David Johnson and Dan Pritchard
Hits & Takes
Tomorrow is our last edition of the John Lothian Newsletter for 2020. We shall return on January 4, the same day everyone’s out of office notice seems to be set for. This year will not be forgotten soon.
Everyday we publish the MarketsWiki stats of the day. Our wiki site, which will hit 200 million pageviews in February most likely, ended 2019 at 170,389,321 pages viewed, 24,004 pages and 222,864 edits. Today the site stands at 196,048,856 pages viewed, 24,851 pages and 227,824 edits.
We will end the year with over 26 million pageviews, having added over 800 pages and made 5000 edits to the site during 2020. Thank you to the JLN team for their hard work during 2020 on MarketsWiki.com and JohnLothianNews.com
Charles Li said goodbye to friends, customers and colleagues in the latest Charles Li Direct post on the HKEXGroup.com website. After 11 years, he is moving on to the next chapter of his life and leaving the exchange group he helped build into a global player.
Here is a podcast featuring Crain’s Chicago Business reporter Steve Daniels talking about the big stories in banking, insurance and utilities in 2020 and telling us what he’ll be watching closely in 2021. Daniels recently replaced Lynne Marek on the Chicago financial markets beat.
We have two new donations to the JLN MarketsWiki Education GoFundMe campaign. The first is by David Johnson, retired Morgan Stanely executive and trustee for The Clearing Corporation Charitable Foundation. He is an industry leader and a great example of the type of civic leader the financial district of Chicago has produced over the decades. The second was by Dan Pritchard, an veteran industry sales and business development professional who has worked for some of the biggest names in the industry. Thank you to Dave and to Dan and all who have given and all who have yet to give. Support our efforts to preserve industry history by giving to our GoFundMe campaign.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
Collin Canright at Canright Communications has shared his best-of list with us: 5 Most-Read FinTech Rising Articles of 2020. It makes for interesting reading. Top topics include blockchain, payments trailblazers and building standards into the crypto marketplace. ~SC
Nursing Home Patients Are Dying of Loneliness; As the vaccine rolls out in nursing homes, more visits should be allowed.
The Editorial Board – NY Times
When she had the routine of home, Angie Sinopoli was the talkative matriarch of a large Italian family who heaped praise on her children and grandchildren, even as her memory faded. Her youngest son, Steven, came by her house and cooked her dinner nearly every night. But after a couple of falls and bouts in rehabilitation centers, she ended up in a Syracuse nursing home on March 10. Two days later, it stopped all visits to protect residents from the coronavirus. Mrs. Sinopoli hasn’t seen family in more than nine months. Her vocabulary has dwindled to about 20 words.
*****Safety first, but elder care has many dimensions.~SC
Notice of Annual Meeting of NFA Members and Board and Nominating Committee Election
Notice of Annual Meeting
NFA will hold its Annual Meeting of Members on Tuesday, February 2, 2021 at 10:00 a.m. Central Time, via video conferencing.
*****Here is your chance to be at the NFA annual meeting from the comfort of your own computer.~JJL
Time flies, and 2020 is nearly over. I am about to leave HKEX, where I have worked for 11 years, and turn to the next chapter in my life. My heart is full of gratitude and thanksgiving as I look back. Although the Covid-19 pandemic continues to rage around the world, I am fortunate that my family and I, and my colleagues, have been blessed with safety and health this year. While the global political and economic environment has been difficult, HKEX and Hong Kong’s financial markets have shown resilience and strength throughout the last year. This demonstrates Hong Kong’s competitiveness as an international financial centre, and its continuing relevance on the world stage. And, of course, the long-awaited arrival of Covid vaccines will soon get us all, we hope, out of the haze.
Stephen King Is Sorry You Feel Like You’re Stuck In A Stephen King Novel
Terry Gross – NPR
The horror writer says he understands why fans have said the pandemic feels like living inside one of his novels. In April 2020, King told Fresh Air that COVID-19 filled him with a “gnawing anxiety.”
*****One reason why it has been such a busy year for therapists and other mental-health professionals.~SC
Apple, Oura Devices Can Help Detect Covid-19 Early, Studies Show
Tom Giles – Bloomberg
Hi all. It’s Tom. Early this year, as the coronavirus began its rapid, deadly advance around the globe, groups of scientists in the U.S. and Europe embarked on a quest to determine whether wearable technology—devices like smartwatches, activity trackers and sensor-laden rings—could aid in detection of the illness. Those efforts, which Kristen V Brown and I covered here, are beginning to bear fruit.
*****By monitoring your temperature, your Apple watch may be able to detect COVID-19.~JJL
Tuesday’s Top Three
The top-viewed entry in the newsletter on Tuesday was the photo of John Lothian with Ryan McNally at a Globex anniversary dinner. The second most-viewed was a Bloomberg thought piece, Covid Has Transformed the Psychology of Ambition. And No. 3 was the still-popular What Happened to Maria Bartiromo?
196,048,856 pages viewed; 24,851 pages; 227,824 edits
|CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.Recently Updated Pages
1,485 pages; 13,341 edits
How NYSE’s Top Salesman Fought for IPOs in 2020; Exchange veterans say executive has helped make the Big Board more SPAC-friendly, developed direct listings
Alexander Osipovich – WSJ
During a record year for initial public offerings, John Tuttle spent five months urging companies to list on the New York Stock Exchange from his lakeside vacation house in Michigan where he took refuge during the coronavirus pandemic.
New Army of Individual Investors Flexes Its Muscle; More than 10 million new brokerage accounts were opened in 2020 as individuals piled in to bet on stocks
Caitlin McCabe – WSJ
The online brokerage industry might be hard pressed to outdo the record-breaking year it experienced in 2020, but for now, few are betting against it. Individual investors opened more than 10 million new brokerage accounts in 2020, JMP Securities estimates, a record. Interest isn’t fading, either: App downloads for brokerage firms, while lower than earlier in the year, remain resilient, with the Robinhood Markets Inc. app expected to reach 500,000 downloads in December alone, data provided by the investment bank shows. Website traffic for well-entrenched brokerages, including TD Ameritrade Holding Corp. and E*Trade Financial Corp., continues to increase as well.
Banks Pile Into Government Debt, Setting Up ‘Doom Loop’ Sequel in Europe; In Italy over 11% of the banks’ assets are in government debt, a record
Patricia Kowsmann – WSJ
European banks are doing something that got them into trouble years ago: loading up on government debt, a trade investors call the “doom loop.” Banks in the eurozone, stuffed with excess cash thanks to Covid-19 central bank relief efforts, bought close to EUR200 billion, the equivalent of $245 billion, in government debt of their home countries in the year to September. That has raised their holdings by 19% to EUR1.2 trillion, according to the European Central Bank.
How China Lost Patience With Jack Ma, Its Loudest Billionaire; While the sudden cancellation of his Ant Group IPO shocked many investors, Ma’s fall from grace had been years in the making.
Lulu Yilun Chen, Coco Liu – Bloomberg
When Jack Ma took to a Shanghai conference stage in October, China’s most famous entrepreneur was on the brink of pulling off an unprecedented $35 billion initial public offering for the finance juggernaut he co-founded two decades earlier. Ant Group Co.’s listing would value the company at more than $300 billion and swell Ma’s own fortune beyond its already blistering $61 billion, cementing his position as the nation’s richest man.
Human-Run Hedge Funds Trounce Quants in Covid Year
Hema Parmar, Katherine Burton, and Nishant Kumar – Bloomberg
Coatue, Tiger, Viking pace stock-pickers to top returns in ’20; Market tumult upended some of the best-known quant behemoths
Turns out, the hedge fund industry’s swashbucklers haven’t been made obsolete by the machines just yet. After years of being outgunned and outclassed by computer-driven quantitative strategies, human stock-pickers climbed back on top in 2020. The dizzying gyrations of the pandemic-stricken year humbled even the most sophisticated of quants — notably behemoths Renaissance Technologies and Two Sigma — whose trading models were thrown off by swings their computers had never seen before.
The Future of U.K. Banking Rests on a Process Run by European Politicians
Silla Brush and Alexander Weber – Bloomberg
The City of London is starting 2021 free of the European Union’s rules. But despite a trade deal being reached, its status as a global financial hub is under threat, resting on a separate process controlled by politicians and technocrats in Brussels known as “equivalence.” The EU granted two big equivalence decisions to the U.K. in 2020 — but with 28 areas still open, it’s unclear how much investment banking business can stay in Britain. The EU hasn’t been in any rush to come to London’s rescue, and the U.K. is signaling that it intends to veer from the bloc’s rules.
Record IPO Surge Set to Roll On In 2021; Despite the Covid recession, companies raised more than $167 billion on U.S. exchanges this year
Maureen Farrell – WSJ
Defying expectations, investors piled into initial public offerings at a record rate in 2020, and few expect the euphoria to wear off soon. When the pandemic began shutting down swaths of the U.S. economy in March and the stock market swooned, veteran IPO watchers braced for another disappointing year after activity in 2019 fell short of expectations.
Investment banking from home thrived under COVID-19, but some fear losing their touch
David French, Matt Scuffham, Krystal Hu, Imani Moise – Reuters
Cary Kochman kicked off a sale process for U.S. printing services provider InnerWorkings Inc just as lockdowns to limit the spread of the novel coronavirus took effect in March.
AstraZeneca-Oxford Covid Vaccine Gains First Clearance With U.K. Nod
Suzi Ring – Bloomberg
Vaccinations to start in new year as cases rise across Britain; Recipients to get second shot within 12 weeks of first one
AstraZeneca Plc and the University of Oxford’s Covid-19 vaccine won U.K. clearance, marking the first approval worldwide for a shot that’s faced questions but will be key to mass immunizations.
U.K.’s Mutated Coronavirus Found for First Time in U.S.
Michelle Fay Cortez – Bloomberg
New strain has been identified in more than a dozen countries; More transmissible than other strains, not seen more dangerous
A 20-something man from Colorado is the first American known to be infected with a new variant of coronavirus that emerged this fall in the U.K., raising concern that a more transmissible strain could spread widely across the country. The Colorado State Laboratory confirmed the patient had the mutated form of the virus, known as B.1.1.7, and informed the U.S. Centers for Disease Control and Prevention, Colorado Governor Jared Polis said in a statement on Twitter.
New Covid-19 Strain Puts Growing Pressure on U.K. Hospitals
Thomas Buckley – Bloomberg
Number being treated in England already exceeds April peak; Patients may be moved out of London to other counties: Report
A surge in the number of Covid-19 patients in the U.K. is overwhelming the country’s hospitals as a new and more transmissible strain infects the population at a record pace.
Covid hospital patient numbers in England surpass April peak; Boris Johnson meets ministers to decide on further restrictions
Sarah Neville, Anna Gross and Jasmine Cameron-Chileshe – FT
The number of people in hospital with Covid-19 in England has surpassed the April peak, according to official data that emerged as the UK government prepared to decide whether to tighten restrictions on millions of Britons. The high volumes are in part because of clinicians’ increasing understanding of how to treat the disease, according to NHS officials. Far more are surviving than earlier in the pandemic, but patients may require weeks on a hospital ward to recover fully, doctors noted.
Financial Rewards for College Students Could Help Curb the Pandemic; A new study suggests ways of structuring payments to persuade even impulsive students to behave more cautiously.
Seema Jayachandran – NY Times
With a dangerous winter ahead, containing the pandemic is crucial. One innovation worth trying in the months before vaccinations are widespread is to pay college students to be careful and remain free of the coronavirus.
China Has All It Needs to Vaccinate Millions, Except Any Approved Vaccines; Across the country, local governments plan to inoculate 50 million people against the coronavirus by early next year. But the vaccines have not officially been approved.
Sui-Lee Wee – NY Times
Hospitals all over China have almost everything necessary for a mass coronavirus vaccination drive: Millions of doses. Refrigerators to store them. Health care workers trained to administer them. Everything, that is, except much proof that their vaccines work.
A Chinese Covid-19 Vaccine Has Proved Effective, Its Maker Says; Sinopharm, a state-controlled company, said its candidate had a 79 percent efficacy rate in interim late-stage trials. But the announcement left crucial questions unanswered.
Sui-Lee Wee and Amy Qin – NY Times
A Chinese pharmaceutical company said on Wednesday that an early analysis of clinical trial results showed that one of its coronavirus vaccines was effective, an announcement that sent a positive signal for the global rollout of Chinese vaccines but lacked crucial details.
‘There Was a Piece Missing—We Were All White’: One Bank Targets Racial Inequity; Companies across the U.S. are pledging to hire and promote more women and people of color, in many cases saying they want to make their workplaces reflect their customers. Boston-based Eastern Bank has made sustained efforts yet still says ‘we have a long way to go.’
Ruth Simon – WSJ
Eastern Bankshares Inc. EBC 0.42% isn’t the largest bank in Boston, or the most profitable. But in its hometown—and across the country—it stands out as a company with historically white leadership where sustained efforts to promote racial diversity have taken root.
Mexico Set to Become World’s Largest Legal Cannabis Market; New law aims to boost civil liberties and curb drug cartels
People smoked marijuana outside the Congress building in Mexico City in late November. Edgard Garridor – Reuters
Juan Montes – WSJ
Mexico is home to the world’s most powerful drug cartels, who have terrorized the country for years. But the country is poised to try something different in tackling the gangs by legalizing at least one of their products: marijuana.
Politico to Acquire Energy Trade Publication E&E News; Purchase comes as Politico looks to expand its overall professional news business
Lukas I. Alpert – WSJ
Politico is adding some energy to its game. The nearly 14-year-old political news outlet is acquiring E&E News, a high-price subscription trade publication focused on the energy industry and environmental news, the companies said. The terms of the transaction weren’t disclosed.
Exchanges, OTC and Clearing
Foreign Exchange (FX) derivatives: Amendments to the Liquidity Provider scheme for ETD FX Futures and Rolling Spot Futures
Eurex Circular 104/20 Foreign Exchange (FX) derivatives: Amendments to the Liquidity Provider scheme for ETD FX Futures and Rolling Spot Futures
Trading Overview in Year 2020 & December 2020; Japan Exchange Group released Trading Overview in Year 2020 & December 2020.
Cash Equity Market – In 2020, annual trading value for the TSE 1st Section (domestic common stocks) was JPY 671.5514 trillion, the fifth-highest on record; For domestic ETFs, annual trading value was JPY 73.7322 trillion, an all- time high; In the REIT market, annual trading value was JPY 19.3669 trillion, an all- time high.
(OSE)- In 2020, total derivatives trading volume was 454,243,153 contracts, an all-time high. Among major products, Nikkei 225 mini, TOPIX Futures and Platts Dubai Crude Oil Futures recorded the highest trading volume.
Tradegate And Börse Berlin Achieve Another Record Turnover Of 401.6 Billion Euros In 2020
The united exchanges Tradegate and Berlin achieve another record result together
Volatile markets due to Corona pandemic fuel turnover in equities
Both stock exchanges expect trading to remain brisk in 2021
SIX Exchange Regulation AG Reaches An Agreement With Sika Ltd
SIX Exchange Regulation AG (SER) has reached an agreement with Sika Ltd with regard to breaches of the provisions on regular reporting obligations. In the period from July 2018 to March 2019, Sika Ltd failed to comply with its regular reporting obligations on several occasions. As part of the agreement, the company has recognised the violations of the provisions on regular reporting obligations asserted by SER and has undertaken to implement and adhere to organisational measures.
Boursa Kuwait Obtains CMA Approval To Restructure Promotion Requirements For Its “Premier Market” – New Initiative Will Help Increase Listed Companies On “Premier Market”
After the success of the “Premier Market”, which is considered the ideal destination for investors for what it offers in terms of transparency and liquidity, Boursa Kuwait has received approval from the Capital Markets Authority to restructure its promotion requirements for its “Premier Market”. The new parameters are expected to raise transparency and increase the issuer base in the “Premier Market” by potentially increasing the number of mid to large sized companies in it, all of which will reflect positively on the development of the Kuwaiti capital market and benefit its investors.
LatAm banks’ rich pickings face challenges from fintechs; Streak of profitability in region comes under pressure as rates fall and competition rises
Michael Stott – FT
Brazil’s Joseph Safra was the world’s wealthiest banker when he died earlier this month. Born in Lebanon, Mr Safra built a $23bn empire from his adopted city of São Paulo, the commercial hub of a continent which offered rich pickings in financial services. Chile’s billionaire president Sebastián Piñera was another of those who did well; he struck gold after founding a credit card company in the 1970s.
Nine Payment And Fintech Predictions For 2021
Daniel Döderlein – Forbes
At the beginning of the year, I spelled out three key payments investment themes for 2020. This was prior to the rise of the global pandemic that saw most of the year obliterated for many. However, the unexpected viral pandemic only accelerated the rate at which “alternative” payments have been thrust into the spotlight.
Regulation of Ant Group is bad for China economy, fintech
Eustance Huang – CNBC
The increasing regulatory scrutiny of Alibaba-affiliate and financial technology powerhouse Ant Group could be bad for the Chinese economy as well as China’s financial technology sector, says Andrew Collier, managing director of Orient Capital Research.
The highly-anticipated listing of Chinese tech giant Ant Group — which was set to be the world’s largest initial public offering — was abruptly suspended in November.
Slack Deal Shows Big Tech’s Handcuffs; Competing bids to Salesforce’s offer didn’t emerge, even after news of firms’ merger talks surfaced
Dan Gallagher – WSJ
One of the largest tech deals this year also shows why there might be a lot fewer of them in the future. Salesforce.com’s CRM -0.97% $27.7 billion acquisition of Slack Technologies, WORK -0.17% announced this month, was the largest to date for the hyperacquisitive cloud-software provider, as well as the second-largest deal so far in the software space—behind IBM’s acquisition of Red Hat in 2018, according to Dealogic. The high price Salesforce paid—representing 26 times Slack’s projected revenue for the next 12 months—led many to speculate that the company faced competition on the deal.
South African Bitcoin Trader Under Liquidation, Business Day Says
Roxanne Henderson – Bloomberg
A provisional liquidation order has been granted against a South African Bitcoin trading company that is said to have received about 9.45 billion rand ($644 million) from as many as 280,000 investors, Business Day reported.
Cryptocurrency XRP Is in Free Fall With Exchanges Delisting Coin
Olga Kharif – Bloomberg
XRP is down nearly 40% since being delisted by Coinbase; A slew of exchanges delisted the coin following SEC lawsuit
XRP continued its plunge after Coinbase became the latest U.S. crypto exchange to remove the world’s fourth-biggest coin in the wake of an SEC lawsuit against Ripple Labs Inc. XRP tumbled 37% Tuesday, bringing its drop to 60% in the week since securities regulators accused Ripple of issuing more than $1 billion in unregistered tokens. Coinbase said Tuesday that it will fully suspend trading XRP on Jan. 19, but will continue providing custodial services for clients.
Crypto tokens will bridge the gap between AR and reality
John Egan – WIRED UK
Lockdown significantly increased the number of hours people spend online. In the UK, the communications regulator Ofcom’s annual Online Nation report revealed that, in April 2020, UK adults spent on average four hours online every day, compared with 3.5 hours in September 2019. This has created opportunities for digital-content innovators and, in 2021, they’ll have a new way to earn money for their products.
Crypto enthusiasts could make $122K per year mining Ethereum with this setup
Sam Bourgi – CoinTelegraph
Simon Byrne has taken at-home crypto mining to a whole new level as he looks to capitalize on Ethereum’s (ETH) potential.
As first reported by Anthony Garreffa, Byrne has set up an ETH mining rig consisting of 78 GeForce RTX 3080 graphics cards. Although the RTX 3080 is marketed toward high-end PC gamers, crypto miners are using these powerful specs to enhance their capabilities.
Bitcoin mining: The next decade of sustainable crypto innovation begins today
Nangeng Zhang – CoinTelegraph
Since the creation of the first cryptocurrency over a decade ago, many have often been skeptical of their legitimacy, with some even dismissing them as a fraud. But in 2020, this paradigm seemed to have shifted. What has emerged is a shared recognition that Bitcoin (BTC) and other digital assets are here to stay and that they will play a key role in the future of global finance.
Japan’s crypto market matured in 2020, but 2021 may see huge growth
Hisashi Oki – CoinTelegraph
In 2020, the Japanese crypto industry seems to have entered its maturation phase. With new crypto laws established in May, large exchanges have solidified their leading positions, while crypto startups and unregulated businesses have exited the market. However, it seems that a winner has not yet been declared. There are already more than 25 registered exchanges in the small nation with a population of over 100 million, but global crypto giants are just starting to enter the market. Some believe a significant industry reorganization is coming through buyouts of licensed exchanges. And with the current bull market expected to continue, we may see a further expansion of crypto companies in Japan in 2021.
Crypto-Linked Stocks Extend a Rally That Has Produced 400% Gains
Kristine Owram – Bloomberg
Cryptocurrency-linked stocks rose Wednesday as Bitcoin headed for its biggest monthly gain since 2019, extending a rally that’s seen some companies’ shares more than quintuple since the end of October.
How crypto and blockchain made inroads into financial services in 2020
Bonnie McGeer – American Banker
Government officials and many bankers are wary of digital currencies because they fear bad actors will somehow exploit it to launder money and commit other acts of fraud.
But bitcoin is not going away, and blockchain technology and crypto are slowly but steadily becoming more embedded in the financial services industry.
How a Charity Superstar Innovated Its Way to Political Scandal; The Kielburger brothers courted celebrities, became voluntourism pioneers, and built a Davos-friendly model of philanthrocapitalism. Then a Canadian Covid-relief deal got people asking questions.
Natalie Obiki Pearson, Danielle Bochove, David Herbling – Bloomberg
One morning in early March, 12,000 schoolchildren and their teachers gathered in London for the world’s loudest field trip. Screams filled the cavernous SSE Arena, the party a reward for good deeds done. Through a four-hour extravaganza of strobe lights and celebrity cameos, tween-age “change makers” bopped their way through dance and musical performances interspersed with motivational speeches. Singer Leona Lewis and Sophie Grégoire Trudeau, wife of Canadian Prime Minister Justin Trudeau, talked self-empowerment. Formula One legend Lewis Hamilton spoke out, despite his day job, against climate change. There was a shoutout to Virgin Group Ltd., the main corporate sponsor. Obligingly, the kids waved their light sticks and roared.
Biden Criticizes Trump on Vaccine Distribution and Pledges to Pick Up Pace; Three weeks from taking office, Joe Biden called vaccinating Americans “the greatest operational challenge we’ve ever faced as a nation” and offered a bleak assessment of the months ahead.
Thomas Kaplan and Rebecca Robbins – NY Times
President-elect Joseph R. Biden Jr. on Tuesday criticized the speed of vaccine distribution under the Trump administration and promised to step up the pace when he takes office, while delivering a sober warning about the toll of the coronavirus pandemic.
SEC Charges Long Island City Man with Trading and Tipping Others as Part of Insider Trading Scheme
On December 22, 2020, the Securities and Exchange Commission charged Jason Peltz of Long Island City, New York with insider trading ahead of a media report about the potential acquisition of chemical manufacturer Ferro Corp. that caused the company’s stock price to climb. Peltz also tipped others to trade ahead of the news, for a collective total profit of approximately $1 million.
Commission Statement on the Passing of Jacob Stillman
Jacob (Jake) Stillman, who served the Commission for 55 years, including 17 as Solicitor, passed away last week. He was man of great character, a lawyer with unparalleled knowledge of the securities laws, and a beloved colleague.
Defense Bill Proposes to Expand SEC’s Authority in Seeking Disgorgement; The annual defense policy bill, if passed, would give the SEC the power to recover ill-gotten gains over a longer period
Mengqi Sun – WSJ
The U.S. Securities and Exchange Commission would have broadened authority to seek ill-gotten gains in enforcement actions as part of an annual defense-spending bill that is awaiting a critical Senate vote. A provision of the National Defense Authorization Act would allow the securities-markets regulator to seek—and for federal courts or administrative law judges to grant—the recovery of ill-gotten gains dating as far back as 10 years in cases involving fraud-based securities law violations. Currently, the SEC’s disgorgement power is limited to five years.
Paul Feeney appointed Chair of the FCA’s Practitioner Panel
The Financial Conduct Authority (FCA) has appointed Quilter CEO Paul Feeney as the Chair of its independent Practitioner Panel.
Singapore Supports International Efforts To Strengthen IMF Resources Amidst The COVID-19 Pandemic
The Monetary Authority of Singapore (MAS) announced today that Singapore will renew its loan commitments to support multilateral efforts to strengthen the capacity of the International Monetary Fund (IMF). These loan renewals will help boost the IMF’s resources to enable it to effectively play its role in safeguarding global economic and financial stability in response to the COVID-19 pandemic.
Quilter boss Feeney to head up FCA panel
Rachel Mortimer – FT Adviser
Advice giant boss Paul Feeney is to head up the Financial Conduct Authority’s practitioner panel next year. Mr Feeney, who has lead Quilter as its chief executive since 2012, will become chairman of the panel on January 1 having served as a member for the past five years.
Investing and Trading
US to test investor appetite with deluge of long-term Treasury sales; Analysts see ‘demand gap’ as government looks to offload $1.8tn in debt to investors
Colby Smith – FT
The US is set to flood the market with long-term bonds next year, raising questions over who will buy the debt and at what price. The Treasury department plans to sharply shift its bond sales towards debt maturing well into the future as the government seeks to fund vast spending programmes.
Why obituaries for the bull market in bonds might be premature; The case for why fixed-income assets may defy widespread expectations of a sell-off in 2021
Tommy Stubbington – FT
The 35-year bull market in bonds has survived more than its fair share of premature obituaries. As Wall Street braces itself for a fixed income sell-off next year, do not bet against it repeating the trick.
King Dollar Is Abdicating and That’s OK; The Fed’s stance means the greenback’s weakness is likely to continue, but that isn’t a disaster for investors who position themselves correctlyes to near zero.
Aaron Back – WSJ
There are many reasons to expect a weaker U.S. dollar next year and perhaps for longer, but none more important than the new policy stance of the Federal Reserve. The U.S. dollar briefly rallied in March due to its haven role in investment portfolios. Since then, it has dropped around 12% against a trade-weighted basket of currencies as the U.S. turned out to be even harder hit by the coronavirus pandemic than most major economies.
Fed, Treasury Provide One-Week Reprieve for ‘Main Street’ Program After Demand Surges; Treasury Department had earlier said program would close Dec. 31, triggering last-minute lending crush
Nick Timiraos – WSJ
The Treasury Department and Federal Reserve said Tuesday they had extended the cutoff date for the Main Street Lending Program from Dec. 31 to Jan. 8 to process a last-minute crush to deliver loans.
Environmental, Social and Corporate Governance
6 Questions Leaders Need To Ask Post-Covid. Welcome To The ESG Era
Joan Michelson – Forbes
“This is really a pivotal moment for businesses, for brands to behave the best way possible as citizens and to contribute in the best way they can for the public good, rather than to be seen as a good company,” Anne Bahr Thompson, branding expert and author of “Do Good: Embracing Brand Citizenship to Fuel Both Purpose and Profit, told me on my podcast, Green Connections Radio. “Being a citizen at this moment is far more important.”
Council Post: As Intangible Assets Grow, So Does The Role Of ESG Standards
Martin Jarzebowski – Forbes
Business titans in the late 19th and early 20th centuries were recognized for controlling critical industries of the day, including transportation, commodities and manufacturing. Many of these conglomerates dominated America’s capital market value, laying the foundation of the Dow Jones Industrial Average. As accounting frameworks evolved amid this economic backdrop, their basis was tangible assets — physical inventory, equipment, property and so on. In turn, a company’s intrinsic valuation was reflected by “book value” or defined net assets on a balance sheet. The value inherent in its intellectual capital was largely ignored.
Today’s Dirty Utilities May Be ESG Winners
Liam Denning – Bloomberg
One way to think about the ESG thing is in religious terms: Proselytizers target heathens, not the saved.
Environmental, social and governance investing today enjoys more hype than clarity. There is no agreement on exactly what counts as a compliant investment, and there is often a lack of clear economic signals tied to ESG-favored outcomes (elusive carbon pricing is a prime example). Does it make sense to invest in a company that’s already ticked a lot of ESG boxes or one that could yet do so? And how to be rewarded?
New York’s Real Climate Challenge: Fixing Its Aging Buildings; Nearly 70 percent of the city’s total carbon emissions come from buildings. A project to retrofit nine buildings with green technology is pioneering a new solution.
Patrick Sisson – NY Times
A plan to upgrade a cluster of nine unremarkable apartment buildings in Brooklyn typically would not merit a second look. But this isn’t a quick fix; the project, called Casa Pasiva, aims to be a new model for the sustainable transformation of the city’s housing stock.
Daniel Loeb’s Third Point to raise its first VC fund; Activist hedge fund steps up focus on private markets as it urges Intel to rethink manufacturing
Miles Kruppa – FT
Daniel Loeb, the hedge fund manager best known for bruising activist battles at public companies, is turning his hand to venture capitalism.
Cannabis ETF inflows jump but potential problems persist; Lack of investment-grade companies and questions over legality run counter to optimism
Madison Darbyshire – FT
This year has been a bad one for chronic anxiety, quality sleep and general optimism. As a result, perhaps, it has been a good year for the cannabis industry. Cannabis companies in the slow-growing US market have reported record sales, with queues around the block at dispensaries in states where retail sales are legal.
Global banks generate record $125bn fee haul in 2020; Capital markets businesses boosted by frenzy of share and debt sales during pandemic
Eric Platt – FT
Investment banks across the world generated a record $124.5bn in fees this year as companies raced to raise cash in order to survive the pandemic.
BGC Partners Updates its Outlook for the Fourth Quarter of 2020
BGC Partners, Inc.
BGC Partners, Inc. (NASDAQ: BGCP) (“BGC Partners” or “BGC” or the “Company”), a leading global brokerage and financial technology company, today announced that it has updated its outlook for the quarter ending December 31, 2020.
China plots ‘rectification’ drive to bring Jack Ma’s Ant Group to heel; Beijing to carve out fintech’s most lucrative units into tightly regulated holding company
Ryan McMorrow and Tom Mitchell – FT
Beijing is accelerating plans to bring Jack Ma’s Ant Group more closely under its control as part of a “rectification” drive that would make it difficult for one of China’s richest men to fully rebuild his online empire.
EU and China to agree new investment treaty; Draft deal will bring 7 years of negotiations to a successful close, but risks EU tensions with US
Jim Brunsden, Mehreen Khan and Michael Peel – FT
The EU and China are set to announce a long-awaited investment treaty, in a move that is aimed at opening up lucrative new corporate opportunities but risks antagonising president-elect Joe Biden’s incoming US administration.
China’s Top Credit Rater Barred From New Business for Three Months; Chengxin had an AAA rating on state-owned coal miner Yongcheng when it defaulted
Xie Yu – WSJ
China’s top credit-rating firm was banned from rating new bonds for three months, after an investigation found it ignored red flags at a state-owned coal miner whose default last month rattled the country’s bond market.
New Train Hall Opens at Penn Station, Echoing Building’s Former Glory; The Moynihan Train Hall, with glass skylights and 92-foot-high ceilings, will open Jan. 1 as an area for Amtrak and Long Island Railroad riders.
Christina Goldbaum – NY Times
For more than half a century, New Yorkers have trudged through the crammed platforms, dark hallways and oppressively low ceilings of Pennsylvania Station, the busiest and perhaps most miserable train hub in North America. Entombed beneath Madison Square Garden, the station served 650,000 riders each weekday before the pandemic, or three times the number it was built to handle.
Foreign investors conduct first short selling transactions in China; Banks help facilitate margin financing and securities borrowing transactions in China for global investors under the Qualified Foreign Institutional Investors (QFII) scheme.
Jon Watkins – The Trade
A number of banks have successfully facilitated margin financing and short selling (MF&SS) activities by offshore investors through China’s Qualified Foreign Institutional Investors (QFII) scheme, on the day where the first of such transactions occurred.
U.K.’s Johnson Urges Parliament to Rush Brexit Deal Into Law
Joe Mayes and Tim Ross – Bloomberg
Premier opens debate in House of Commons on EU trade agreement; MPs and Lords expected to pass the deal, which avoids tariffs
Boris Johnson urged members of Parliament to approve his Brexit trade agreement and complete Britain’s four-year divorce from the European Union. Parliament was recalled from its Christmas break for an emergency session on Wednesday to rush the deal into law in a single day, 24 hours before the U.K. leaves the EU single market and customs union.
MPs set to approve Brexit trade deal in hours; After years of acrimony, Boris Johnson insists UK will become ‘a friendly neighbour’ to EU
George Parker and Jasmine Cameron-Chileshe and Mehreen Khan – FT
The British parliament is on Wednesday expected to approve Boris Johnson’s Brexit trade deal with Brussels, recasting an often difficult relationship with the EU in a matter of hours.
Is Dairy Farming Cruel to Cows?; A small group of animal welfare scientists is seeking answers to that question. Facing a growing anti-dairy movement, many farmers are altering their practices.
Andrew Jacobs – NY Times
The 1,500 Jersey cows that Nathan Chittenden and his family raise in upstate New York seem to lead carefree lives. They spend their days lolling around inside well-ventilated barns and eating their fill from troughs. Three times a day, they file into the milking parlor, where computer-calibrated vacuums drain several gallons of warm milk from their udders, a process that lasts about as long as a recitation of “The Farmer in the Dell.”