New Texas Stock Exchange Takes Aim at New York’s Dominance

Jun 5, 2024

First Read

Hits & Takes
John Lothian & JLN Staff

One of the results of the pivot of Cboe in closing down Cboe Digital was losing several talented executives. One of them is John Palmer, who was president of Cboe Digital, and today he was announced as part of the leadership team at IEX. Congratulations, John, on landing at IEX and to IEX on a terrific hire.

Nodal Exchange wants you to know that today, June 5, it celebrates World Environment Day. World Environment Day occurs annually and encourages awareness and action for the protection of the environment.

CFTC Chairman Rostin Behnam will give a keynote address and participate in a fireside chat at the Piper Sandler Global Exchange & Trading Conference. The event will take place on Wednesday, June 5, 2024 (today), from 12:30 p.m. to 1:30 p.m. (EDT) at The Lotte New York Palace, 455 Madison Ave, New York, NY 10022.

The New York Post is reporting, “Ben White, the chief economic correspondent for news site Politico and frequent contributor to CNBC, has died, his partner announced on social media.”

Bank of America and Theorem Technologies veteran Tom Miller has joined BornTec as its new director of business development, BornTec shared on LinkedIn.

Makenzie Billings is starting a new position as director, introducing broker clearing at Marex, she shared on LinkedIn. Makenzie was previously at CME Group for over seven years, most recently as the manager of agricultural and alternative investment products. She also spent 10 years at RJ O’Brien, including as vice president of sales and marketing.

Jelena Nedelka is starting a new position as vice president, media relations at BNP Paribas, she shared on LinkedIn. She was previously vice president of corporate communications at Blackrock and before that a senior associate of external communications at the London Stock Exchange Group. She was also at Lansing before that.

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

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Our most read stories from our previous edition of JLN Options were:
Controversial Past Shadows CME Broker’s Present: Bobby Alpert’s Clash with Open Outcry Trading and Social Media from John Lothian News.
Roaring Kitty’s GameStop options up millions, but cashing in may be tricky from Reuters via Yahoo Finance.
– Ventura Offshore lists onE*Trade Considers Kicking Meme-Stock Leader Keith Gill Off Platform from The Wall Street Journal. ~JB

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

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WAIFC Issues Groundbreaking Guide on Gender Diversity in Finance: “Women in Finance – Compendium of Good Practice”
JohnLothianNews.com

Gender equality is an issue across all business sectors. The Financial Services industry has particularly struggled despite many efforts to make progress, and the derivatives, hedge fund, and private equity areas have lagged even more so. To share practical examples of ways to attract and retain women at all levels of these organizations, and encourage companies to try new ways of addressing this critical business and social issue, the World Alliance of International Financial Centers (WAIFC) has issued a guide titled “WOMEN IN FINANCE – COMPENDIUM OF GOOD PRACTICE.”

Read the rest of the article HERE

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The Man Who Made the Futures Markets; The Chicago History Museum will honor Leo Melamed. Hear, hear.
The Editorial Board – The Wall Street Journal
Chicago isn’t a beacon for free markets these days, but the city has been home to some of the visionaries of today’s financial system. The Chicago History Museum this month is saluting one of those creators, 92-year-old Leo Melamed, whose journey is a reminder of an era when financial innovation changed the world for the better. Mr. Melamed was born in Poland, and his Jewish family fled the Nazis on the last train to Lithuania. They made their way through Siberia to Vladivostok and then Japan. They were among the few families to get U.S. visas and arrived in 1941 after a two-year journey. The family settled in a Chicago neighborhood that Mr. Melamed remembers as full of Irish, Italian and Jewish immigrants. He knew no English but made his way through public schools and John Marshall Law School. Looking for work, he saw a classified ad for Merrill Lynch, Pierce, Fenner & Beane, which he assumed was a law firm. The mistake led him to the Chicago Mercantile Exchange, where he changed the future of trading futures.
/jlne.ws/45r27n3

***** Forget Father or Founder. How about just Maker?~JJL

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DMIST Publishes Final Standard for Average Pricing
DMIST
FIA and DMIST, the Derivatives Market Institute for Standards, jointly announce today the publication of the Average Pricing Standard. This second standard published by DMIST supports the final standard for Improving Timeliness of Trade Give-ups and Allocations (30/30/30) released in June 2023. The lack of standardized average price functionality across CCPs was cited as one of the issues that prevents processing trades on Trade Date. This Average Pricing Standard calls for Central Counterparties (CCPs) globally to adopt certain minimum standard average pricing functionality. Standardized functionality will help drive consistency and improve the current allocation and timing issues associated with average price order workflows.
/jlne.ws/3yMVzmt

***** Is DMIST headquartered in London? Are they sponsored by London Fog?~JJL

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Griffin’s $12 Million Gift to NYC Hospital Targets Achy Knees; Donation to Hospital for Special Surgery adds to medical gifts; Funding will create Kenneth C. Griffin Research Accelerator
Amanda L Gordon – Bloomberg
Ken Griffin is giving $12 million to the Hospital for Special Surgery in Manhattan for a new research initiative focused on treating knee pain. Griffin’s donation will create the Kenneth C. Griffin Research Accelerator, which will work to increase the personalization of knee replacement surgery, according to a statement Tuesday. The gift will also support the HSS Kellen Tower, a 94,000-square-foot (8,733-square-meter) building currently under construction at 70th Street and FDR Drive. The tower, which is expected to open in 2025, will be the headquarters for joint replacement surgery and house the accelerator. The hospital sees more than 200,000 patient visits annually.
/jlne.ws/457wheJ

***** If you have not seen the Netflix series “A Man in Full” with Jeff Daniels and Diane Lane yet, I highly recommend it. There is a great laugh at the end that involves the robotic knee replacement Daniels’ character had.~JJL

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Tuesday’s Top Three
Our most-read story Tuesday was The Wall Street Journal’s Epstein Accuser Files Lawsuit Alleging Famed Psychiatrist Henry Jarecki Facilitated Sexual Abuse, about former metals trader Henry Jarecki. Second was Jeffrey Epstein accuser sues prominent psychiatrist Henry Jarecki for allegedly making her ‘sex slave’, from the New York Post. And third was CME Group Appoints John Ricci as Managing Director and Global Head of Agricultural Products.

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Lead Stories

New Texas Stock Exchange Takes Aim at New York’s Dominance; The TXSE has raised about $120 million to take on NYSE and Nasdaq
Corrie Driebusch – The Wall Street Journal
A group backed by Wall Street heavyweights BlackRock and Citadel Securities is planning to start a new national stock exchange in Texas, aiming to take on what they see as onerous regulation at the New York Stock Exchange and Nasdaq. The Texas Stock Exchange, which has raised approximately $120 million from individuals and large investment firms, plans to file registration documents with the Securities and Exchange Commission later this year, CEO James Lee told The Wall Street Journal. The goal is to begin facilitating trades in 2025 and host its first listing in 2026.
/jlne.ws/3yQ8Ydl

Americans Have More Investment Income Than Ever Before; A booming economy and rising household wealth help some consumers keep spending
David Uberti – The Wall Street Journal
Lynn Hogan and her husband jokingly call themselves “the turtles” after methodically investing for decades. In the current race against inflation, which has made trips more expensive and $200 grocery bills not uncommon, the mostly retired educators are among those keeping pace. Returns from slow-and-steady investments, including stock dividends, have allowed the couple outside of Decatur, Ala., to help put one of their daughters through veterinary school. “To them,” Hogan said of her adult children, “prices matter a whole lot more than to us.”
/jlne.ws/3x7hwvV

SEC Closing Salt Lake City Office After Failed Crypto Case Against Debt Box; The regulator will shift work from its smallest regional office to its Denver office
Mengqi Sun – The Wall Street Journal
The U.S. Securities and Exchange Commission said Tuesday it is closing its Salt Lake City regional office later this year, citing “significant attrition” among office staff. The Salt Lake City office is the SEC’s only regional outpost with enforcement authority for a single state. The markets regulator said it plans to move jurisdiction for Utah to its Denver office and it has no plans to close other regional offices. The announcement capped a tumultuous few months at the Salt Lake City office in connection to its failed enforcement action against cryptocurrency platform Digital Licensing, also known as Debt Box.
/jlne.ws/4aNp8Bw

SEC options probe reports rock GameStop stock after Roaring Kitty returns
Martin Baccardax – The Street
GameStop shares retreated in early Tuesday dealing but remain one of the most active names in the market, as reports suggest the Securities and Exchange Commission is looking into options trades tied to the videogame retailer and a noted investor revealed a new bet against the surging meme stock. GameStop (GME) shares added around $2 billion in market value yesterday following a 21% surge tied to weekend social-media posts from the influential retail investor Keith Gill, who is better-known as Roaring Kitty from the WallStreetbets channel on Reddit.
/jlne.ws/3RcFFbl

Fragile Banks Won’t Make the US or Europe Stronger; Officials should work together toward greater resilience, not engage in a race to the bottom.
The Editorial Board – Bloomberg
Less than 15 months after the world’s most recent banking crisis, regulators in the US and Europe are already poised to roll back reforms aimed at reducing the risk of further financial disasters. It’s a serious mistake. At issue is where banks get their money. Most is borrowed from depositors and other creditors. If it’s not paid back on time, broader distress can ensue. The rest, known as equity or capital, comes from shareholders who stand ready to absorb losses. The more of the latter banks have, the better they’re able to inspire confidence and keep lending even in the worst of times.
/jlne.ws/3KtN5D1

BlackRock and Citadel Securities back new Texas-based challenger exchange; Over a dozen investors including BlackRock and Citadel Securities have raised $120 million for the new exchange set to rival the likes of NYSE and Nasdaq.
Annabel Smith – The Trade
BlackRock and Citadel Securities have moved to support a new Texas-based contender exchange headquartered in Dallas. Designed to rival the likes of incumbent exchanges Nasdaq and NYSE in the US, Texas Stock Exchange (TXSE) has raised $120 million from around a dozen investors including BlackRock and Citadel Securities in a funding round closed in May.
/jlne.ws/3Vqo3em

BlackRock, Citadel Back Upstart Texas Challenge to NYSE, Nasdaq
Julie Fine and Shelly Hagan – Bloomberg
BlackRock Inc., Citadel Securities and other investors are backing an upstart Texas stock market to challenge to the New York Stock Exchange and Nasdaq Inc. The Texas Stock Exchange has raised $120 million and plans to file registration documents with the US Securities and Exchange Commission, according to a LinkedIn post by James Lee, the exchange’s chief executive officer.
/jlne.ws/3yVB0nz

Goldman Family Office Clients Eye Exotic Puts as Election Hedge; Look-back puts are a way to navigate volatility, Goldman says; Wealth-management executive sees ‘concern across the board’
Benjamin Stupples – Bloomberg
Goldman Sachs Group Inc.’s family office clients are considering exotic options called look-back puts as a way to navigate volatility ahead of this year’s US elections, according to a senior executive at the Wall Street giant. “There is concern across the board on US elections for family offices,” Sara Naison-Tarajano, global head of private wealth management capital markets, said in a webinar Tuesday. “We’ve been spending time on derivatives strategies like look-back puts.” The strategy, also known as hindsight options, allows investors to “look back” at the price of the underlying asset over the lifetime of the option and exercise it based on the most beneficial price. They tend to be expensive to execute and trade over the counter.
/jlne.ws/3yY5bKQ

Arbelos and B2C2 Complete First Bilateral OTC Option Transaction on BVIV Index
VolMEX Labs Corporation
Arbelos Ltd, a leading principal trading firm with a focus on cryptocurrency derivatives markets, and B2C2, a global leader in institutional liquidity for digital assets, have seamlessly completed the first bilateral option transaction on a Bitcoin volatility index, the BVIV Index (Bitcoin Volmex Implied Volatility). The BVIV Index is a real-time index published by Volmex that measures the constant, forward-looking 30-day expected volatility of BTC, derived from real-time crypto call and put options.
/jlne.ws/4bOgfcc

AI’s Power Needs Means New Nuclear Power Tech Can’t Fail, US Energy Official Says
Naureen S Malik – Bloomberg
Surging electricity demand for artificial intelligence and data centers means next-generation nuclear power “can’t fail,” according to a top US Energy Department official. David Crane, undersecretary for infrastructure at the department, said he’s now “very bullish” on emerging designs for so-called small modular reactors. That’s a significant shift from his earlier stance, when “I didn’t really see” a case for using the technology.
/jlne.ws/4eadCTv

GameStop Burned Andrew Left in 2021. He’s Betting Against the Stock Again; Short seller says he has taken a smaller position this time: ‘It’s a cult stock’
Hannah Miao and Gregory Zuckerman – The Wall Street Journal
Short seller Andrew Left can’t stay away from GameStop. His bet against the videogame retailer three years ago unleashed fury from GameStop devotees. They ordered dozens of pizzas to his house after midnight, hacked into his social-media accounts, shared his personal information, and texted threats and profanities to him and his children. As amateur traders banded together to push the stock higher, he closed out his position at a 100% loss and vowed to stop publishing short-selling reports.
/jlne.ws/3Krp9QZ

Dalio Flags US-China ‘Economic Warfare’ Among Top Global Risks; He worries about debt assets not providing adequate returns Investors should diversify across countries, asset classes
Bei Hu – Bloomberg
Ray Dalio said internal conflicts will be the “highlight of this year,” particularly on the issue of whether the US election result will be accepted by both parties. The policies from an administration run by Donald Trump would be very different from a Democratic one, Dalio said during a video speech at the Greenwich Economic Forum in Hong Kong Wednesday. However, on anti-China policies, there’s broad agreement between the two parties. “There’s a great risk of economic sanctions that would be really terrible for the world,” said the billionaire investor and founder of Bridgewater Associates.
/jlne.ws/459O19g

LMAX Group goes live with FX NDF trading in Singapore and London; New FX NDFs are traded on a central limit order book, delivering transparent price discovery and execution to all market participants.
Wesley Bray – The Trade
LMAX Group has launched FX non-deliverable forwards (NDFs) which are available to trade in two matching centres: Singapore (SG1) and London (LD4). The launch follows the Group’s global institutional FX exchange, LMAX Exchange, receiving a Recognised Market Operator (RMO) licence from the Monetary Authority of Singapore (MAS) in November last year.
/jlne.ws/3VuFvhK

Ukraine Invasion

Gazprom badly hurt by Ukraine war, says company-commissioned report; Research ordered by Russian gas group warns it may not recover lost export revenues for more than a decade
Max Seddon in Riga, Anastasia Stognei in Tbilisi and Chris Cook in London – Financial Times
Gazprom is unlikely to recover gas sales lost as a result of Vladimir Putin’s full-scale invasion of Ukraine for at least a decade, according to a report commissioned for the Russian energy group’s leaders. The company’s exports to Europe will average 50bn-75bn cubic metres a year by 2035, barely a third of prewar levels, the research predicted. Although Gazprom is hoping that a new pipeline to China can help make up for lost European export volumes, its capacity will only be 50 bcm a year and prices in the Asian nation are much lower than in Europe, the report said, while a deal over its construction has yet to be reached.
/jlne.ws/3XgZuSm

Russia Oil Revenue Rose 50% in May as Nation Adapts to Sanctions; Annual increase follows higher Urals prices, data shows; Government has trimmed 2024 oil and gas revenue outlook
Bloomberg News
Russia’s oil proceeds to the state budget increased almost 50% in May from a year ago, as its crude prices rose and the nation adapted to international sanctions. Oil-related taxes rose to 632.5 billion rubles ($7.1 billion) last month, according to Bloomberg calculations based on Finance Ministry data. Total oil and gas proceeds increased 39% to 793.7 billion rubles, the ministry said.
/jlne.ws/4c4s2CN

Russia has taken out over half of Ukraine power generation; Country’s electricity capacity has dropped below 20GW, with Russian attacks causing worst blackouts since start of war
Christopher Miller and Isobel Koshiw and Alice Hancock – Financial Times
Russia has knocked out or captured more than half of Ukraine’s power generation, causing the worst rolling blackouts since the start of its full-scale invasion in 2022. Moscow’s missile and drone attacks in recent months have homed in on Ukrainian power plants, forcing energy companies to impose nationwide shutdowns while scrambling to repair the damage and find alternative supplies.
/jlne.ws/3V2JpgA

Israel/Palestine Conflict

Risk of War Between Israel and Hezbollah Builds as Clashes Escalate; Despite efforts to keep hostilities in check, officials on both sides are sounding warnings
Dov Lieber, Adam Chamseddine and Carrie Keller-Lynn – The Wall Street Journal
Israel and Hezbollah are moving closer to a full-scale war after months of escalating hostilities with the Lebanese militant group, adding pressure on Israel’s government to secure its northern border. Hezbollah, a U.S.-designated terrorist organization closely aligned with Iran, opened a battle front with Israel on Oct. 8, a day after the deadly Hamas-led raid inside Israel sparked the current war in Gaza.
/jlne.ws/4aRBZm2

Exchanges, OTC and Clearing

DTCC’s FICC Treasury Clearing Activity Expected to Increase by Over US$4 Trillion Daily as a Result of SEC Expanded Clearing Rules, According to New Industry Feedback; Almost 30% of sell-side institutions expected to offer Treasury clearing services through their Prime Brokerage, Agency Clearing and Futures Commission Merchant business areas
DTCC
DTCC, the premier post-trade market infrastructure for the global financial services industry, today announced that daily Treasury volumes through its Fixed Income Clearing Corporation (FICC) are expected to rise by over US$4 Trillion once the SEC’s expanded U.S. Treasury clearing rules take effect, according to new industry feedback.
/jlne.ws/4bKTA0v

John Palmer to Lead New Markets at IEX, Driving Future Expansion
IEX
Taking the next step in its growth journey, IEX Group, Inc. (IEX) today announced the appointment of John Palmer to lead its efforts to build out new markets. As a member of the IEX Group, Inc. leadership team, Palmer will focus on leveraging the strengths of IEX’s core system and technology to develop new markets and expand its product innovations to create more value for IEX customers. Palmer brings exceptional experience across the financial services industry as a trading domain growth strategist. He draws from expertise across multi-asset exchange trading, derivative pricing models for equities, and leading data technology integrations that create stakeholder value. Prior to joining IEX, Palmer has held numerous leadership positions at Cboe Global Markets, most recently as President of Cboe Digital, overseeing the development of digital asset trading platforms and services.
/jlne.ws/45dVBQs

Nasdaq Dubai Welcomes USD 750 Million Debut Sustainability Sukuk Listing By Emirates Islamic
Mondovisione
The milestone issuance by Emirates Islamic highlights the growing importance of ESG principles in Islamic financing, supporting the UAE’s vision for sustainable investments. Nasdaq Dubai’s total value of bonds and Sukuk listings amounted to USD 129 billion, and the total value of ESG listings including this Emirates Islamic Sukuk reached USD 29 billion of which Sustainability issuances account for USD 9.5 billion Nasdaq Dubai welcomed the maiden Sustainability Sukuk issuance of USD 750 million by Emirates Islamic, one of the leading Islamic financial institutions in the UAE. The 5-Year issuance, which raised USD 750 million as part of the USD 2.5 billion Certificate Issuance Programme, marks a significant milestone in the bank’s sustainability journey and Islamic finance industry. With this latest admission, the total value of Sukuk listings by Emirates Islamic on the exchange reached USD 2.02 billion through four listings. The issuances reiterate Nasdaq Dubai’s growing portfolio of listed debt securities and its consistent focus on facilitating innovative financial instruments.
/jlne.ws/3VsiHzc

Intercontinental Exchange Reports May 2024 Statistics
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of technology and data, today reported May 2024 trading volume and related revenue statistics, which can be viewed on the company’s investor relations website at https://ir.theice.com/ir-resources/supplemental-information in the Monthly Statistics Tracking spreadsheet. May highlights include: Total average daily volume (ADV) up 33% y/y; open interest (OI) up 24% y/y, including record OI of 96.5M lots on May 27 Energy ADV up 35% y/y; OI up 25% y/y, including record OI of 62.5M lots on May 23 Total Oil ADV up 30% y/y; OI up 21% y/y Brent ADV up 16% y/y; OI up 12% y/y Record WTI ADV up 83% y/y; OI up 7% y/y Gasoil ADV up 20% y/y; OI up 44% y/y, including record options OI of 220k lots on May 31 Record Other Crude & Refined products ADV up 58% y/y; OI up 28% y/y, including record futures OI of 5.1M lots on May 30 Dubai ADV up 61% y/y; OI up 7% y/y Murban ADV up 160% y/y
/jlne.ws/45ahBLL

OCC May 2024 Monthly Volume Data
OCC
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Nasdaq May 2024 Volumes
Nasdaq
Nasdaq (Nasdaq: NDAQ) today reported monthly volumes for May 2024 on its Investor Relations website.
/jlne.ws/3V9DqXl

May 2024 figures at Eurex
Eurex
Eurex, Europe’s leading derivatives exchange, reports a 13 percent increase in traded contracts for May compared to the previous year, up from 142.5 million to 161.3 million contracts. Interest rate derivatives went up by 41 percent to 78.3 million contracts. Equity derivatives grew by 15 percent compared to May 2023, while index derivatives decreased 12 percent to 54.5 million traded contracts.
/jlne.ws/4c4xc1D

FTSE China Index Series Quarterly Review – Q2 2024
LSEG
FTSE Russell, a leading global index provider, has today announced the results of the FTSE China Index Series quarterly review for June 2024.
/jlne.ws/3VcKFO3

MarketAxess Announces Monthly Volume Statistics for May 2024
Business Wire
MarketAxess Holdings Inc. (Nasdaq: MKTX), the operator of a leading electronic trading platform for fixed-income securities, today announced trading volume and preliminary variable transaction fees per million (“FPM”) for May 2024. Chris Concannon, CEO of MarketAxess, commented: “In May, we delivered strong growth in total credit ADV of 11.1%, driven by a 21.8% increase in emerging markets, a 24.8% increase in Eurobonds and a 43.2% increase in municipal bonds on record municipal bond market share of 8.1%. Our estimated market share of U.S. high-grade portfolio trading was 21.8%, up from 12.8% in the prior year, and up from 15.4% in April, reflecting strong gains in portfolio trading. In May, approximately 55% of our portfolio trading volume was executed on X-Pro, as we continue the roll-out to our largest clients.”
/jlne.ws/3xe7TeN

Initial Listing of the WTI-Brent BALMO Futures Contract – Effective July 01, 2024
CME Group
New Product Summary: Initial Listing of the WTI-Brent BALMO Futures Contract – Effective July 01, 2024
/jlne.ws/4bLZK07

Ventura Offshore lists on Euronext Growth Oslo
Euronext
Euronext Oslo Børs today congratulates the oilfield service provider Ventura Offshore Holding Ltd., on its listing on Euronext Growth Oslo (ticker code: VTURA). Ventura Offshore recently entered into an agreement to buy the Brazilian company Petroserv Marine, which has operated in Brazil for 25 years. The Group focuses on deep water drilling operations in water depths up to 12,000 feet, and core activities are focused in the Brazilian offshore market. The company owns and operates the drillship “DS Carolina” and the semisubmersible rig “SSV Victoria”. It also manages the drillship “Zonda” and semisubmersible rig “Catarina.” Ventura Offshore is the third listing this year on Oslo Børs’ markets and the 17th on Euronext. Earlier this year, the company raised USD 170 million, equivalent to NOK 1.8 billion, through a private placement. The share price was set at NOK 21.01 per share at market opening, resulting in the company reaching a market value of NOK 1.8 billion on its first day of trading.
/jlne.ws/3VtB4E4

SET Partners With Stakeholders To Develop SET Carbon System For Net Zero Goal By 2050
Mondovisione
The Stock Exchange of Thailand (SET) is committed to driving sustainable capital market development towards the goal of net-zero emissions as SET marks its 50th year anniversary. In line with its 2024 strategic plan, SET has developed the SET Carbon system, which will disclose climate change management data of the capital market. By leveraging technology to manage greenhouse gas (GHG) emissions data of listed companies’ business operations, and connecting the energy and resources data from the designated agencies, SET aims to enhance the quality of Environmental, Social, and Governance (ESG) data for the benefit of data users. Recently, SET has collaborated with the Electricity Generating Authority of Thailand (EGAT) to exchange energy consumption data and streamline processes for listed companies’ data collection. The first phase of the SET Carbon system will be available for interested listed companies within the first quarter of 2025.
/jlne.ws/3yOm3DU

Fintech

Financial data group Preqin exploring a sale; S&P Global and BlackRock among potential suitors for UK-based company that could be valued at more than £1bn
Arash Massoudi, James Fontanella-Khan, Will Louch and Maria Heeter – Financial Times
Preqin, a British provider of data on private markets, is exploring a sale that could value the company at more than £1bn, according to people familiar with the matter. Goldman Sachs was advising the business, which it was marketing to interested parties, the people added. Preqin was predominantly interested in doing a deal with a larger rival or so-called strategic buyer and wanted to avoid being sold to a private equity group, they added.
/jlne.ws/4c8ftXa

Databricks to Buy Data-Management Startup Tabular in Bid for AI Clients; The deal is aimed at helping the data company gather more of enterprises’ private data as it seeks to outpace rivals in capturing AI business
Belle Lin – The Wall Street Journal
Databricks is acquiring Tabular, a data-management startup that helps companies use a variety of open-source data formats, as the company looks to win artificial intelligence customers by making it easier for them to use their own data with AI. Databricks declined to specify how much it paid for Tabular, but said the price was between $1 billion and $2 billion. The sale is expected to close before July 31, and most of Tabular’s team of about 40 will join Databricks, it said.
/jlne.ws/3KsdxNF

Musk Chose Who Got Chips Musk empire governance, OpenAI governance, Roaring Kitty’s E*Trade account, NYSE glitches, synthetic PIK fees, Peter Orszag’s office and a violin token.
Matt Levine – Bloomberg Opinion
Oh Elon. If you are the chief executive officer and controlling shareholder of two different companies, each with different minority shareholders and employees, and they both use the same essential scarce inputs, and the sole supplier of those inputs calls you up and says “we are backed up and can only meet the needs of one of your companies, which one should get the inputs and which should go without,” what should you do? The extremely obvious answer is that you should not be the CEO and controlling shareholder of two different companies that compete for the same inputs! There is not a good answer! You can’t, like, put this problem into the Good Governance Machine and have it come out clean.
/jlne.ws/3KxYYYR

Nvidia’s Latest Investment is an AI Startup Focusing on Video Search; It’s co-leading a $50 million round for Twelve Labs Inc.; The startup is trying to make searching videos easier, faster
Saritha Rai – Bloomberg
Nvidia Corp. is co-leading a $50 million investment in Twelve Labs Inc., placing its latest bet on a pair of Korean-born engineers who want to help users quickly search and analyze troves of video. US venture house New Enterprise Associates and existing backers including Radical Ventures, Index Ventures SA and Korea Investment Partners took part in the financing, the startup said in a statement. The deal sustains a frenetic pace of startup investments for Nvidia, which since 2023 has funneled capital into up-and-coming AI firms from Hugging Face and Cohere to Mistral AI.
/jlne.ws/4bIz1BV

Microsoft Backs Startup Focused on Making AI More Efficient; Touchcast caches frequently asked generative AI queries; Startup to be valued at $350 million or more after funding
Tom Giles and Saritha Rai – Bloomberg
Touchcast Inc., a startup that caches frequently asked generative artificial intelligence queries to make AI systems more efficient, is raising $100 million from venture backers, including OpenAI investor Microsoft Corp. New York-based Touchcast stores and serves up responses for commonly used AI prompts, reducing the computational resources and energy required for using models like OpenAI’s GPT-4. The aim is to help developers and businesses deploy generative AI more broadly with lower costs and faster response times.
/jlne.ws/458aH9X

Snowflake CEO Is Seeking AI Deals in Battle With Databricks, Microsoft and Amazon; Company announces expanded tools at product conference; Effort to acquire startup Reka AI stalled in recent weeks
Brody Ford – Bloomberg
/jlne.ws/3Vtl453

How will AI be regulated? The EU’s new AI Act is the first to make companies liable for the effects of large, general-purpose AI systems, but critics say regulators should only step in if needed
Richard Waters – Financial Times
/jlne.ws/4ecTPDd

Will A.I. Be a Creator or a Destroyer of Worlds?
Thomas B. Edsall – The New York Times
/jlne.ws/4eb6SVo

How an upstart is using its Nvidia ties to challenge cloud computing giants; CoreWeave benefits from jump in AI chip demand and eyes UK and Europe expansion
Tim Bradshaw – Financial Times
/jlne.ws/3yK2hcS

New speech by Julia Leung: Speech at Greenwich Economic Forum Hong Kong
SFC
A speech titled “Building a Fintech Ecosystem to Shape the Future of Finance” delivered by Ms Julia Leung at Greenwich Economic Forum Hong Kong was posted on the SFC website.
/jlne.ws/3KvX231

Cybersecurity

Hackers Targeted Celebrities on TikTok Using Private Messages
Jeff Stone – Bloomberg
Hackers targeted well known brands and celebrities on TikTok, sending a malicious link through private messages to hijack prominent accounts. The ByteDance Ltd.-owned social media service said it’s taking steps to mitigate the incident and stop it from happening again. Intruders breached the account of the cable news channel CNN, the company confirmed, though a spokesperson declined to disclose the full list of accounts that had been targeted or compromised.
/jlne.ws/4aMYc4T

U.S. Prosecutors Probe Global Hacking-for-Hire Operation; Opponents of Elliott Management and Exxon were allegedly targeted, including Argentine officials and the Rockefeller family
Christopher M. Matthews, Bradley Hope and Jenny Strasburg – The Wall Street Journal
U.S. prosecutors are seeking to extradite an Israeli private investigator from London as part of a probe into an alleged globe-spanning hacking-for-hire operation that targeted opponents of hedge-fund firm Elliott Management and oil giant Exxon Mobil, according to court documents and people familiar with the matter.
/jlne.ws/3yY2NUo

Cryptocurrencies

US Reclaims Crypto Crown on Bitcoin ETFs, Trump Rise in Polls; The US dollar retakes spot as main currency for crypto trades
Ryan Weeks – Bloomberg
The US is reclaiming its position as the undisputed top dog of cryptocurrency markets. From a crop of record-shattering Bitcoin ETFs to more accommodating regulators, swelling political donations and a rising presidential contender in crypto backer Donald Trump, signs of a US revival are suddenly everywhere. Perhaps the most telling: The dollar, which ceded its role as the most-traded currency against cryptoassets to the South Korean won in the first quarter, has come roaring back and accounted for more than 50% of global volumes in early May, according to a note from research firm Kaiko.
/jlne.ws/3x3B9F2

Saudi Arabia joins BIS-led central bank digital currency trial
Marc Jones – Reuters
Saudi Arabia has joined a major BIS-led central bank digital currency cross-border trial, in what could be another step towards less of the world’s oil trade being done in U.S. dollars. The move, announced by the Bank for International Settlements on Wednesday, will see Saudi’s central bank become a “full participant” of Project mBridge, a collaboration launched in 2021 between the central banks of China, Hong Kong, Thailand and the United Arab Emirates.
/jlne.ws/3Rfrr9A

Hacked Japan Exchange to Raise $320 Million to Buy Bitcoin
Nao Sano and Takashi Nakamichi – Bloomberg
Japanese crypto exchange DMM Bitcoin plans to raise 50 billion yen ($321 million) from group companies and plow the funds into buying the largest digital asset to make customers whole after suffering a major hack. In a statement Wednesday, the platform said it will “take care” to avoid affecting the Bitcoin market with the planned purchases and added that a probe into the cause of last week’s “unauthorized outflow” is ongoing.
/jlne.ws/3Vqko0e

Bitcoin Crosses $71K as BTC ETFs See $880M Inflows in Best Day Since March
Shaurya Malwa – CoinDesk
U.S.-listed spot bitcoin {{BTC}} exchange-traded funds (ETF) saw over $880 million in inflows on Tuesday led by Fidelity, provisional data released on Wednesday shows. Bitcoin rose over $71,000 in Asian trading hours as the data went public, adding 3% in the past 24 hours. The broad-based CoinDesk 20 (CD20), an index of the largest tokens, rose 2.65% Fidelity’s FBTC took on $378 million in inflows, the highest among counterparts. BlackRock’s IBIT followed with $270 million, while Grayscale’s GBTC – infamous for its outflows – took on $28 million.
/jlne.ws/459vrho

Ether Price Poised for Supply ‘Shock’ as ETFs May Attract $4B Inflows in Five Months, K33 Research Says
Krisztian Sandor – CoinDesk
Ethereum-based exchange-traded funds (ETF) that can directly hold ether {{ETH}} are soon arriving in the U.S. and could attract $4 billion of inflows in the first five months, crypto analytics firm K33 Research said in a report. The company based its forecast by comparing the assets under management in existing ETH-based exchange-traded products around the globe to similar bitcoin {{BTC}} products and the amount of open interest (OI) in futures contracts on the Chicago Mercantile Exchange (CME), the go-to marketplace for institutional investors.
/jlne.ws/3x0fFcj

Politics

If You Needed Reminding, Markets Aren’t the Voters; There’s too much reliance on opinion polls, for a start, and a tendency to misjudge what politicians will do once in office.
John Authers – Bloomberg
The People Have Spoken, the Markets Have Freaked
Democracy and capitalism go together, but not always comfortably. Democracy offers conditions for markets to flourish. The ability to get rid of bad leaders and the necessity for public policy to align broadly with what people want make it easier to make money. But while investors are good at gauging economic and corporate risks, political ones are harder. In particular, they tend to put more weight on opinion polls than they can bear; they’re also prone to misjudge what politicians will do once in office.
/jlne.ws/3Ky0YjP

Trump Media asks Nasdaq to cooperate with investigations into trading of its shares
Reuters
The company that owns Donald Trump’s social media platform Truth Social said on Tuesday it had requested the Nasdaq’s cooperation with any investigations into the alleged market manipulation in its shares by so-called “naked” short sellers. Devin Nunes, CEO of Trump Media & Technology Group (TMTG), in a letter to Nasdaq CEO Adena Friedman said that he has requested Congress to urge the Financial Industry Regulatory Authority (FINRA) to issue electronic blue sheets for TMTG’s trading data from April 29 through May 3 and some other dates from May and June.
/jlne.ws/4bN5eI2

Trump Lender Axos Sinks After Hindenburg Shorts Bank’s Stock
Carmen Reinicke – Bloomberg
Axos Financial Inc., which has lent to properties including former President Donald Trump’s flagship New York tower, plunged after Hindenburg Research said it was short the stock because of the bank’s exposure to problematic commercial real estate loans. Shares of the company shed 4.2% Tuesday, paring much of a loss that reached 16% intraday, after Hindenburg, the firm run by Nate Anderson, said the lender’s share price has an “aggressive” valuation compared to its peers. The slump left the stock at a seven-week low.
/jlne.ws/4ebbiM4

Nationalism threatens the world order; If America retreats from its security guarantee of Europe, the consequences for global stability will be dire
Martin Wolf – Financial Times (opinion)
I have a nightmare. The next US president declares that his country no longer stands by its commitment, under the Nato treaty, to come to the defence of a member. The Europeans fail to put together a credible replacement. Fearful of the threat from a revanchist Russia, a number switch their allegiance to Russia and China. Europe dissolves. Is this plausible? I hope not. Yet behind the nightmare is reality. We are entering a period of resurgent nationalism, xenophobia and authoritarianism.
/jlne.ws/3wRKvnu

Yellen says bill issuance not aimed at ‘sugar high’
David Lawder – Reuters
U.S. Treasury Secretary Janet Yellen on Tuesday rejected suggestions by Republican senators that the Treasury is deliberately increasing issuance of short-term Treasury bills at higher interest rates to try to stimulate the economy ahead of the November presidential election. Yellen told a U.S. Senate subcommittee hearing that Treasury’s mix of debt issuance, despite a higher share of short-term bills since the COVID-19 pandemic, is in line with historical norms and with the advice of market participants in the Treasury Borrowing Advisory Committee.
/jlne.ws/3VimOgi

US Lawmakers Accuse Nigeria of Taking Binance Executive Hostage; Tigran Gambaryan was detained on a trip to Nigeria in February; Binance, Gambaryan face charges including aiding tax evasion
Nduka Orjinmo – Bloomberg
US lawmakers accused Nigeria of taking a Binance Holdings Ltd. executive “hostage” and urged President Joe Biden to help secure his release. Sixteen Republican congressman including Chairman of the House Foreign Affairs Committee Michael McCaul wrote to Biden to have the case of Tigran Gambaryan referred to the Office of the Special Presidential Envoy for Hostage Affairs. A US citizen, Gambaryan is head of financial crime compliance at Binance and has been held at a prison in the Nigerian capital, Abuja, since April.
/jlne.ws/4c66h5L

Even Corporations Say the 2024 Political Climate Is Terrible; Survey finds 59% of policy executives say politics more tense; Gridlock in Congress makes states a bigger focus for companies
Bill Allison – Bloomberg
/jlne.ws/4cpgjzd

Green tycoon gives £5mn to Labour party for election war chest; Former Just Stop Oil donor Dale Vince urges voters not to back Greens ahead of election
Jim Pickard and Rafe Uddin – Financial Times
/jlne.ws/458m8P1

Trio of Tory donors decide against funding election campaign; Private poll by pro-Conservative companies shows Labour on track for landslide victory
Lucy Fisher – Financial Times
/jlne.ws/3Rfq5LQ

Behold the final casualties of Brexit; The referendum uncorked an insatiable populist politics that Tories hoped to co-opt. Instead, it has consumed them
Robert Shrimsley – Financial Times
/jlne.ws/3yN4BzT

Germany to Buy 20 More Eurofighters in Military Expansion; Chancellor Olaf Scholz announces planned purchase in Berlin; Government is pushing ahead with major buildup of armed forces
Michael Nienaber – Bloomberg
/jlne.ws/4c74k97

Regulation

Robert Tchenguiz argues he was a retail investor in IG Index lawsuit; The UK property tycoon is fighting a claim with the trading platform over a £6.5mn loss
Alistair Gray – Financial Times
The financier and property mogul Robert Tchenguiz has argued that he should be deemed a retail rather than professional investor in a legal battle with IG Index over a £6.5mn trading loss. The trading platform is suing Tchenguiz in London’s High Court, demanding the entrepreneur and investor cover losses that he racked up on positions in FirstGroup during an activist campaign he supported against the transport company. IG is seeking £6.5mn plus interest – as of January, worth an additional £1.36mn – from the tycoon.
/jlne.ws/3Vqyv5K

Factbox-How the SEC has bolstered the US market since the 2021 GameStop frenzy
Michelle Price – Reuters
The latest resurgence of retail trading in GameStop follows major changes aimed at boosting the resilience and transparency of the market following the 2021 “meme stock” saga. GameStop shares surged on Monday after the stocks influencer “Roaring Kitty” returned to Reddit with a post showing a $116 million bet on the embattled videogame retailer.
/jlne.ws/3Rds5V9

CFTC’s Global Markets Advisory Committee Advances Recommendations on Basel III Endgame and Variation Margin Processes; Commissioner Pham Highlights Influence & Value of GMAC Accomplishments
CFTC
The Commodity Futures Trading Commission’s Global Markets Advisory Committee (GMAC), sponsored by CFTC Commissioner Caroline D. Pham, advanced two recommendations to examine the impacts of proposed U.S. bank capital requirements and to improve collateral and liquidity management for non-centrally cleared derivatives.
/jlne.ws/3yKxD2W

Better Together: Statement of Commissioner Kristin N. Johnson Before the June 4, 2024 GMAC Meeting
CFTC
Good morning. I thank the members of the Global Markets Advisory Committee (GMAC) for your service. I wish that I could join you for your meeting this morning in New York. I want to thank Commissioner Caroline Pham for sponsoring this committee, Harry Jung, the DFO of GMAC, and Nicholas Elliot, the ADFO of GMAC. Today, I’d like to celebrate GMAC’s success as well as the success of each of the Commodity Futures Trading Commission’s (Commission or CFTC) five advisory committees. Nowhere are the efforts of each Commissioner to support all of the other Commissioners at the CFTC more evident than in our support of one another in our service as Advisory Committee sponsors. The issues facing our markets are global, complex, and require careful thinking-this is the kind of thinking that each of my fellow Commissioners and the Advisory Committees are tremendously engaged in accomplishing.
/jlne.ws/4aO0CjL

Financial Professional or Artificial Intelligence? FINRA Foundation Report Examines Which of These Consumers Trust More
FINRA
The FINRA Investor Education Foundation (FINRA Foundation) has released a new report, The machines are coming (with personal finance information). Do we trust them? Despite the growing popularity of artificial intelligence (AI), very few consumers knowingly turn to AI for information on personal finances, according to the report. “As AI continues to be integrated into consumers’ everyday lives, it is vital to get a better understanding of how they perceive it and how they are using the technology to help make financial decisions. This report found that while more consumers indicated trusting individual financial professionals than AI, there are instances where some consumers preferred AI-generated information related to topics like homeownership and saving,” said FINRA Foundation President Gerri Walsh. “These perceptions could change with time, so it will be crucial for the financial services industry to continue to better understand how consumers interact with AI to better equip them with the resources and knowledge to make sound financial decisions.”
/jlne.ws/3KrdwJM

SEC to Close Salt Lake Regional Office
SEC
The Securities and Exchange Commission today announced that it will close its Salt Lake Regional Office (SLRO) later this year, reducing its regional footprint from 11 regional offices to 10. The SLRO has long been the SEC’s smallest regional office and recently has experienced significant attrition. The agency considered its budget and organizational efficiency in deciding to close the office, and it has no plans to close any other regional offices. All current staff will be aligned to existing SEC organizational components based on their current functions and agency mission needs.
/jlne.ws/4aO8P7q

Andre Wong; SEC Charges Former Lumentum Executive with Insider Trading
SEC
Securities and Exchange Commission v. Andre Wong, Civil Action No. 1:24-cv-04231 (S.D.N.Y. filed June 3, 2024).
On June 3, 2024, the Securities and Exchange Commission filed insider trading charges against Andre Wong for unlawfully trading the securities of NeoPhotonics Corporation (“NeoPhotonics”) ahead of an announcement that his then-employer, Lumentum Holdings Inc. (“Lumentum”), had agreed to acquire NeoPhotonics.
/jlne.ws/3xbMfrx

Zhou Min Ni and Jian Ming “Jonathan” Ni, CPA; SEC Charges Former Executives of HF Foods Group with Concealing Millions of Dollars of Liabilities and Misappropriating Investor Funds
SEC
Securities and Exchange Commission v. Zhou Min Ni and Jian Ming “Jonathan” Ni, CPA, No. 1:24-cv-01632 (D.D.C. filed June 3, 2024)
The Securities and Exchange Commission yesterday charged Zhou Min Ni and Jian Ming (Jonathan) Ni, former executives of Nevada-based restaurant food distribution company HF Foods Group, Inc., for their role in a fraudulent scheme to hide millions of dollars of HF Foods’s liabilities, misappropriate investor funds, and mislead the company’s auditors.
/jlne.ws/3Vd3G3f

IOSCO Publishes Good Practices To Improve Trading Venues’ Resilience In Case Of Market Outages
Mondovisione
IOSCO has today published its final report on Market Outages. The final report addresses the need for improved preparedness and management of market outages to ensure market resilience and investor confidence. It identifies key findings from recent market outages and sets forth five good practices to assist regulators, trading venues and market participants in preparing for, and managing, future market outages and thereby helping improve market-wide resilience. The good practices cover five key areas:
/jlne.ws/3RgjO2B

Court finds Active Super made misleading ESG claims in a greenwashing action brought by ASIC
ASIC
The Federal Court has found LGSS Pty Limited, as trustee of the superannuation fund Active Super (Active Super), contravened the law in connection with various misleading representations concerning its environmental, social and governance (ESG) credentials. Active Super claimed in its marketing that it eliminated investments that posed too great a risk to the environment and the community, including gambling, coal mining and oil tar sands. Following the invasion of Ukraine, Active Super also made representations that Russian investments were “out”.
/jlne.ws/3KsTUF9

New Cost Benefit Analysis Panel to be chaired by Dr Felix Martin
FCA
Dr Martin will lead the Panel as it examines how the FCA and Payment Systems Regulator (PSR) assess the proportionality of proposed policy changes. It will provide advice to the regulators on preparing and improving CBAs. The FCA estimates around a third of its CBA will be subject to the Panel’s review. Following consultation with the panel, the FCA and PSR will publish further details on which CBAs will qualify for review in the summer.
/jlne.ws/4bJnhPj

Overview of major banks’ financial results as of March 31, 2024
FSA
Following the announcements by major banks, etc. of their financial results as of March 31, 2024, the FSA has compiled the figures, etc. announced by these banks.
/jlne.ws/4aN7D4o

SFC cooperates with BCSC in obtaining preservation orders against Leung Anita Fung Yee Maria in British Columbia, Canada
SFC
The Securities and Futures Commission (SFC) has obtained preservation orders against Ms Leung Anita Fung Yee Maria, former chief executive officer and executive director of SMI Culture & Travel Group Holdings Limited (SMI Culture & Travel Group), with the assistance of the British Columbia Securities Commission (BCSC) of Canada. The preservations orders restrain Leung and certain banks where she holds accounts from disposing of and transmitting assets and properties she holds in British Columbia, Canada (Note 1).
/jlne.ws/4c8h4ME

Investing and Trading

After $2 Trillion Surge, Nvidia Is Still Irresistible to Many; Even after massive run, investors keep buying shares; Skeptics like Rob Arnott see a market bubble destined to pop
Jeran Wittenstein – Bloomberg
Its business is massive, its profits are booming and everyone already knows Nvidia Corp. is the hottest stock on Wall Street. And yet many investors are betting the rally in the world’s most valuable chipmaker still has room to run. For more than a year, Nvidia has sailed past earnings and share-price expectations. On Sunday, the company announced plans for new chips to stay ahead of the competition. On Monday, Bank of America analysts lifted their price target, once again, to a Street-wide high of $1,500, saying Nvidia’s premium is justified by its growth outlook. On Tuesday, its stock hit a fresh record of $1,164.37.
/jlne.ws/3x3jZaF

Traders Are Desperate for Copper Deals and Miners Are Cashing In; ERG is offering large prepay deals for copper, aluminum; Hudbay offered Peru concentrate in deal that runs through 2028
Archie Hunter and Jack Farchy – Bloomberg
A heated competition for copper among some of the biggest commodity traders is creating opportunities for miners to negotiate favorable terms ranging from huge upfront payments to extra-long contracts. Recent moves by cash-flush energy traders including Mercuria Energy Group Ltd. to expand in metals – a market long dominated by Glencore Plc and Trafigura Group – are raising tensions and sparking a scramble for contracts, at a time when the industry is already facing an unprecedented supply squeeze in copper ore.
/jlne.ws/3RgjOzz

China’s Unusually Large Copper Stockpiles Fuel Demand Concerns
Bloomberg News
China’s copper inventories are growing at exactly the time of year when they should be shrinking fast – an anomaly that underscores concerns about demand in the world’s biggest market. Stockpiles of the metal held in Shanghai Futures Exchange warehouses ended last week well above 300,000 tons. That’s not the biggest volume ever, but it is the most for any end-of-May date on record. In China’s highly seasonal economy, inventories typically peak in March and slide lower as factories ramp up activity heading into the summer.
/jlne.ws/3Kt9EHY

Kendell James: The importance of algo selection in achieving best execution; Multi asset trader at Federated Hermes, Kendell James, sits down with The TRADE to explore the increasing importance of algos in achieving best execution, unpacking what the market should be prioritising when it comes to algo selection, the biggest roadblocks to adoption, and how usage is evolving.
Claudia Preece – The Trade
What should be prioritised when it comes to algo selection?
The are several key things I look for as it pertains to algo selection, first would be market access. Access to liquidity is key, algos that have access to the bulk of venues, exchanges and pools that we can have our orders exposed to is critical for optimal pricing. Second, would be historical benchmark slippage, as we target various benchmarks in our execution, staying in-line or outperforming the given benchmark is very advantageous to our overall objective as traders.
/jlne.ws/3VdzkNQ

OPEC+ Supply Move Spooks Oil Traders Still Waiting for Summer; Global physical crude traders still dealing with a supply glut; OPEC+ producers plan to gradually return barrels from October
Sherry Su, Sharon Cho, and Lucia Kassai – Bloomberg
OPEC+’s surprise decision to return oil supply to the market later this year has alarmed traders of physical cargoes, who say there’s limited evidence yet of a long-awaited improvement in the global market that would justify the move. On Sunday, the Organization of Petroleum Exporting Countries and its allies announced that eight nations within the alliance would from October gradually restore 2.17 million barrels a day of supply that they’ve been voluntarily withholding to prop up prices. Implementation of the decision will take place over a 12-month period and depends on the market at the time.
/jlne.ws/3Kwyjvs

Aluminum Producer Novelis Hits Pause on $945 Million US IPO; Indian billionaire Birla’s unit evaluating offering’s timing Mumbai equities roiled this week by surprise election result
Jason Scott – Bloomberg
Aluminum producer Novelis Inc. has postponed a plan to raise as much as $945 million in an initial public offering that would have been one of the biggest listings in the US this year. The unit of Indian billionaire Kumar Mangalam Birla’s Hindalco Industries Ltd. will continue to evaluate the timing of the offering, it said in a statement. Novelis, based in Atlanta, didn’t elaborate on the adverse market conditions that it said had led to the halting of the sale. The metals company has been on a decade-long drive to boost production capacity and is the world’s largest aluminum recycler, operating 14 scrap-processing plants across North America, Europe, Asia and South America. It’s also the world’s biggest maker of flat-rolled aluminum products ranging from cars to soda cans, and said in February it had filed confidentially for the listing with regulators.
/jlne.ws/45dBtxx

Environmental, Social and Corporate Governance

Fund Managers Poised to Embark on ESG Purge Sparked by EU Rules; Morningstar says 4,300 funds may be impacted by new guidelines; The implications are ‘significant’ for ESG, Bioy says
Frances Scwartzkopff – Bloomberg
New rules limiting how freely asset managers can attach the ESG label to funds sold in Europe promise to trigger a widespread purge across the industry, according to a fresh analysis by Morningstar Sustainalytics. Roughly 4,300 funds domiciled in the European Union that currently claim to pursue environmental, social or governance goals, or that carry similar sustainability-related labels, are potentially affected by new guidelines unveiled in May by the European Securities and Markets Authority, Morningstar Sustainalytics said on Wednesday.
/jlne.ws/4aRjXR9

Carbon Removal’s Holy Grail Cost Is Further Away Than It Seems; Companies using machines to pull carbon from the air once projected costs would drop to $100 per ton, but they’ve quietly been shifting their estimates upwards.
Michelle Ma – Bloomberg
Climeworks AG has made what it says is a breakthrough that can cut the cost to remove a ton of carbon from thin air by up to 50%. While it could be a huge leap for the company and carbon removal industry writ large, the costs are still far above the industry’s benchmark for widespread adoption. For years, researchers and founders have said $100 per ton is the key target at which using machines to capture carbon from the ambient air becomes cost-competitive. But costs remain stubbornly high and now companies are beginning to move the goalposts, which risks undercutting trust in an industry the world will almost certainly need to limit global warming.
/jlne.ws/3KvQYrh

Dow Average Gets ESG Boost From Adding Amazon; Despite the Republican assault, the sustainability rating for one of America’s premier equity benchmarks is actually improving.
Tim Quinson – Bloomberg
Almost anyone who closely tracks US financial markets these days is aware that ESG is under withering fire from the right. Republican politicians in red states like Florida and Texas have taken aggressive steps to punish companies that say they adhere to investing strategies related to environmental, social and governance factors. The GOP contends such efforts to incorporate sustainability into corporate decision making unfairly comes at the expense of fossil fuel giants and gunmakers, among others. They also claim it hurts shareholders.
/jlne.ws/45iEVqP

Nearly half of journalists covering climate crisis globally received threats for their work; Groundbreaking new research also reports that 11% of surveyed have faced physical violence in their reporting
Nina Lakhani – The Guardian
Almost four out of every 10 journalists covering the climate crisis and environment issues have been threatened as a result of their work, with 11% subjected to physical violence, according to groundbreaking new research. A global survey of more than 740 reporters and editors from 102 countries found that 43% of those threatened “sometimes” or “frequently” were targeted by people engaged in illegal activities such as logging and mining. Some 30%, meanwhile, were threatened with legal action – reflecting a growing trend towards corporations and governments deploying the judicial system to muzzle free speech.
/jlne.ws/3wU7Yo3

Banks Told to Brace for ECB Fines After Mismanaging Climate Risk
Nicholas Comfort – Bloomberg
The European Central Bank confirmed that it’s preparing to fine a number of lenders after they failed to make adequate progress in addressing risks posed to their business by climate change. “We have notified a few banks that, based on our current assessment, they have not met the interim milestones, which means they face the prospect of having to pay a so-called pecuniary penalty,” Kerstin af Jochnick, a member of the ECB’s Supervisory Board, told Cinco Dias.
/jlne.ws/3Vuba39

Over 70% of Companies Have Abandoned Acquisitions Over ESG Concerns: Deloitte Survey
Mark Segal – ESG Today
/jlne.ws/3x3FWX2

Australian Pension Fund HESTA Backs Gas For Energy Transition; CEO says fund is pushing companies for credible strategies
Amy Bainbridge – Bloomberg
/jlne.ws/3Vir2Vc

Lawsuits Targeting Plastic Pollution Pile Up as Frustrated Citizens and States Seek Accountability; New litigation from state AG offices raises the stakes in court battles focused on fighting greenwashing and misleading claims about recycling.
James Bruggers – Inside Climate News
/jlne.ws/3KvizIZ

Biden’s Chinese Tariffs Could Hamper E-Bike Sales in the U.S.; The Biden administration recently announced tariffs on a number of Chinese goods, including EVs. Price hikes could extend to e-bikes, too, experts say.
Kiley Price – Inside Climate News
/jlne.ws/3VDN8Tv

Former emerging world finance chiefs call for debt reworks to enable climate spending
Libby George – Reuters
/jlne.ws/3V6SvJj

West African nations call for firms to be able to offset carbon
Virginia Furness – Reuters
/jlne.ws/4c3XGAu

Colombian Companies Face Energy Crunch as Gas Reserves Plunge
Andrea Jaramillo – Bloomberg
/jlne.ws/3KwHQCU

Institutions

Wells Fargo Ex-CFO John Shrewsberry Readies GoodLeap for Next Growth Phase; The longtime bank executive joined the venture-backed solar financing company as CFO last year. He discusses what he brings to the process of scaling a fintech unicorn
Kristin Broughton – The Wall Street Journal
John Shrewsberry, former finance chief of Wells Fargo, is aiming to accelerate growth at GoodLeap, the solar and home-energy financing company. Shrewsberry is embarking on a new chapter at GoodLeap, which announced his appointment as chief financial officer in December. He had stepped down as Wells Fargo’s CFO in 2020 after six years in the role, and stayed on at the bank through the following spring. Most of his tenure overlapped the bank’s fake accounts scandal, and he was among the few top executives to stay in his position through that period. He continued to oversee the bank’s finances into the early days of the pandemic.
/jlne.ws/4aNlBmz

Citi’s new banking head Raghavan begins as CEO hails his ‘intensity’
Tatiana Bautzer – Reuters
Viswas Raghavan joined Citigroup as its new head of banking this week in New York, the lender said on Tuesday, after it hired the former head of investment banking from JPMorgan earlier this year. Citi’s CEO Jane Fraser has expressed high hopes for Raghavan, who climbed JPMorgan’s ranks from capital markets, as she seeks to turn around the bank and revitalize its division catering to multinational corporations.
/jlne.ws/4c657XR

ECB Vets Banks’ Private Equity Risks as Firms Face Reckoning
Sonia Sirletti, Esteban Duarte and Nicholas Comfort – Bloomberg
The European Central Bank is reviewing how the region’s biggest banks lend to the private equity industry amid a rising threat of corporate defaults. The ECB is carrying out an in-depth assessment involving about a dozen large lenders to ensure they assign appropriate default probabilities to loans made to highly indebted companies, which are often owned by private equity funds, people familiar with the matter said. Separately, the ECB is collecting data from banks on the total amount of loans that they have given to companies linked with individual buyout firms, in an effort to uncover potential concentration risks, the people said.
/jlne.ws/4bCgZRD

StepStone raises record cash pool to buy venture capital stakes; Private capital group spots opportunity to purchase discounted holdings from investors seeking exits
Antoine Gara – Financial Times
A US private capital group has raised a record pool of cash to buy stakes in existing venture capital funds at large discounts, spotting a “massive and growing opportunity” after investors became overexposed to start-up bets amid a frenzy of investment activity in 2020 and 2021. New York-based StepStone Group has closed a $3.3bn fund to buy stakes in existing VC funds from pensions, sovereign wealth investors, family offices and wealthy individuals. The fund is more than 25 per cent larger than its previous pool targeting venture fund stakes, which had been the industry’s largest.
/jlne.ws/4ecdljg

Qatar Sovereign Fund to Buy 10% of Major China Mutual Fund Firm, Reuters Says; Proposal has been submitted for China regulatory approval; Primavera’s stake worth at least $490 million, report says
Bloomberg News
Qatar’s sovereign wealth fund has agreed to buy a 10% stake in China Asset Management Co., one of the nation’s largest mutual fund firms, from private equity company Primavera Capital, Reuters reported. The Qatar Investment Authority’s proposal has been submitted to Chinese regulators for approval, the report said, citing two unidentified people. The China Securities Regulatory Commission last week said it had made a decision on whether to accept an application from ChinaAMC involving the transfer of a stake bigger than 5%, without naming the buyer or seller, according to the report.
/jlne.ws/3X9mrXC

Work & Management

The Case Against Elon Musk’s $46 Billion Pay Deal; Tesla’s board is asking shareholders to approve a substantial dilution of their stakes for no good reason
Stephen Wilmot – The Wall Street Journal
If this column had a vote, which it doesn’t, it would cast it against Elon Musk’s gargantuan pay deal at Tesla’s coming annual general meeting. Worth $46 billion at the latest share price, the chief executive’s contested 2018 packet is disproportionate in every way. It is almost 300 times as much as what America’s best-paid CEO for 2023 earned ($162 million). It is also more than twice the annual free cash flows Tesla has generated in its entire existence, including expectations for this year ($22.5 billion). And, crucially for shareholders, who would pay for it through the dilution of their holdings, it is about 8% of the company’s market value ($557 billion).
/jlne.ws/4c3uI3J

Asana introduces ‘AI teammates’ designed to work alongside human employees
Ron Miller – TechCrunch
By now most people have heard of AI agents – software that can act autonomously to undertake a series of tasks, but Asana has decided to take a different approach when it comes to AI. The company on Wednesday introduced a beta of what it’s calling ‘AI teammates,’ in a bid to help move work inside an organization. Paige Costello, head of AI at Asana, said the company chose the name deliberately to create a mental shift in terms of how people think of interacting with AI at work. “We believe that the future of work is humans not just working with humans, but humans also working with AI,” Costello told TechCrunch.
/jlne.ws/3KvbgRH

Wellness Exchange

How To Support Mental Health In Remote Teams
Eran Mizrahi – Forbes
Eran is the CEO and cofounder of ingredient brothers, a natural ingredients importer.
When your primary point of contact with employees is 30-minute Zoom calls, where little body language is visible and an upbeat smile can hide a lot, you can lose the ability to pick up on small cues that indicate mental health struggles. Remote work has been a saving grace for many professionals. Without the strain of professional morning preparations and an endless commute, the work/life ratio has finally come back into balance. But at the same time, for others, it’s made it a lot harder to keep their heads above the water in an environment where it’s harder than ever for a support system to pick up on the subtle cues of mental health distress in those struggling quietly.
/jlne.ws/3VuAGW3

Regions

Dramatic Rise in Geopolitical Risk in Focus at HK Wealth Forum; Investors should avoid trying to predict politics, Laud says; India, Mexico election results triggered market slumps
Krystal Chia and Xinyi Luo – Bloomberg
In the wake of India’s surprise election result, political risks were a big theme at the Bloomberg Wealth summit held in Hong Kong on Wednesday. Participants from UBS Group AG to Hang Lung Group Ltd. highlighted how geopolitics are on the minds of the richest investors, as they try to navigate wars in Europe and the Middle East, escalating tensions between superpowers, and a year of key elections around the world from Mexico to South Africa and the US.
/jlne.ws/3V8OqEf

Asia’s Chip Giants Hustle to Maintain Their Edge Over the U.S.; The companies and governments have know-how, willpower and supply networks that likely surpass America’s big push back into chip production
Jiyoung Sohn and Yang Jie – Financial Times
In a series of articles this week, Wall Street Journal reporters from around the world go inside the escalating global chip battle. At stake: leadership of an industry expected to double in size by the end of the decade to $1 trillion. Other installments are here and here and a visualization of the global chips battle can be found here. In early April, South Korean President Yoon Suk Yeol didn’t mince his words when describing why chips are paramount to the country’s economic survival. “The competition over semiconductors unfolding now is an industrial war,” Yoon told government and industry officials. “An all-out war between countries.”
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Elliott rebuilds stake in SoftBank and pushes for buybacks; US activist investor wants share price to reflect $180bn value of Japanese tech conglomerate’s investments
David Keohane and Leo Lewis and Arash Massoudi – Financial Times
Elliott Management has rebuilt a substantial stake in SoftBank and is pushing the Japanese tech conglomerate founded by Masayoshi Son to launch a $15bn share buyback. The US-based activist fund’s position is worth more than $2bn and it has engaged directly with SoftBank’s senior management over the past two to three months, according to people familiar with the matter.
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China’s CITIC cuts CLSA offshore banker base pay by up to 30%, sources say
Selena Li – Reuters
China’s CITIC Securities is cutting the base salary of more than 100 bankers at its offshore platform CLSA amid a drop in deal making and pressure to narrow the pay gap with its onshore operations, two people with knowledge of the matter said. In an unusual move for an industry where base pay is not subject to market conditions and bonus variations are more common, CLSA started notifying its investment bankers on Wednesday that their salary will immediately be cut by 15% to 30%, the two people said.
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Indonesia c.bank to continue intervention to stabilise rupiah
Stefanno Sulaiman – Reuters
Indonesia’s central bank will continue to intervene in the foreign exchange market to stabilise the rupiah, its governor said on Wednesday, adding that the currency would strengthen next year. The rupiah recouped some of its losses on Wednesday to stand at 16,265 a dollar by 0603 GMT, after having weakened as much as 0.46% to a four-year low of 16,290.
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ECB rate cut to breathe fresh life into Eurozone economy; Scale of boost for consumers, housing and investment will depend on how low borrowing costs can go
Martin Arnold – Financial Times
The Eurozone is set for a much-needed economic boost on Thursday when the European Central Bank is expected to start cutting interest rates for the first time in almost five years. The scale of the impetus will depend on how much further borrowing costs fall, but stubbornly high inflation driven by rapid wage growth could limit the number of rate cuts, analysts say.
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Etihad forms joint venture with China Eastern to boost growth
Aditi Shah – Reuters
Etihad Airways has formed a joint venture with China Eastern Airlines under which the carriers will coordinate flights and share revenues on selected routes, as the Abu Dhabi flag carrier looks to boost growth, its CEO told Reuters. Under the joint venture, the airlines will together manage flight capacity on chosen routes, coordinate schedules and share revenues but it will involve no equity investment or cost-sharing, Antonoaldo Neves said in Dubai.
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Nigerian lenders submitting recapitalisation plans, central bank says
Felix Onuah – Reuters
Nigerian lenders have started submitting plans to meet new minimum capital requirements to strengthen the financial system and support economic growth, the central bank said on Tuesday, after setting the standard in March. Commercial banks with international authorization must have at least 500 billion naira ($344.83 million) in capital under the new rule by the Central Bank of Nigeria. More than 20 lenders in Nigeria need to raise extra capital within two years to meet the new threshold.
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Zambia’s debt restructuring limps over line as painful test case
Marc Jones, Libby George and Karin Strohecker – Reuters
More than three-and-a-half years, or 1,300 days, after resource-rich Zambia formally declared itself bankrupt it is about to drag itself out of default, leaving some hard lessons for richer nations about how their much-vaunted debt relief plan performed. Tuesday will see its international bondholders vote through their part of a $13.4 billion debt restructuring and make Zambia the first to complete a full-blown rework under the G20-led ‘Common Framework’ architecture.
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SAP to acquire Israel-based WalkMe
Reuters
German software firm SAP said on Wednesday it will acquire WalkMe, a Saas company headquartered in Tel Aviv. Shares in the latter were up 42% in premarket indications to $13.7 at 0904 GMT, while SAP’s were broadly flat. Both companies’ boards have approved the transaction for $14 per share, a premium of 45% on WalkMe’s last closing price, they said in a joint statement.
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The Stock Market Has Rarely Been This Sleepy

Lead Stories The Stock Market Has Rarely Been This Sleepy Gunjan Banerji - The Wall Street Journal It's eerily calm out there in the stock market. The Cboe Volatility Index, or VIX, dropped below 12 last week, a nearly five-year low. The gauge, based on options prices...

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