, Simeon Kerr and Caroline Binham – FT
Italian prosecutors are investigating a former Emirati sovereign wealth fund official over allegations of insider trading in UniCredit shares in 2010 as the fallout from the Malaysian 1MDB scandal spreads through Abu Dhabi’s overseas investment portfolio.
Oman to Follow Abu Dhabi With Sovereign Fund Merger Plans
Dinesh Nair and Archana Narayanan – Bloomberg
Sultanate would combine SGRF with Oman Investment Fund; Move follows Abu Dhabi’s plan to merge Mubadala and IPIC
Oman, the largest Arab oil producer outside the Organization of Petroleum Exporting Countries, is considering a merger of its two main sovereign wealth funds amid a slump in oil prices, people familiar with the matter said.
China Stocks Sink Most in Four Months Amid Leverage Crackdown
Sofia Horta E Costa and Kana Nishizawa – Bloomberg
Shanghai Composite Index falls as much as 1.9% on Monday; Regulators have stepped up campaign to curb speculation
A selloff in Chinese stocks deepened, with the benchmark gauge slumping the most in four months, amid concern authorities will step up measures to crack down on leveraged trading.
Brexit will not lead to a London exodus: Frankfurt is ‘too small’ and Paris is a ‘regulatory nightmare’
Lianna Brinded – Business Insider
The loss of passporting rights following Brexit is one of the biggest fears in the City of London, but it will not lead to an exodus of London firms moving to other major cities in the European Union.
Three Hard Lessons the Internet Is Teaching Traditional Stores; Legacy retailers have to put their mountains of purchasing data to work to create the kind of personalization and automation shoppers are getting online
Christopher Mims – WSJ
With brick and mortar stores shuttering at a record pace, retail in the U.S. feels like it’s at a tipping point. Many of the stores that once filled the malls of America have become “zombies,” while online retailers capture ever more of the most valuable consumersóthe young and affluent.