Hits & Takes
John Lothian & JLN Staff
Welcome to Star Wars Day. May the 4th be with you! — Google
Environmental derivative firm IncubEx has raised $11.7 million in its latest fundraising round (FT). But what was more impressive was the list of entrepreneurs who invested. The names are Michael Spencer, Lance Uggla and former Deutsche Börse head Carsten Kengeter. IncubEx is a developer of financial contracts for environmental markets and is expected to float its shares in London this year. Former JLN News President Jim Kharouf is their communications director. Their timing is very good considering EU carbon prices just hit record highs at EUR50 a tonne. — FT
The pandemic is so severe in India they have suspended cricket matches. Cricket regulators suspended the Indian Premier League after multiple players contracted Covid-19. — Bloomberg
Look for a discussion on trading and best execution in derivatives, futures, options and FX next week at the virtual Capital Markets Strategies/Trading Evolved US Trading and Best Execution Summit – May 12-13, 2021. The panel will be moderated by Walter Lukken, president and chief executive officer at FIA, Inc., and panelists include David Farrell from ICE Futures U.S., Inc., Michael Golding from Optiver, Ellen Greene from SIFMA, and Joe “JJ” Kinahan from TD Ameritrade. — Capital Market Strategies
SGX is putting on a webinar titled “Trading opportunities in Indian Rupee” on May 11. It will be at 5 a.m. Chicago time. You can register HERE.
Chris Bates was a partner at Clifford Chance for 34 of his years at the firm. He is starting a new role as special counsel supporting their financial regulation practice.
We had no new donations to the JLN MarketsWiki Education GoFundMe campaign yesterday. 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
ETF.com reports that investors in U.S.-listed ETFs added $74.2 billion to the sector in April, for a total of $320.3 billion of new cash invested in the first four months of 2021, far more than the $121.1 billion seen at the same time last year. Not surprisingly given the continued stock market rally, most of the recent inflows were in U.S. equity ETFs.~SC
Credit Suisse Sued for Alleged Market Manipulation; OIC 2021 a Virtual Success – The Spread
This week on The Spread, Credit Suisse prepares for round two of a lawsuit alleging it committed market manipulation, a New York vol quant wins big on momentum trades, the OCC wins and gives awards, and more.
New Jersey to give free beer to Covid vaccine recipients
Kevin Breuninger – CNBC
New Jersey Gov. Phil Murphy on Monday announced a new bid to boost coronavirus vaccinations: Receive your first dose in May and get a free beer.
“We’re not going to be afraid to try new things,” Murphy said as he unveiled the new program, dubbed “Shot and a Beer,” at a press briefing.
*****Is it cold too?~JJL
US needs to take leadership on central bank digital currencies: former CFTC chair
Brian Cheung – Yahoo Finance
A former financial regulator says the United States needs to step up its research into a central bank-issued digital currency, as the Federal Reserve explores the viability of a digital dollar.
*****We have leadership on this and it is Chris Giancarlo. Keep pushing, Chris!~JJL
Monday’s Top Three
The top story on Monday was an article about CCPs published by the World Federation of Exchanges and written by John McPartland, Challenging Skin In the Game. The second most-clicked story was from Bloomberg, New York Roaring Back to Life, One Year After Its Nadir. And third was a still-popular tweet from @HideNot Slide that also was in the Top Three on Friday, The Chicago Board of Trade building, built in 1930 to house the CBOT’s trading pits, was the city’s tallest building until 1955 & sits at the end of LaSalle St.
204,038,175 pages viewed; 25,739 pages; 232,142 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
1,516 pages; 13,885 edits
NYSE Says More Staff Can Return to Trading Floor If Vaccinated
Lananh Nguyen – Bloomberg
The New York Stock Exchange is opening up further for vaccinated traders. Companies whose staff are based at the historic NYSE floor will be permitted to raise their headcount if 100% of employees at the site can prove they’re fully vaccinated, according to a memo from NYSE Chief Operating Officer Michael Blaugrund. The changes go into effect May 10 and are “based on improvement to public health conditions in the New York City area and the continuing progress of the nationwide vaccination rollout,” Blaugrund wrote in the memo.
Environmental derivatives firm IncubEx raises $12m in funding round; Investment is latest sign of growth in instruments such as carbon contracts
Philip Stafford – FT
A trio of financial industry veterans has invested in environmental derivatives platform IncubEx in the latest sign of the growth of trading in instruments such as carbon contracts that let companies offset their pollution.
Digital Dollar Project to launch five U.S. central bank digital currency pilots
Michelle Price – Reuters
The U.S. nonprofit Digital Dollar Project said on Monday it will launch five pilot programs over the next 12 months to test the potential uses of a U.S. central bank digital currency, the first effort of its kind in the United States. The private-sector pilots initially will be funded by Accenture Plc (ACN.N) and involve financial firms, retailers and NGOs, among others. The aim is to generate data that could help U.S. policymakers develop a digital dollar.
A reckoning for Spacs: will regulators deflate the boom? The SEC is concerned about the market for ‘blank-cheque’ companies, including optimistic projections and celebrity endorsements
Miles Kruppa and Ortenca Aliaj – FT
At the beginning of this year, the space transportation start-up Momentus thought it would be well on its way towards its stated mission of “revolutionising space infrastructure and the space economy”. Instead, regulators intervened.
Women central bankers want action on ‘hidden barriers’ to equality; Isabel Schnabel and Margarita Delgado say promotion of women is still a problem
Martin Arnold and Daniel Dombey – FT
Two of Europe’s most senior female central bankers have called for more decisive action to promote women’s careers in economics and improve decision-making at their institutions.
Robinhood responds to Buffett and Munger after they ‘insulted new generation’ of investors
Julia La Roche – Yahoo Finance
Commission-free trading app Robinhood responded to comments made by billionaire investing legends Warren Buffett and Charlie Munger on Saturday, claiming the pair “insulted a new generation” of investors for “doing things in a new way.” “If the last year has taught us anything, it is that people are tired of the Warren Buffetts and Charlie Mungers of the world acting like they are the only oracles of investing. And at Robinhood, we’re not going to sit back while they disparage everyday people for taking control of their financial lives,” Jacqueline Oritz Ramsay, head of public policy communications at Robinhood, wrote in a blog post on Monday.
Women Are Taking Top Jobs at Fund Companies, But Their Ranks Aren’t Growing; About 14% of fund managers are women. That’s the same as it was in 2000.
Liz McCormick and Katherine Greifeld – Bloomberg
Linda Zhang started managing money in 2003. At the time, a little more than 1 in 10 portfolio managers were women. Almost two decades later, that number has barely changed. Women made up about 14% of the 25,000 portfolio managers globally that run fixed-income, equity, and asset-allocation mutual and exchange-traded funds as of Dec. 31, unchanged from 2000, according to Morningstar Inc. In the U.S., about 11% are female, a share that has held constant over the past decade and is down from 14% in 2000.
Scottish Question Hangs Over U.K. Assets From Pound to Banks
Greg Ritchie and William Shaw – Bloomberg
‘Long U.K.’ trade could unravel on referendum risk, UBS warns; But ‘Mr. Brexit’ Jordan Rochester isn’t hedging for losses yet
A week that could set in motion the eventual collapse of the 314-year union between England and Scotland is concentrating City trading desks on market disasters ahead. As Scots enter a May 6 vote pitched on whether there should be a second independence referendum, fund managers and sell-side strategists see potential for massive chaos across the U.K.’s economic landscape in the years to come. Yet in an echo of the early days of the Brexit poll, few are hedging for this disruptive prospect.
The New Scottish Pound: A Haggis Stand at a Vegan Party?
Colin Lambert – The Full FX
In late February, The Full FX’ Asian correspondent Tse-Sing Gweilo argued the case for a break down in the Hong Kong dollar peg, well now that writer’s Scottish cousin is weighing in on another potential currency market issue – a Scottish pound post-independence.
Digital Dollar Project to launch five U.S. central bank digital currency pilots
Michelle Price – Reuters
The U.S. nonprofit Digital Dollar Project said on Monday it will launch five pilot programs over the next 12 months to test the potential uses of a U.S. central bank digital currency, the first effort of its kind in the United States. The private-sector pilots initially will be funded by Accenture Plc and involve financial firms, retailers and NGOs, among others. The aim is to generate data that could help U.S. policymakers develop a digital dollar.
Diversity, Inclusion & Belonging Q&A: Mizuho Americas
Mizuho Americas won the Instinet Positive Change Award for Diversity, Inclusion & Belonging at the 2021 Markets Choice Awards. Markets Media caught up with Shuji Matsuura, CEO and Chairman, Mizuho Americas, and Jerry Rizzieri, President & CEO of Mizuho Securities USA, to learn more.
Net losers? Benefits of clearing US Treasuries are cloudy; Practical obstacles and questionable netting benefits muddy the path to a clearing mandate, argues economist
Manmohan Singh – Risk.net
Does the safest asset in the world need to be made safer? That is the question regulators have set themselves as they consider reforming the US Treasury market, in the wake of unprecedented volatility witnessed a year ago amid the coronavirus crisis – a move that could result in a shift to mandatory clearing.
Chinese banks accused of funding deforestation around world; Report undermines Beijing’s drive to be seen as global leader in climate change campaign
Christian Shepherd and Thomas Hale – FT
Chinese banks are the second largest financers of commodities implicated in tropical rainforest deforestation, according to research that casts doubt on Beijing’s ambitions to be a global leader in the fight against climate change.
Cash-rich US banks move to reduce corporate deposits; JPMorgan Chase and Citigroup take unusual step to avoid additional capital requirement
Imani Moise – FT
A wave of cash flooding bank balance sheets during the pandemic has prompted some of the largest US lenders to take the unusual step of advising corporate clients to move money out of deposits.
Cautious German Savers Brave the Stock Market
Patricia Kowsmann – WSJ
Michael Schacht, 70 years old, is a typical German saver. Risk-averse, the clothing-shop owner kept the equivalent of $300,000 in a local bank in a small town near Hamburg.
Then, earlier this year, Mr. Schacht’s bank told him it wanted to charge him a negative 0.5% interest rate to hold his money.
The Man With More SPACs Than Anyone
Maureen Farrell – WSJ
Alec Gores has built a SPAC machine.
The billionaire investor, who first tried his hand at the unconventional reverse-merger IPO process in 2015, has watched the market for SPACs reach a fever pitch over the last two years. As the market swelled, he became a serial SPAC backer. He has methodically created 13 special-purpose acquisition companies, more than any other single investor, according to data provider SPACInsider.
WSJ CEO Council Features Interviews With Janet Yellen, Jamie Dimon
The Wall Street Journal is hosting its CEO Council summit Tuesday with top executives, administration officials and policy experts, as the Covid-19 vaccine rollout continues world-wide but some countries, notably India, face a surge in cases.
The gathering comes as the U.S. economy is poised for a sharp rebound this year, and the new Biden administration recently hit its 100-days mark, with large infrastructure and antipoverty proposals in the works.
It’s Not Just India. New Virus Waves Hit Developing Countries
Jinshan Hong, Randy Thanthong-Knight, and Jason Scott – Bloomberg
Laos, Nepal and Thailand risk facing India-like Covid crisis; Situation in India can happen anywhere, WHO’s Hans Kluge says
It’s not just India. Fierce new Covid-19 waves are enveloping other developing countries across the world, placing severe strain on their health-care systems and prompting appeals for help.
India Crisis Reveals Complacency and Lack of Foresight, Rajan Says
Kathleen Hays and Ramsey Al-Rikabi – Bloomberg
Former RBI chief says central bank ‘accommodative as possible’; U.S. Fed may ‘rethink’ policies, which could surprise markets
India’s overwhelming surge of coronavirus infections has revealed complacency after last year’s first wave, as well as a “lack of foresight, a lack of leadership,” according to Raghuram Rajan, former governor of the country’s central bank.
Singapore Tightens Virus Rules in India Variant Cluster Fallout
Philip Heijmans – Bloomberg
Group gatherings cut down to five people for three weeks; Variants are causing larger clusters; more infectious: Wong
Singapore is limiting social gatherings to a maximum of five people and tightening border curbs as it reacts aggressively to a flareup linked to the new variant first identified in India, a setback to one of the world’s most successful virus containment regimes.
Vietnam Extends Quarantine Past 14 Days After India Variant Found
Nguyen Dieu Tu Uyen and Xuan Quynh Nguyen – Bloomberg
Vietnam is keeping people in quarantine centers longer than the 14-day period in its latest step to prevent the spread of coronavirus amid the emergence of cases being traced to overseas travelers.
Hong Kong Reviews Mandatory Vaccination for Domestic Workers
Chloe Lo and Felix Tam – Bloomberg
Hong Kong is reviewing a decision to make Covid-19 vaccinations mandatory for foreign domestic workers after the decision set off a wave of criticism in the Asian financial hub. Although officials have been concerned about several local cases involving virus variants, Hong Kong Chief Executive Carrie Lam said they were currently reexamining the policy after complaints.
To Mars Wrigley, Getting High on ‘Medicated’ Skittles Is No Joke
Christopher Yasiejko – Bloomberg
Knockoff Starburst and Life Savers infused with THC, suit says; Lawsuit names Californians who sell the edibles online
Mars Inc.’s Wrigley unit, owner of the Skittles, Starburst and Life Savers brands, sued the owners of several online shops to block them from selling THC-infused products that infringe trademarks for the candy maker’s iconic products. Wrigley cited the sale of “Medicated Skittles,” “Starburst Gummies” and “Life Savers Medicated Gummies” as examples of what it said were trademark infringement and dilution, and unfair competition.
Fauci warns against discarding trade rules on Covid vaccines; Biden senior adviser says move would spark legal disputes and delay inoculation campaigns
Kiran Stacey – FT
One of Joe Biden’s top coronavirus advisers has warned that forcing drug companies to abandon intellectual property rights to Covid-19 vaccines risks backfiring if it leads to long legal disputes.
Germany to loosen Covid restrictions for vaccinated people; Critics say lifting curfews and limits on gatherings discriminates against younger generation yet to be inoculated
Guy Chazan – NYSE
Germany is to lift restrictions on people who have been vaccinated against Covid-19 as early as this week, in a move that some critics say discriminates against younger people who are still months away from getting the jab.
US companies with ties to India stepped in for Covid aid effort; Some business groups say Biden administration was distracted during critical week when cases were climbing steeply
Kiran Stacey and Katrina Manson and Richard Waters – FT
The Biden administration’s initial response to the second coronavirus wave in India alarmed US business leaders with strong ties to the country, some of whom mobilised their own aid efforts for fear that Washington was acting too slowly.
US set to approve Pfizer Covid vaccine for 12- to 15-year-olds; Regulators to give green light to inoculate adolescents in coming days
Kiran Stacey – FT
The US is set to approve the BioNTech/Pfizer Covid-19 vaccine for use in 12- to 15-year-olds in the coming days, according to people involved in the regulatory process.
States Roll Back Restrictions as Covid-19 Cases Decline; Health experts say Americans need to continue to follow public-health guidance and states need to push vaccinations
Melanie Grayce West – WSJ
With more than 40% of all U.S. adults fully vaccinated and the daily number of new Covid-19 cases declining, governors across the U.S. are broadly rolling back restrictions implemented during the pandemic. On Monday, governors from New York and New Jersey said their states would on May 19 lift most capacity restrictions at places of business.
Pfizer Reaps Hundreds of Millions in Profits From Covid Vaccine; The company said its vaccine generated $3.5 billion in revenue in the first three months of this year.
Rebecca Robbins and Peter S. Goodman – NY Times
Last year, racing to develop a vaccine in record time, Pfizer made a big decision: Unlike several rival manufacturers, which vowed to forgo profits on their shots during the Covid-19 pandemic, Pfizer planned to profit on its vaccine.
Covid-19 Vaccinations Are Slowing, So Officials Target Markets, Schools
Melanie Grayce West and Talal Ansari – WSJ
There are 15 different places to get a Covid-19 vaccine in Louisiana’s Vernon Parish. Most locations have plenty of shots, and residents can even stop by the fairgrounds for one of the pop-up vaccine clinics. The only thing lacking is customers, said Rick Allen, mayor of Leesville, the parish seat. It isn’t access, or availability, or a lack of transportation or education that is keeping the vaccination rate in the area to roughly 12%, he said. “It’s a lack of trust,” said Mr. Allen. “The only thing that will overcome that is time.”
Exchanges, OTC and Clearing
MGEX Reports the Second Best Month in History
MGEX, a Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO), reports that April 2021 closed as the second best month in Exchange history with a grand total of 322,207 contracts traded. This past month was the best April in history, beating the previous record holder April 2018 by over 50,000 contracts.
MEMX Breaks Multiple Monthly, Daily Records as It Climbs to 6th Largest Exchange in U.S.
MEMX, a market operator founded by a diverse group of participants to benefit all investors, today announced multiple performance records, including scaling the exchange market share ranks to close out April as the 6th largest of the 16 U.S. equity exchanges. MEMX is the fastest growing equities exchange in the country, with monthly double digit increases in average daily trading volume.
Dubai Gold and Commodities Exchange says Israeli firms can join
The Dubai Gold & Commodities Exchange (DGCX) said on Sunday qualified Israeli companies could now join and use its trading services and platforms.
Cboe To Enter ESG Space
Shanny Basar – MarketsMedia
Cboe Global Markets said the exchange group will work with its partners to develop environmental, social and governance data and tradable products. Ed Tilly, chairman, president and chief executive of Cboe Global Markets, said on the first quarter results call that ESG is top of mind for the firm and all its associates. He said: “This is a big deal for us.”
BME welcomes Ecoener; The renewable energy company is the second to join the Spanish stock exchange this year.
BME today welcomed Ecoener. Luis de Valdivia, CEO of the company, led the traditional bell ringing, which was hosted by David Jiménez Blanco, Chairman of the Madrid stock exchange, Vice-Chairman of BME and Member of SIX’s Board of Directors. The company set an initial price of 5.90 euros per share, which represents a value of 336 million euros.
CME Group Reports April 2021 Monthly Market Statistics
CME Group, the world’s leading and most diverse derivatives marketplace, today reported April 2021 market statistics, including average daily volume (ADV) of 16.4 million contracts during the month. Market statistics are available in greater detail at https://cmegroupinc.gcs-web.com/monthly-volume.
Volue lists on Oslo Børs
Euronext today congratulates Volue on its transfer from Euronext Growth to Oslo Børs. Volue is an international provider of business-critical software and technology services for the energy, power grid and infrastructure markets. The company was listed on Euronext Growth Oslo in October 2020.
OboTech Acquisition SE has been listed on the regulated market in Frankfurt since today
Deutsche Börse Group
OboTech Acquisition SE (ISIN: LU2334363566 ) has been listed on the regulated market ( General Standard ) of the Frankfurt Stock Exchange since today . The company is a SPAC – a Special Purpose Acquisition Company. According to the issuer, the aim of the issuer is to acquire an operating company with main business operations in a member state of the European Economic Area, in Great Britain or Switzerland in the fields of real estate technology (“Proptech”) and air conditioning technology (“Climatech”) within a specified period of time.
KATEK SE new in the Prime Standard of the Frankfurt Stock Exchange
Deutsche Börse Group
KATEK SE (ISIN: DE000A2TSQH7 ) has been listed in the Prime Standard of the Frankfurt Stock Exchange since today . At the start of trading, the shares were quoted at EUR 27.90. The issue price was 23.00 euros.
NON-MEMBER: Vattenfall Energy Trading Gmbh
NYMEX RULE VIOLATION: 562. Position Limit Violations (in part)
PENALTY: In accordance with the settlement offer, the Panel ordered Vattenfall to pay a fine in the amount of $25,000 and disgorge profits in the amount of $1,440.00.
NON-MEMBER; Kevin Howard
NYMEX RULE VIOLATION: NYMEX RULE 575.D. DISRUPTIVE PRACTICES PROHIBITED
PENALTY: In accordance with the settlement offer, the Panel ordered Howard to pay a fine to the Exchange in the amount of $50,000 and serve a five business day trading suspension from access to any trading floor owned or controlled by CME Group and from direct and indirect access to any designated contract market, derivatives clearing organization or swap execution facility owned or controlled by CME Group. The suspension shall run from May 3, 2021 through, and including, May 7, 2021.
Yahoo’s sport and finance streams drive Apollo’s plan; Private equity firm’s $5bn deal for Verizon’s digital media arm has narrow focus
Richard Waters and James Fontanella-Khan and Sara Germano – FT
The private equity firm Apollo believes it has finally come up with a way to cash in on the promise of Yahoo. But after the venerable but faded online pioneer became a graveyard for the reputations of a succession of media and technology industry leaders, it probably would not pay to assume success too soon.
Francisco Partners merges TradingScreen and Imagine Software to create TS Imagine; The new combined entity will create an end-to-end trading and portfolio management software platform, connecting investment managers with brokers, banks and exchanges.
Annabel Smith – The Trade
Investment firm Francisco Partners has merged TradingScreen and Imagine Software to create an end-to-end investment management platform. Francisco Partners, which specialises in partnering with FinTech firms, said it has closed its deal for TradingScreen and that it expects the Imagine transaction to close this month.
AccessFintech and SIX partner to offer CSDR data service to clients; CSDR eligibility and penalty data looks to solve one of the major CSDR challenges – the sourcing of eligibility data.
Jonathan Watkins – The Trade
AccessFintech and SIX have partnered to provide Central Securities Depositories Regulation (CSDR) eligibility and penalty data to their joint customers ahead of the introduction of the complex and controversial rules. The CSDR Settlement Discipline Regime (SDR), commencing February 2022, presents measures to ensure efficient settlement of trades in the European Union.
Will fintech unicorn Flywire’s proposed IPO reach escape velocity?
Alex Wilhelm – TechCrunch
It’s a big morning for fintech startups today: Flywire, a Boston-based magnet for venture capital, has filed to go public. Flywire is a global payments company that attracted more than $300 million as a startup, according to Crunchbase, most recently raising a $60 million Series F last month. We don’t have its most recent valuation, but PitchBook data indicates that the company’s February 2020, $120 million round valued Flywire at $1 billion on a post-money basis. So what we’re looking at here is a fintech unicorn IPO. A great way to kick off the week, to be honest, though I’d thought that Robinhood would be the next such debut.
alt.bank, Brazil’s latest fintech targeting the unbanked, raises $5.5M
Marcella McCarthy – TechCrunch
It looks like everyone and their mother is trying to reinvent the Brazilian banking system. Earlier this year we wrote about Nubank’s $400 million Series G, last month there was the PicPay IPO filing and today, alt.bank, a Brazilian neobank, announced a $5.5 million Series A led by Union Square Ventures (USV). It’s no secret that the Brazilian banking system has been poised for disruption, considering the sector’s little attention to customer service and exorbitant fee structure that’s left most Brazilians unbanked, and alt.bank is just the latest company trying to take home a piece of the pie.
Fintech Provider ParagonEX Announced a Fully Customizable Trading Platform
Finance Magnates Staff
Financial technology leader ParagonEX announced today that it is launching a fully customizable trading platform, allowing its broker clients to decide on every detail of the platform’s look and feel. The customization will feature every element of the trading platform, which will allow for endless customization, per broker or per end user. The new platform will allow each broker to have a unique appearance, displaying elements of their choosing, thus not only creating a distinct brand identity, but also catering to the profile and mix of their end users.
Judge narrows privacy case against fintech firm Plaid
Sara Merken – Reuters
Plaid Inc must face some claims in a consolidated proposed class action that accuses the financial technology company of obtaining and using consumers’ banking account credentials and financial information without consent. U.S. Magistrate Judge Donna Ryu in Oakland on Friday found the plaintiffs sufficiently allege invasion of privacy, violation of California’s anti-phishing law and other claims.
Corporate Cards, Commercial Lending Seek A Bank-FinTech Collaboration Boost
Financial institutions are looking to build out their offerings for corporate customers with a range of FinTech integrations. This week’s examination of the latest FinServ partnerships finds a focus on corporate card, liquidity management, and commercial lending products as banks seek efficiencies in third-party integrations.
Ether’s 1,500% Jump Is Just the Start for Crypto Faithful
Joanna Ossinger – Bloomberg
Second-largest token has scaled a series of peaks this week; Optimism is overshadowing signs the rally may be overextended
Cryptocurrency enthusiasts are scaling up price targets for Ether after the second-largest token’s record-breaking run, an echo of the unbridled optimism that accompanied an earlier surge in Bitcoin. The token affiliated with the Ethereum blockchain — a digital ledger popular for financial services and sales of so-called cryptocollectibles like online art — is up about 1,500% in the past year and hit a new peak of $3,455 on Tuesday.
DCG to Buy More of Crypto Trust Amid Stubborn Discount
Vildana Hajric and Katherine Greifeld – Bloomberg
DCG said it could buy as much as $750 million of GBTC shares; If GBTC converted into an ETF, discount would disappear: BI
The parent company behind the popular Grayscale Bitcoin Trust said it’s upping the amount of shares it plans to purchase as the fund remains at a deep discount to its holdings. Barry Silbert’s Digital Currency Group Inc., which controls Grayscale Investments, said Monday it will now buy up to $750 million GBTC shares. That’s a $500 million increase to the crypto giant’s announcement in March that it would scoop up to $250 million worth of the trust.
S&P Goes Live With Bitcoin, Ethereum Crypto Indexes; The financial data giant has launched its first three crypto index products.
Danny Nelson – Coindesk
S&P Dow Jones Indices launched its first three cryptocurrency indexes Monday, according to documents reviewed by CoinDesk. The crypto indexes, S&P’s first, carry ticker symbols SPBTC, SPETH and SPCMC – one for bitcoin, ether and a “MegaCap” combo of the two. An accompanying methodology document stated the trio launched Monday using data from partner firm Lukka.
PayPal has held exploratory talks about launching a stablecoin: sources
Ryan Weeks – The Block
PayPal is exploring the launch of a stablecoin, The Block has learned. Four sources with knowledge of the situation told The Block that PayPal has made the rounds among some of the industry’s stablecoin protocol developers — suggesting the payments giant may be leaning towards working with a third-party company. Ava Labs, the team behind the Avalanche blockchain, is one of the organizations that has held talks with PayPal over stablecoin development, according to people familiar with the matter. It is not clear which other protocols have been involved in the discussions.
Dogecoin Hits New All-Time High After eToro Listing
Sebastian Sinclair, Omkar Godbole – Coindesk
Dogecoin (DOGE) tapped fresh lifetime highs on Tuesday in the wake of a new exchange listing. The Shiba Inu dog-branded cryptocurrency rose to $0.4876 during the European trading hours, topping the previous record price of $0.47 registered on April 16, according to CoinDesk data. The latest leg higher comes a day after multi-asset brokerage platform eToro announced support for the cryptocurrency, citing strong client demand. The new listing opens dogecoin to some 20 million users spread across the globe.
Federal Reserve official set to lead U.S. banking regulator: reports
Kollen Post – The Block
Treasury Secretary Janet Yellen is reportedly set to name a Federal Reserve official to take over at the U.S. Office of the Comptroller of the Currency on an acting basis, according to reports from the Wall Street Journal and Politico. Yellen has reportedly tapped Michael Hsu, who currently serves as an assistant director at the Federal Reserve, to take over for Blake Paulson. Paulson has been acting comptroller since the departure of Brian Brooks in January. Speaking to The Block, Hsu declined to comment, as did a representative for the OCC.
Ether options trading volume surpassed that of bitcoin’s for the first time on Deribit
Yogita Khatri – The Block
Crypto derivatives exchange Deribit experienced an unusual trend for the first time ever on Monday: Its ether (ETH) options trading volume surpassed that of bitcoin’s (BTC’s). While the total trading volume for bitcoin options was $879.5 million on Monday, ether’s was $1.32 billion, which is 50% more. Options are derivatives contracts that give their holders the right to buy or sell an underlying asset at a stated price within a specified period.
Central Bank-Issued Digital Coins Seen Co-Existing With Bitcoin
Matthew Leising – Bloomberg
Cryptocurrencies like Bitcoin and Ether will co-exist “for a while” with more-restrictive digital coins such as the one issued by China’s central bank, according to Changpeng Zhao, chief executive officer of Binance.
Zhao, who runs the world’s largest Bitcoin exchange, said digital assets issued by central banks will be different than public coins in many ways. They won’t offer the same freedom of use and won’t have a supply cap in place, Zhao, who’s also known as CZ, said Monday in a Bloomberg TV interview.
Johnson Predicts Lockdown Ending June 21 as He Seeks Votes
Tim Ross – Bloomberg
Elections in Scotland, Wales, English local districts Thursday; Premier says indoor hospitality likely to resume from May 17
British Prime Minister Boris Johnson said coronavirus lockdown rules are set to be scrapped in seven weeks’ time, as he hailed the U.K.’s successful vaccine rollout ahead of key elections this week.
Wall St rallies behind one of its own in New York mayoral race; Star banker Ray McGuire taps old friends in law and finance to help fund campaign
Sujeet Indap, Christine Zhang and James Fontanella-Khan – FT
Ray McGuire’s campaign for New York mayor has been turbocharged by donations from the city’s close-knit corporate dealmaking community, which is backing a long-shot bet to put an old friend in office at a time when progressive voices are ascendant in America’s largest city.
A broken state is failing India under Modi too; The surging pandemic has exposed the leader’s failure to reform and cost the ruling BJP in state elections
Ruchir Sharma – FT
Over the past month, even as the pandemic raged, nearly 150m Indians voted in five state elections. The ruling Bharatiya Janata party wanted to draw out the voting in multiple phases so that prime minister Narendra Modi could appear as widely as possible. He made more than two dozen personal appearances in the key battleground of West Bengal alone.
ECB’s Villeroy Says Don’t Fret About Europe’s Insolvency Risks
William Horobin – Bloomberg
There is overblown alarm about a possible wave of insolvencies engulfing the European economy as governments taper aid for firms, Bank of France Governor Francois Villeroy de Galhau said.
The number of insolvencies has been around 40% below normal since the pandemic struck Europe, making it difficult for courts to operate normally and prompting governments to provide blanket support to companies.
Biden’s Capital-Gains Tax Plan Would Upend Estate Planning by the Wealthy
Richard Rubin and Rachel Louise Ensign – WSJ
President Biden’s American Families Plan would raise capital-gains taxes and end a rule that has been a cornerstone of estate planning for generations of wealthy Americans. The change—increasing the top capital-gains rate to 43.4% from 23.8% and taxing assets as if sold when someone dies—would upend the tax strategies of the very richest households. Mr. Biden’s plan would also claw back some benefits Congress gave to slightly less wealthy multimillionaires who have been spared from the estate tax but now could face capital-gains taxes at death.
Biden says it’s time for richest Americans to pay ‘their fair share’ of taxes
Adam Gabbatt – The Guardian
Joe Biden said it is time for corporations and the richest Americans to “start paying their fair share” of taxes as he hit the road on Monday in a concerted effort to promote his administration’s huge new infrastructure and welfare spending plans totaling about $4tn.
Business Coalitions to Speak Out Against Voting Restrictions in Texas
Nick Corasaniti and David Gelles – NY Times
Companies including Hewlett-Packard, Microsoft and Unilever are set to call for expanded voting access in the state after weeks of silence from national businesses on Republicans’ voting bills there.
Treasury Expects to Borrow $1.3 Trillion Over Second Half of Fiscal 2021
Kate Davidson – WSJ
The U.S. plans to borrow nearly $1.3 trillion over the next two quarters as federal spending picks up following the Covid-19 relief package enacted in March, the Treasury Department said Monday.
That would bring total borrowing for the fiscal year ending Sept. 30 to $2.3 trillion, compared with $4 trillion in the last fiscal year, when the pandemic plunged the U.S. into a recession that drove deficits to record highs.
Biden admin taps Rich Cordray, former CFPB chief, to oversee federal student loans
Michael Stratford – Politico
The selection of Cordray, who previously was attorney general of Ohio and ran unsuccessfully to be governor, is a major victory for progressives who have been calling on the Biden administration to take more aggressive action on student loans and for-profit colleges.
FCA Proposes Rule Changes to Encourage SPAC Listings
Sanday Chongo Kabange – Regulation Asia
The FCA proposes to exempt SPACs that identify an acquisition target from being suspended, if they have certain investor protections in place. The UK FCA (Financial Conduct Authority) has initiated a consultation on proposed changes to its listing rules for certain SPACs (special purpose acquisition companies) to encourage more listings while also bolstering investor protections.
Yellen to Appoint Senior Fed Official to Run Top Bank Regulator; Michael Hsu is expected to become acting comptroller of the currency
Kate Davidson and Andrew Ackerman – WSJ
Treasury Secretary Janet Yellen plans to appoint one of the Federal Reserve’s top big-bank supervisors to become the acting comptroller of the currency, overseeing the country’s largest financial firms, according to a person familiar with the matter.
Powell Says Low-Income Lending Rules Should Apply to All Firms Offering Consumer Credit
Paul Kiernan and Andrew Ackerman – WSJ
Federal Reserve Chairman Jerome Powell said rules on lending in low-income communities should be extended to cover all firms providing consumer credit, not just banks.
“Like activities should have like regulation,” Mr. Powell said, speaking to the National Community Reinvestment Coalition, a fair-lending advocacy group.
Esma: Firms struggled with trade data porting after CME winddown; The EU regulator had to coordinate efforts with local NCAs to clamp down on failures made by counterparties to meet Emir guidelines for porting data.
Josephine Gallagher – Waters Technology
In May 2020, the Chicago Mercantile Exchange announced plans to wind down several of its regulated businesses, including its European trade repository (TR), CME ETR. The rollback meant that thousands of regulated market participants reporting trade data to ETR would have six months to reroute their reporting flows to a new TR ahead of November 30, 2020, when the services were scheduled to be terminated.
China’s fast-track regulatory reforms face difficulties in attracting non-Chinese companies, says GlobalData
China has reformed its regulatory system in recent years to include various fast-track programs similar to the US, EU, and Japan to incentivize the development of drugs for unmet medical needs and serious conditions. However, only a few companies based outside of China have been granted priority review status by the National Medical Products Administration (NMPA) for their drug applications, says GlobalData, a leading data and analytics company.
Under Armour Paying $9 Million to Resolve SEC Accounting Probe; Regulator claims sportswear brand failed to tell investors that it pulled forward orders to meet quarterly targets
Dave Michaels – WSJ
Under Armour Inc. UA -0.15% agreed to pay $9 million to settle regulatory claims that it failed to disclose that it was pulling forward orders from future quarters, a practice that allowed it to meet Wall Street’s revenue estimates.
Findings from consumer research on ‘general advice’ label
Independent consumer research has found that changing the ‘general advice’ label alone is unlikely to prevent confusion about the nature of general advice. In light of these findings, ASIC will not be making recommendations to the Government in relation to changing the label of general advice.
Jessica Wachter Named SEC Chief Economist and Director of the Division of Economic and Risk Analysis
The Securities and Exchange Commission today announced that Jessica Wachter has been appointed Chief Economist and Director of the Division of Economic and Risk Analysis (DERA). Dr. Wachter joins the SEC from the Wharton School, University of Pennsylvania, where she has been a professor since 2003.
SEC Charges Under Armour Inc. With Disclosure Failures
The Securities and Exchange Commission today charged sports apparel manufacturer Under Armour Inc. with misleading investors as to the bases of its revenue growth and failing to disclose known uncertainties concerning its future revenue prospects. Under Armour has agreed to pay $9 million to settle the action.
May 2021 Corporate Bond, ETF and Stock Update – Effective May 3, 2021
May 2021 Corporate Bond, ETF and Stock files are available on CME Datamine.
FCA to require pension providers to offer to book Pension Wise appointments for consumers
The Financial Conduct Authority (FCA) has today proposed new rules to require pension providers to ‘nudge’ consumers to Pension Wise in order to benefit from guidance before they access their defined contribution pension savings. This includes booking an appointment with Pension Wise if the consumer wishes.
Investing and Trading
I ate like Warren Buffett for a week — and it was miserable
Bob Bryan – Insider
I ate like Warren Buffett for a week. Buffett does not eat very healthy. My body felt terrible by the end of the week.
Warren Buffett is one of the most successful investors in history. He also has a really weird diet. Buffett’s diet of sugary soda, junk food, and limited vegetables has reached legendary status. The Berkshire Hathaway CEO drinks about five cans of Coca-Cola products a day, constantly munches on See’s Candies, and pours so much salt on his food that John Stumpf, the former Wells Fargo CEO, said watching Buffett dole it out was like a “snowstorm.”
Warren Buffett: Zero interest rates have created a ‘sea change’ in finance
Brian Cheung – Yahoo Finance
Billionaire investor Warren Buffett said Saturday that near-zero interest rates have completely changed the financial landscape, warning that the consequences of easy money policies remain an unanswered question.
Warren Buffett Wants to Make You Happier, Smarter and Richer; The billionaire riffed on tech shares, stock picking and his mistakes at Berkshire Hathaway’s annual meeting, but didn’t want to talk Bitcoin.
Suzanne Woolley – Bloomberg
There was no digital confetti, and no free stock for joining either. Nevertheless, the Warren Buffett and Charlie Munger show out in Los Angeles proved to be good theatre — filled with wit and wisdom from two of the world’s most successful investors.
Jeweler Pandora Takes Ethical Stand Against Mined Diamonds
Christian Wienberg – Bloomberg
Pandora turns to lab-made stones citing sustainability, price; Mined diamonds at risk of losing appeal among younger buyers
Pandora A/S, which makes more pieces of jewelry than any other company in the world, will no longer use mined diamonds, dropping another raw material tainted by ethical concerns. The maker of affordable trinkets will now use diamonds manufactured in laboratories, after it last year said it will stop using newly mined gold and silver. While mined diamonds only went into about 50,000 Pandora pieces last year — out of a total of roughly 85 million items — the move reflects greater demand for sustainability.
Saudi Aramco Follows Big Oil Rivals With Bumper Earnings
Paul Wallace and Matthew Martin – Bloomberg
State-owned firm maintains quarterly dividend at $18.8 billion; Net income rises 24% year-on-year, beating analysts’ estimates
Saudi Aramco’s profit soared in the first quarter following a recovery in global oil and gas markets, though free cash flow remained too low to fully cover dividend payments.
Equity markets signal it is time to diversify; High valuations indicate investors should look beyond tech and consumer stocks
Karen Ward – FT
How worried should we be about stock market valuations? In my day-to-day conversations with clients, it seems that investors are unsure. On the one hand, they can see the US economy is bouncing back quickly, vaccines are being rolled out more rapidly in continental Europe and both governments and central banks are in no rush to rein in stimulus. For the global economy, the good times look set to roll.
Private Equity Shale Specialist EnerVest Fires 111 Workers
Joe Carroll – Bloomberg
EnerVest Ltd., a private equity firm that specializes in shale drilling, fired 111 people at its Houston headquarters, citing “challenging times for the industry.”
The job cuts were made “in an effort to right-size our company and ensure a successful future,” company spokeswoman Lindsey Welch said in an email on Monday.
Environmental, Social and Corporate Governance
Japan’s ambitious carbon target sparks bureaucratic panic; Goal to cut emissions 46% by 2030 unrealistic and made with little planning, experts say
Robin Harding – FT
When Yoshihide Suga pledged to slash Japan’s carbon emissions by 2030, the prime minister received a warm welcome from world leaders at Joe Biden’s climate summit. But his announcement sparked panic across Japan’s bureaucracy.
Pandemic or Climate Change, Government Has a Crucial Role to Play; Poor countries can mitigate the impact of coming crises with good governance
Akshat Rathi – Bloomberg
Sign up to receive the Green Daily newsletter in your inbox every weekday. It’s an oft-repeated warning that poor countries will suffer more from climate change than rich countries. Most developing economies are more dependent on weather-linked sectors, such as agriculture, while having fewer resources to adapt to a warming world.
Carbon Hits Record 50 Euros on Tighter Pollution Rules
Will Mathis – Bloomberg Green
The cost of pollution in Europe has surged more than 50% this year, signaling that the region’s tougher climate policies are starting to make a difference.
Futures in the region’s carbon market, the world’s biggest, exceeded 50 euros ($60) per metric ton for the first time on Tuesday. Rising prices make it more expensive to release carbon dioxide into the air and force industry to look for cleaner ways to stoke their furnaces and keep the lights on.
Record Carbon Price in Europe Will Bolster Government Budgets
Ewa Krukowska – Bloomberg
EU emission prices surge to record on stricter climate goals; Industry is growing concerned about the pace of price gains
An unprecedented rally in the European Union’s carbon market is helping fill national coffers with cash, muffling concerns about the impact of soaring pollution prices on the competitiveness of the bloc’s industry.
Coal Is Getting Even Closer to the End of Its Line; The U.S. is on its way to using less than at any point since the 19th century.
Justin Fox – Bloomberg
In 2020, Americans used 447 million short tons (to distinguish from metric tons) of coal. That’s enough to fill 4 million railroad cars, which sounds like a lot. But it’s also the country’s lowest annual coal consumption since 1965, and even that barely hints at the historical territory coal may soon explore. A few more years at the downward pace of the past decade, and U.S. coal use will reach levels last seen in the 19th century.
US plans crackdown on greenhouse gases used in refrigerators; Global hydrofluorocarbon phaseout could avoid up to 0.5C of warming by 2100, EPA says
Myles McCormick – FT
The US Environmental Protection Agency has announced a sweeping curtailment of a group of potent greenhouse gases used in air conditioners and refrigerators as the regulator advances revived emissions goals under the Biden administration.
Taiwan fund managers rush to roll out sustainable ETFs; ESG fund assets saw a fourfold jump to $3.21bn in 2020 alongside strong growth in ETF ownership
Rebecca Feng – FT
Domestic fund managers in Taiwan are rushing to roll out new exchange traded funds that carry an environmental, social and governance label, plugging into the continued appetite for the low-cost passive vehicles and rising popularity of sustainable investing. Sustainable investing and ETFs have been two of the biggest draws for Taiwan investors since last year.
Ex-Tullow chief targets Africa assets as oil majors retreat; Paul McDade’s new venture Afentra seeks to step in as big groups scale back on hydrocarbons
David Sheppard – FT
The former chief executive of Tullow Oil is launching an Africa-focused venture aimed at capitalising on energy majors’ plans to scale back their oil and gas production.
Deluge of Debt Is Tied to Carbon Emissions and Diversity; Critics say incentives and penalties embedded in ‘ratchet’ loans meant to spur environmental and social change are too small to matter
Paul J. Davies – WSJ
BlackRock Inc., BLK 0.77% Bud owner Anheuser-Busch InBev NV and a plastic packaging maker in Portugal are among a flood of borrowers using financial carrots and sticks to improve their performance on things such as the environment and boardroom diversity. The sticks, complain some investors, don’t leave much of a mark.
Biden’s Road to Clean Energy Runs Through West Virginia Coal Country
The state’s senators, Joe Manchin and Shelley Capito, are poised to shape the nation’s energy transition—with the challenges of their home state firmly in mind.
Kellie Lunney – Bloomberg
Gerald Lucas, 69, is a former coal miner and federal mine inspector who now gives public tours underground at the Beckley, W.Va., Exhibition Coal Mine, a working mine that ceased operations in 1953. He describes it as a fun job that allows him to share his decades of experience with visitors.
Lucas’s career change is becoming more common among West Virginians as the rural state of 1.8 million moves toward a new economy in which coal is no longer king. The state, which had a poverty rate of 16% in 2019, has long felt the effects of coal’s decline.
Credit Suisse Chairman Horta-Osorio Buys $1.2 Million in Stock
Patrick Winters and Marion Halftermeyer – Bloomberg
Credit Suisse Group AG Chairman Antonio-Horta Osorio bought 1.1 million francs ($1.2 million) of shares in a sign of confidence he can turn the bank around from one of the most turbulent periods in its history.
Deutsche Bank approved as qualified primary dealer for China’s open market; Deutsche Bank China is the first Eurozone bank to qualify for approval from the People’s Bank of China.
Wesley Bray – The Trade
Deutsche Bank has received approval by the People’s Bank of China (PBOC) to act as a qualified primary dealer for domestic open market businesses as it continues to grow its role as one of the most active foreign banks in the country.
Bank of America, JPMorgan Enter Swaps Trade Tied to New Libor Replacement
Lananh Nguyen and Alex Harris – Bloomberg
Bank of America Corp. and JPMorgan Chase & Co. struck the first swaps trade tied to the Bloomberg Short Term Bank Yield index Friday, as Wall Street tests new benchmarks meant to help replace Libor.
The banks entered into a $250 million one-year basis swap with one side tied to BSBY, as the reference rate is known. The benchmark is constructed using aggregated and anonymized data based on transactions of commercial paper, certificates of deposit, U.S. dollar bank deposits and short-term bank bond trades, reflecting banks’ marginal funding costs. The other side of the swap is linked to the Secured Overnight Financing Rate.
China Tensions Spill Over as Europe Moves Toward Biden’s Side
A major investment deal reached in December between the European Union and China — after seven years of painful negotiations — may end up being the high-water mark for ties that are quickly deteriorating again.
Since then, the EU’s executive branch and Germany have each formulated legislation that would make life harder for Chinese entities to invest, while joining the U.S. in swapping tit-for-tat sanctions with Beijing. Italy’s government has turned from an enthusiastic backer of President Xi Jinping’s Belt and Road Initiative to blocking planned acquisitions by Chinese companies. And in France, China’s ambassador didn’t even show up when summoned in March, citing “agenda reasons.”
Italy Considers Boosting Tax Benefits for Buying Loss-Making Banks
Chiara Albanese and Sonia Sirletti – Bloomberg
Draft decree would extend duration, size of the fiscal relief; Measure was introduced to entice buyers for Monte dei Paschi
Italy is mulling extending the fiscal benefits for banking mergers and acquisitions it introduced at the end of last year, according to a draft decree seen by Bloomberg. The move could further entice potential buyers of state-owned Banca Monte Paschi di Siena SpA, which Italy must sell before the end of 2021 as part of an agreement with the European Union.
Hyflux Gets Six Final Offers With One Covering Retail Investors
May 4, 2021, 1:10 AM CDT
Five offers are for specific assets, person familiar said; Bid to restructure entire firm has deal for retail investors
Crisis-hit Singaporean water-treatment company Hyflux Ltd. has six final offers including one to restructure the entire firm, after an April 30 target for finalizing binding term sheets, a person familiar with the matter said.
IPOs Boom at the Fastest Pace Since 2007 in Australia
Harry Brumpton – Bloomberg
Firms in a range of sectors going for IPOs as Covid-19 recedes; IPOs kicking off in recent weeks include pub chain, hospitals
From hospitals to pubs, Australian companies are rushing into public markets to raise funds via first-time share sales at the fastest pace in 14 years. Australian companies have priced nearly $2.3 billion of initial public offerings so far in 2021, the most year-to-date since the $3.6 billion raised in 2007, according to data compiled by Bloomberg. More than half of this year’s haul came from four IPOs, which fixed the prices of their respective offerings in the past two weeks.
Why Mexico’s Shadow Banks Are Raising Investor Fears
Justin Villamil – Bloomberg
Spooky things can come out of the shadows, and shadow banks, as non-bank lenders are called, have been a source of unpleasant surprises for markets across the globe over the years. Now shadow banks in Mexico, where they have boomed recently, are giving investors the willies after two of the largest of them announced sharp revisions to their financial statements. Bonds for a range of lenders plummeted on fears of what else might be lurking in the sector — fears compounded by the deep cuts made to Mexico’s financial regulator last year amid the stresses created by the pandemic.
Little-Known Chinese Trader Buys New York Sugar in Surprise Move
Isis Almeida and Alfred Cang. – Bloomberg
Honors Commodity bought 61,000 tons via the New York exchange; This is the first time trader took part in exchange deliveries
A little-known Chinese trader bought a cargo of raw sugar through the New York exchange for the first time, a move that surprised the industry dominated by a few large players.
Private Equity Doesn’t Live by Tax Breaks Alone
Rule of law, free flow of information and political stability also matter. On all these, Hong Kong has been going backward.
Matthew Brooker – Bloomberg
Hong Kong’s government says cutting the tax on carried interest to zero will make the city a more attractive base for private equity firms and boost the economy. In normal times, there would be no debate. The change gives the Chinese city an edge over its regional rival Singapore and is opportunely timed, coming just as President Joe Biden proposes to eliminate tax breaks for carried interest (essentially the profits that partners accrue on a fund’s investments) in the U.S. The question is whether the enticement is sufficient to outweigh an expanding list of factors that threaten to dim Hong Kong’s appeal as an international financial center.
Someone new thinks they can make Yahoo and AOL good businesses in 2021; And, as usual for this glum moment in media, it’s a private equity firm that wants a crack at finding new places to cut.
Joshua Bentro – NiemanLab
Yahoo and AOL have been boring for so long that it can be hard to remember why (if?) they were ever interesting. But there was a time when they were truly the kings of the web — one connecting people to the internet, the other taking up a shocking percentage of their time once they got there.