Hits & Takes
John Lothian & JLN Staff
In the Circuit Court of Cook County, Illinois, Chancery Division, in the case of Sheldon Langer, Ronald M. Yermack, Lance R. Goldberg, Robert Prosi, Gerald Petrow, Craig Rheingruber, Stanton Miller, Ray Larsen, Daniel Ryan, Carol Jorissen, individually on behalf of themselves and all others similarly situated, Plaintiffs, versus CME Group, Inc., a Delaware Corporation, and The Board of Trade of the City of Chicago, Inc., a Delaware Corporation, Defendants:
A hearing took place on the morning of January 30th in Cook County Circuit Court, Chancery Division, concerning the status of the defendants’ motions that were originally due by January 31st. The defendants requested an extension of time and additional page limits for filing their motions. The presiding judge granted an extension, allowing them to submit motions for summary judgment with a maximum of 85 pages and set a new deadline for filing these motions by February 16th.
The defendants will be submitting three motions simultaneously. While the first two motions, namely a motion for summary judgment and a motion to decertify a class, were expected, the third motion, a motion to strike our expert damages witness, came as a surprise to the court, a JLN source shared.
Both parties intend to engage in mediation, but this will only occur after the aforementioned motions have been filed and thoroughly argued, and if the CME loses the argument. Consequently, it appears that mediation will not commence until, at the earliest, May.
Cboe Global Markets released its fourth quarter results and reported that it achieved remarkable results, with a 33 percent increase in diluted EPS to $1.98. The full year was even more impressive, as it saw a 226 percent surge in diluted EPS to $7.13. Adjusted diluted EPS for the quarter and full year increased by 14 percent and 13 percent, respectively. Cboe also reported record net revenue for both the quarter, at $499.0 million (up 9 percent), and the full year, at $1.9 billion (up 10 percent). Looking ahead to 2024, the company aims for organic total net revenue growth of 5 to 7 percent, with Data and Access Solutions targeting 7 to 10 percent growth. To support these goals, Cboe has set an adjusted operating expense guidance range of $798 to $808 million, emphasizing its commitment to long-term revenue and earnings growth through continued investment.
Nicole Oskin announced on LinkedIn that she accepted a role as director, FinOps at CME Group, moving from CMEDataServices, where she was also a director.
The World Federation of Exchanges announced on LinkedIn that U.S. Commodity Futures Trading Commissioner Summer Mersinger will be delivering a keynote address at the WFEClear conference.
Defense Acquisition University reached out to George Vukotich to moderate a panel for the Department of Defense on AI. The panel is on February 21 at 12:30 p.m. and titled “Innovation Sparks, Episode 6: Building Capability with DIU.” George Vukotich, Ph.D. is a visiting faculty member at DAU.
Fastmarkets’ Andrea Hotter will be on the Smarter Markets podcast tomorrow with host David Greely to talk about “what’s going on?”
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
Our most read stories from our previous edition of JLN Options were:
Traders Pile Into Bets on VIX Soaring to 50 as Fed Risks Mount from Bloomberg.
Regulatory nod for US spot bitcoin ETF options may take months- sources from Reuters.
SGX Group reports 1H FY2024 net profit of S$251 million from SGX Group. ~JB
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Chicago’s Wealthy Raise $66 Million for Fight Against Crime; Donors include the Crown and Pritzker family foundations; ‘The business community is all in,’ Hyatt CEO Hoplamazian says
Miranda Davis – Bloomberg
Chicago’s wealthy families and top business leaders have raised $66 million to help fund the city’s fight against crime. Donors including the Crown and Pritzker family foundations contributed just over 30% of the $200 million that’s required for an initiative to reduce gun violence, representing more than half of the $100 million the business community has pledged. The Civic Committee of the Commercial Club of Chicago, which includes senior leaders from companies including McDonald’s Corp., Ulta Beauty Inc. and Morningstar Inc., is leading the fundraising efforts.
***** Nice to see Chicago leaders step up. That is the right direction.~JJL
Chinese investors buy gold as property and stock markets fall; ‘Blistering’ demand from central banks also helps keep yellow metal above $2,000 per troy ounce
Harry Dempsey – Financial Times
Chinese investors and households have been buying gold as a refuge from local property and stock market mayhem, helping to support record prices for the haven asset. China was the principal bright spot globally for gold jewellery and investment flows in 2023, according to industry group the World Gold Council’s quarterly report, as local property, equity and currency markets disappointed following the country’s exit from Covid-19 lockdowns.
****** Chinese investors buy gold – not the new gold, but the old gold, you know, gold, the metal.~JJL
Thursday’s Top Three
Our top clicked item Thursday was the LinkedIn Post Commemorating the 20th Anniversary of Crystal Clear Communications from Ellen Resnick, the president of Crystal Clear Communications. We wish her a very happy 20th anniversary. Second was US Disrupted Chinese Hacking Operation That Targeted Routers, from Bloomberg. Third was It will take years for the oil and gas market to recover from the ‘mother of all shocks,’ Harvard economist says, from Business Insider.
Pig-Butchering Scam Kits Are for Sale in Underground Markets; ‘DeFi savings’ latest iteration of fraud targeting vulnerable; ‘Pig butchering’ operations started in China but now spreading
Sana Pashankar – Bloomberg
Cybercriminals are selling the latest evolution of pig-butchering schemes in ready-to-go kits on the dark web, lowering the barrier to entry for scammers around the world, according to a report published Friday by cybersecurity firm Sophos. In traditional pig-butchering scams, which originated in China and blew up during the pandemic, criminals pretend to cultivate a romantic or personal relationship with victims through dating apps or social media. After gaining their trust over weeks of virtual conversations, the fraudsters manipulate them into investing in phony cryptocurrency investments. Once the criminals squeeze as much digital currency as they can out of the victims, they take off with the funds, sometimes robbing innocent people of their life savings.
***** If you are wondering what “pig-butchering” is, check out the Pig Butchering page on MarketsWiki.
LME clearing house reshuffles management
The London Metal Exchange’s (LME) clearing house has reshuffled its management team with the appointment of a new chief operating officer, chief risk officer and head of clearing risk, it said on Friday. The clearing house of the world’s largest and oldest metals markets appointed former Euroclear manager as chief executive in October.
Markets Don’t Know What to Expect Anymore, and That’s Good; A greater diversity of economic forecasts can lead to a richer discussion and help expose previously unseen risks and weaknesses.
Allison Schrager – Bloomberg
When it comes to financial markets, nothing is certain. For much of the last few decades, however, it was easy to convince yourself otherwise: Interest rates mostly went in one direction, down, and high inflation was a thing of the past. The pandemic economy, and the policies in response to it, changed all that. Not only did they bring back higher inflation and interest rates, they also altered expectations. And while the consensus is that the US economy will stick a soft landing, there is wide variation among investors, consumers and professional forecasters about future inflation rates and bond yields.
Binance Freezes $4.2M in XRP Tokens Stolen From Ripple Executive’s Wallet; Over $120 million in XRP was stolen from Ripple Labs Executive Chairman Chris Larsen earlier this week.
Shaurya Malwa – CoinDesk
Crypto exchange Binance froze $4.2 million worth of xrp (XRP) tokens tied to this week’s $120 million exploit, CEO Richard Teng said in an X post. Teng said XRP Ledger developers, who maintain the blockchain that uses XRP, had flagged the exploit to exchanges and asked them to look out for deposits related to exploiter wallets. “We will continue to support Ripple in their investigations and their efforts to retrieve back the funds, including closely monitoring the majority of funds still in the exploiter’s external wallets in case they deposit to Binance,” Teng said.
Chinese stocks are melting down again after worst week in years
Anna Cooban – CNN
Chinese stocks have had a very bad week. Despite recent attempts by Beijing to shore up confidence in the economy and stem a protracted stock market slump that has wiped out $6 trillion in value in three years, investors are still rushing for the exit. The Shanghai Composite index fell 6.2%, its biggest weekly loss since October 2018, while the Shenzhen Component index shed 8.1%, its largest drop in three years. The indexes have lost more than 8% and 15% respectively since the start of the year.
The Mystery of the $400 Million FTX Heist May Have Been Solved; An indictment against three Americans suggests that at least some of the culprits behind the theft of an FTX crypto fortune may be in custody.
When more than $400 million worth of crypto was mysteriously pulled out of the coffers of what was once the world’s biggest cryptocurrency exchange, FTX, on the very day that it declared bankruptcy in November of 2022, many initially suspected insiders at the company-including, potentially, then CEO Sam Bankman-Fried, now convicted of fraud. But clues left across blockchains over the past year suggested instead that external thieves had chosen a particularly inconvenient moment during FTX’s meltdown to pull off an enormous heist. Now, new clues revealed in a US Department of Justice indictment suggest something even more surprising: Some of those suspected thieves appear to have been in the United States and have now been arrested.
UN climate chief calls for $2.4 trillion in climate finance
Valerie Volcovici – Reuters
The world needs to mobilize at least $2.4 trillion to keep global climate change goals within reach, the United Nations climate chief said in a speech on Friday. Simon Stiell, Executive Secretary of the UN Framework Convention on Climate Change, addressed a group of students at the Azerbaijan Diplomatic Academy in Baku, host of the COP29 climate summit in November, laying out the steps that need to be taken this year to turn the commitments made at last year’s summit in Dubai into reality.
“Torrents, not trickles”: UN climate chief’s vision for COP29
Andrew Freedman – Axios
The UN’s next climate summit will be an “enabling COP,” focused on drastically scaling up climate finance and making bold emissions reduction commitments. Why it matters: Top UN climate official Simon Stiell delivered a speech this morning in Baku, Azerbaijan, envisioning what will happen if the world meets the climate challenge and avoids devastating impacts of climate change. Zoom in: The speech, delivered at ADA University, counters perceptions in some parts of the climate community that Baku will involve lower stakes and more technical work than COP28 did in Dubai.
Biden’s Natural Gas Export Project Freeze Is a ‘Mistake,’ Exxon CFO Says
Kevin Crowley – Bloomberg
The Biden administration’s decision to halt new natural gas-export licenses is a “mistake” that will slow efforts to reduce climate-damaging emissions, according to Exxon Mobil Corp. “Reducing production of LNG actually harms the world achieving net zero sooner rather than later,” Chief Financial Officer Kathy Mikells said during an interview. “It’s a mistake.”
Man Group Drops GLG Brand and Boss Under New CEO’s Revamp
Nishant Kumar and Miles Weiss – Bloomberg
Man Group Plc is merging its discretionary trading units in a reorganization that includes the departure of GLG’s chief executive officer Teun Johnston. The hedge fund group is retiring the GLG, Man Global Private Markets and Varagon brands, according to an internal communication seen by Bloomberg News. A combined Discretionary division will be the new home for products that rely on traders to choose investment strategies.
BofA’s Hartnett Says Stock Markets Are Behaving Like Dot-Com Era
Michael Msika – Bloomberg
The rush into technology stocks is resembling the bubble of 1999, reflecting an assumption that the economy will perform strongly despite tighter monetary policy, according to Bank of America Corp. strategists. While falling yields were pushing the Nasdaq higher in the fourth quarter, the script has now flipped to both rising over the past four weeks. This price action would typically only occur after a recession, such as in 2009 or the dot-com bubble around the turn of the century, BofA strategists led by Michael Hartnett wrote on a note.
BNP and Deutsche Bank Are a Bit Too Excited About Deals; European optimism about investment banking revenue looks overcooked. Analysts are skeptical.
Paul J. Davies – Bloomberg
US investment banks are worried they will lose their competitive edge globally if proposed capital increases get pushed through. Some European rivals seem to be taking the message a bit too seriously. BNP Paribas SA and Deutsche Bank AG both had bullish growth targets for investment banking and trading in their full-year results on Thursday, and both saw some skepticism from analysts. Banco Santander SA, which also reported this week, has been building its capabilities, especially through US hiring, in the hopes of grabbing more business too.
ETFs barred from new UK sustainable investing regime; The regulator’s labels will only apply to UK-domiciled funds and UK-listed ETFs are domiciled abroad
Steve Johnson – Financial Times
Exchange traded funds are set to fall foul of country-by-country “green” fund rules for the second time in a matter of weeks as a result of new UK legislation. ETFs are not eligible for a series of new “sustainable” labels being rolled out by the UK’s Financial Conduct Authority. This means anyone wanting to only invest in funds that meet this threshold will find very few passive funds, and no ETFs, to purchase.
Man Group retires GLG brand as new chief hones credit strategy; Robyn Grew begins first big reorganisation at leading hedge fund by ditching well-known name and merging teams
Costas Mourselas – Financial Times
Man Group, the world’s largest publicly listed hedge fund, is retiring the GLG brand and merging some of the firm’s teams as it advances into credit markets, in the first big changes made by its new chief executive. The firm is dropping the brand, one of the best known in the industry, and creating a discretionary investing division that will include staff from other teams. Discretionary investing involves managers using their expertise in markets to buy and sell assets selected to make money for investors.
Global Span of Banks’ Commercial Real Estate Problem Starts Locally; International banks often have greater exposure to U.S. downtowns and big cities
Telis Demos – The Wall Street Journal
Why are U.S. commercial real estate problems rapidly going global? The reasons are actually quite local. Many of the problems identified in the property market, such as low occupancy rates for office buildings and the challenge of higher interest rates on refinancing, aren’t evenly spread around the country. They are often concentrated in the downtowns of certain cities. So while U.S. regional banks have borne the brunt of investor worries because of their overall large presence in commercial property lending, they can have a relatively lighter presence in the bigger-city, bigger-building market. But the converse might be true for global banks that lend into the U.S., which can gravitate to those population centers.
Ukraine Tells Allies Troops Are Outgunned Three-to-One by Russia
Alberto Nardelli – Bloomberg
Ukraine has warned its allies that it is facing a “critical” shortage of artillery shells with Russia deploying three times as much firepower on the frontlines each day. Defense Minister Rustem Umerov wrote to his European Union counterparts this week describing the massive numerical disadvantage his troops are facing as they try to fight off fresh Russian assaults. He said Ukraine is unable to fire more than 2,000 shells a day across a frontline that stretches for 1,500 kilometers (930 miles), according to a document seen by Bloomberg. That’s less than a third of the ammunition Russia uses.
Precision equipment for Russian arms makers came from U.S.-allied Taiwan; Moscow-based importer also sought to supply a secretive Kremlin effort to mass-produce attack drones, a Post examination found
Dalton Bennett, Mary Ilyushina, Lily Kuo and Pei-Lin Wu – The Washington Post
It had been a busy year for the employees gathered in June for I Machine Technology’s corporate retreat at a resort on Russia’s Black Sea coast. With war raging in Ukraine, the Russian defense industry was hungry for the advanced manufacturing equipment the Moscow-based supplier specialized in importing. Dressed in summer linens, chief executive Aleksey Bredikhin welcomed the crowd seated among plates of local delicacies and flutes of prosecco. He paused to recognize several guests who had traveled thousands of miles to join the festivities in Sochi.
Ukraine’s Army Chief Stokes Rift With Zelenskiy Over War; Zelenskiy faces outspoken general, supply delays from allies; Army chief Zaluzhnyi has differed with president over approach
Daryna Krasnolutska – Bloomberg
Ukraine’s top general doubled down on a confrontation with President Volodymyr Zelenskiy over military leadership, escalating a power struggle in Kyiv at a critical time in the war against Russia’s invasion. Valeriy Zaluzhnyi, whose future as commander-in-chief of the armed forces is hanging in the balance, said in an opinion piece for CNN that bureaucracy is holding back Ukraine’s defense industry and “a new philosophy of training and warfare” is needed in 2024 to cope with limited resources.
U.S. Imposes Sanctions on Israeli Settlers Involved in West Bank Attacks; Concerns have grown in Washington that Israel’s government hasn’t done enough to curb rising violence against Palestinians
Vivian Salama and Dion Nissenbaum – The Wall Street Journal
The Biden administration has announced a new set of sanctions against Israeli settlers and others it deems responsible for attacks on Palestinians in the West Bank, as concerns grow in Washington that the Israeli government hasn’t done enough to curb the violence.
Exchanges, OTC and Clearing
CME Group Reports Record January ADV of 25.2 Million Contracts
Highest-ever January ADV with 16% growth year-over-year; Record January interest rate ADV of 13.1 million contracts, up 27%; Record January options ADV of 6.1 million contracts, up 26%. CME Group, the world’s leading derivatives marketplace, today reported its January 2024 market statistics, reaching a new overall average daily volume (ADV) record of 25.2 million contracts for the month, up 16% from January 2023. The company’s interest rate ADV saw double-digit growth, driven by its SOFR complex and U.S. Treasury futures. ADV also increased by double-digits across energy, agricultural and foreign exchange products.
LME Clear management changes
London Metal Exchange
LME Clear is pleased to announce the appointments of Chris Jones as Chief Operating Officer (COO), Matt Wade as Chief Risk Officer (CRO), and Paul Kirkwood as Head of Clearing Risk. The appointments are effective immediately, with the COO and CRO roles subject to regulatory approval. Chris Jones joined LME Clear in 2013 as CRO before becoming LME Group CRO in 2017. He has deep knowledge of the LME Clear business and several decades of market and clearing experience. Chris will oversee all LME Clear operations. Matt Wade has been with LME Clear for 10 years as Head of Clearing Risk and has over 30 years of market and risk experience, making him well-placed to lead on all aspects of the LME Clear Risk function, which encompasses commercial, financial and enterprise risk. Paul Kirkwood, previously Head of Market Risk for 10 years, succeeds Matt as Head of Clearing Risk, and will oversee all first-line clearing risk functions.
Cboe Global Markets Reports Results for Fourth Quarter 2023 and Full Year
Cboe Global Markets
Cboe Global Markets, Inc. (Cboe: CBOE) today reported financial results for the fourth quarter of 2023 and full year. “I am pleased to report that Cboe generated another year of strong revenue growth and financial results in 2023,” said Fredric Tomczyk, Cboe Global Markets Chief Executive Officer. “Our Derivatives and Data and Access Solutions categories helped drive the 10% net revenue growth and 13% adjusted diluted EPS growth for the year as both strong secular and cyclical trends helped boost these business lines. In addition, we made meaningful progress on our strategic initiatives as a company and are well-positioned for 2024. This year we plan to unlock additional value from our global derivatives and securities network by leveraging our core strengths – our global footprint, superior technology and product innovation – to help drive continued strong revenue growth and financial results.
Boerse Stuttgart records January turnover of around EUR 8,5 billion; Trading volume increases compared to the same month of the previous year; Growth in structured securities, bonds and exchange-traded products
Boerse Stuttgart via Mondovisione
Based on the order book statistics, Boerse Stuttgart generated turnover of around EUR 8,5 billion in January – around 11 percent more than in the same month of the previous year. Structured securities made up the largest share of the turnover. The trading volume in this asset class was around EUR 3,7 billion – an increase of around 9 percent compared to the previous month. Leverage products generated turnover of around EUR 2,7 billion. Investment products
New Product Summary: Initial Listing of the E-mini S&P 500 Equal Weight Index Futures Contract – Effective February 26, 2024
Initial Listing of the E-mini S&P 500 Equal Weight Index Futures Contract.
Spot market sales statistics for January 2024
Deutsche Boerse Group
A trading volume of EUR105.01 billion was achieved on Deutsche Boerse’s cash markets in January (previous year: EUR 106.95 billion / previous month: EUR97.40 billion).
Daily Price Limits to be Broadened : 2 issues
Japan Exchange Group
The following 2 issues have fallen under the following (1) or (2) for two consecutive business days. As such, TSE wishes to bring to your attention that it will broaden only the upper (or lower) daily price limit on the next business day (February 5) as follows. (1) The upper (or lower) daily price limit is reached and trading volume is 0 without conducting allocation at the upper (or lower) daily price limit. (2) Trading volume remains at 0 shares until the end of the afternoon session, trades are executed at the upper (or lower) daily price limit at the close of the afternoon session with bids (or offers) remaining at the upper (or lower) daily price limit.
OCC Reports January 2024 Monthly Volume Data
The Moscow Exchange summed up trading results in January 2024
The total trading volume on the Moscow Exchange markets in January 2024 amounted to 107.9 trillion rubles (82.3 trillion rubles in January 2023). Stock market The trading volume on the stock market in January amounted to 2.9 trillion rubles (1.6 trillion rubles in January 2023). Here and further – without taking into account overnight bonds. The volume of trading in shares, depositary receipts and shares amounted to 1.8 trillion rubles (0.8 trillion rubles in January 2023). The average daily trading volume is 85.7 billion rubles (37.5 billion rubles in January 2023).
JPMorgan, BofA In Talks to Finance $13 Billion DocuSign Buyout
John Sage and Ryan Gould – Bloomberg
Wall Street banks including JPMorgan Chase & Co. and Bank of America Corp. are in talks to provide as much as $8 billion in financing for a buyout of DocuSign Inc. that values the company at around $13 billion, according to people with knowledge of the matter. Jefferies Financial Group Inc. and Deutsche Bank AG are also among the lenders considering a role in funding what would be the largest leveraged buyout of the year so far, according to the people, who asked not to be identified discussing the transaction.
Billionaire’s Grab for French Tech Prize Falters; Daniel Kretinsky faces a backlash after his attempt to carve up Atos.
Lionel Laurent – Bloomberg
If corporate Paris is a moveable feast, Czech billionaire Daniel Kretinsky is a regular diner. The Francophile investor known for his tough negotiating tactics and opportunistic timing has a bulging trophy cabinet, from stakes in newspaper Le Monde and retailer Fnac Darty SA to supermarket chain Casino Guichard Perrachon SA. Higher interest rates have seen more goodies fall into his lap as he tries to match strategic assets to a bargain price – paying seven times an asset’s earnings means waiting seven years for a return, he’s reported to have said.
Why AI hallucinations can be a good thing; Generative artificial intelligence should be welcomed as a giant mash-up machine to enhance creativity
John Thornhill – Financial Times
The tendency of generative artificial intelligence systems to “hallucinate” – or simply make stuff up – can be zany and sometimes scary, as one New Zealand supermarket chain found to its cost. After Pak’nSave released a chatbot last year offering recipe suggestions to thrifty shoppers using leftover ingredients, its Savey Meal-bot recommended one customer make an “aromatic water mix” that would have produced chlorine gas.
Nvidia CEO Says Nations Seeking Own AI Systems Will Raise Demand
Ian King and Ed Ludlow – Bloomberg
Nvidia Corp. Chief Executive Officer Jensen Huang said countries around the world aiming to build and run their own artificial intelligence infrastructure at home will drive up demand for his company’s products. Nations including India, Japan, France and Canada are talking about the importance of investing in “sovereign AI capabilities,” Huang said in an interview Thursday with Bloomberg Television. “Their natural resource – data – should be refined and produced for their country. The recognition of sovereign AI capabilities is global.”
Barclays shifts focus to buyout firms for UK payments business sale – sources
David French, Amy-Jo Crowley, Andres Gonzalez and Pablo Mayo Cerqueiro – Reuters
Barclays plc is sounding out private equity firms about taking a majority stake in its UK merchant payments business, after overtures to trade buyers yielded muted interest, three people familiar with the matter said. The bank has been making a number of strategic shifts as Chief Executive C.S. Venkatakrishnan seeks to turn around its performance, including trying to bring in a partner with additional industry “know-how” to expand the UK payments unit, as well as put in extra capital, Reuters reported in September.
Big tech killed the internet – blockchain can help revive it; Unlike traditional computers, blockchains ensure that any code they run will continue to operate as designed
Chris Dixon – Financial Times
The early internet was a magical place because it was driven by people and their creativity. Builders knew that whatever they made, they owned – a simple promise that established the right incentives for the technology to flourish. But now, the internet is stagnating and it’s harder than ever for new apps to break through.
FIX Trading Community welcomes EuroCTP as its latest member; Follows a string of recent additions including investment solutions provider China Post Global, as well as S&P Global and CME Group’s joint venture, OSTTRA.
Wesley Bray – The Trade
The FIX Trading Community has added EuroCTP, the European initiative to establish a consolidated tape in the EU, as its newest member. This latest inclusion in the FIX Trading Community follows recent additions over the last few months including China Post Global, which provides investment solutions across various asset classes, as well as OSTTRA, the joint venture between S&P Global and CME Group.
Fireside Friday with… APG Asset Management’s Sunil Patil; For this week’s Fireside Friday interview, The TRADE had the pleasure of sitting down with APG Asset Management’s senior trader, Sunil Patil, to explore the realm of non-deliverable forwards trading, examining next steps for automation and buy-side demand for algo trading.
Annabel Smith – The Trade
Why have NDFs been slower to be become electronified? The electronification of non-deliverable forwards (NDFs) has been influenced by idiosyncratic factors. Historically, liquidity in this domain has been in the hands of traditional banks, be they regional or global entities. Regional banks, with their local presence, typically offer more robust liquidity and expertise in dealing with specific currencies.
BMLL brings Level 3 analytics to South African capital markets; Data provider has created three data bundles targeting South African markets; builds on continued expansion of the firms’ data offering.
Wesley Bray – The Trade
Historical Level 3 data and analytics provider BMLL has expanded its data coverage to now serve South African capital markets. BMLL has created three data bundles targeting South African market participants using 200 metrics derived from Level 3 data spanning JSE Main, AltX and A2X, alongside every recognised exchange for dual-listing (ASX, LSE, NYSE, TSE, Nasdaq, ENXT AMS, ENXT BRU and SIX).
National cybersecurity plans lack performance measures and estimated costs, GAO says; In response to the watchdog’s report, the Office of the National Cyber Director said that performance measures don’t really exist in the cybersecurity field.
Christian Vasquez – CyberScoop
The Office of the National Cyber Director has work to do to improve the implementation of President Joe Biden’s national cybersecurity strategy, according to a watchdog report. The Government Accountability Office said in a report released Thursday that the national cybersecurity strategy lacks performance measures and estimated costs, which the watchdog believes is essential for a national strategy.
Cybersecurity In Numbers: Unpacking The Cybernomics 101 Report
Tony Bradley – Forbes
Barracuda recently published its Cybernomics 101 report, an extensive study examining the financial forces and profit motives behind cyberattacks. The report, based on a global survey of over 1,900 IT security practitioners, provides a comprehensive look into the security challenges organizations face today and the financial implications following security compromises like ransomware and phishing.
Combatting Stress In The Cybersecurity Industry
John Maynard – Forbes
The cybersecurity industry is one of the most exciting and challenging fields to work in. However, it is also one of the most stressful. With the increasing demand for cybersecurity professionals, the industry is facing a significant skills gap that has resulted in elevated stress levels across the board. In a field like cybersecurity, where there is a demand for long, hard days and data-intensive decision-making, it is of the utmost importance that security teams are at the top of their game. But the state of the industry now shows that this is a significant challenge.
FTX Hack Mystery Possibly Solved: U.S. Charges Trio With Theft, Including Infamous Attack on Crypto Exchange
Danny Nelson – CoinDesk
The U.S. federal government on Wednesday charged three people with a yearslong phone hacking conspiracy that culminated in the infamous theft of $400 million from FTX as Sam Bankman-Fried’s crypto exchange was collapsing. In an 18-page indictment filed in D.C. court, prosecutors accused Robert Powell, Carter Rohn and Emily Hernandez with conspiracy to commit wire fraud and identity theft in their operation of a SIM swapping ring that targeted fifty victims between March 2021 and April 2023.
Bitcoin ETF Price War Is Trickling Down to Crypto Custodians
Olga Kharif and Yueqi Yang – Bloomberg
Less than a month after the debut of spot Bitcoin exchange-traded funds, the asset managers offering the investment vehicles appear to be seeking ways to bolster their own profitability. Valkyrie Investments said Thursday that it’s retaining BitGo as a second custodian to help safeguard customer assets. Coinbase currently dominates the custody role for Bitcoin ETFs, supporting eight out of the 10 issuers, including for the roughly $113 million Valkyrie Bitcoin Fund, which trades under the BRRR ticker.
OPNX Founder Su Zhu Says Shutdown Comes Because FTX Estate Claims Reached ‘Recovery’
Sam Reynolds – CoinDesk
OPNX, the exchange for trading of bankruptcy claims set up by the founders of failed cryptocurrency hedge fund Three Arrows Capital, is closing because the bankruptcy process of failed crypto exchange FTX has reached “recovery,” co-founder Su Zhu said. FTX said earlier this week that it planned to fully repay its customers, albeit using market prices from a date just after the crypto crash it caused. On some platforms, FTX bankruptcy claims were trading at 13 cents on the dollar in the months following its collapse.
Traders Prefer Bitcoin to Ether Despite Developing Spot ETH ETF; The ether-bitcoin forward term structure is downward sloping structure, which means that traders expect ETH to perform weaker than BTC as time goes by, one trader said.
The way futures for ether and bitcoin are currently priced shows traders expect ether to underperform bitcoin in the months ahead. Whether spot ETH ETFs will go live this year remains a question, as the SEC has yet to clarify whether the cryptocurrency is a security or a commodity. Market makers are likely to trade against ether price rises, capping the upside. A week ago, Standard Chartered (STAN) said that ether (ETH) could surge to $4,000 in the next three months, potentially outperforming bitcoin (BTC), as the U.S. SEC could approve spot exchange-traded funds (ETFs) tied to ETH in May. Traders, however, continue to prefer bitcoin over ether, anticipating continued weakness in the ether-bitcoin (ETH/BTC) ratio in the months ahead, futures data show.
U.S. Lawmakers Seek to Overturn SEC’s Crypto Accounting Policy
Jesse Hamilton – CoinDesk
Members of Congress are trying to delete the controversial U.S. Securities and Exchange Commission accounting bulletin that implies restrictions on companies that want to hold their customer’s crypto assets. Sen. Cynthia Lummis (R-Wyo.) and Reps. Wiley Nickel (D-N.C.) and Mike Flood (R-Neb.) introduced matching resolutions in the Senate and House of Representatives on Thursday that would formally disapprove of the accounting rule and conclude that it has no legal force.
Trump Says He Would Not Reappoint Powell as Fed Chair if Elected
Magan Crane – Bloomberg
Former President and likely Republican nominee Donald Trump reiterated Friday he would not appoint Jerome Powell to head the Federal Reserve if he is reelected in November, saying the chairman was looking to lower interest rates to help President Joe Biden return to his position. “No, I wouldn’t,” Trump said when asked about keeping Powell after his term expires in 2026, in an interview with Fox Business Network.
Trudeau Faces Daunting Path to Sale of Canada’s $26 Billion Oil Pipeline
Brian Platt, Robert Tuttle and Geoffrey Morgan – Bloomberg
Justin Trudeau has promised one of the largest government-led asset sales in Canadian history by divesting the Trans Mountain pipeline, a huge conduit that moves crude from the province of Alberta to the west coast. But the government faces a mounting set of challenges in unloading it – including high interest rates, a fight over costs with oil companies, and a looming election.
A Year Ago, a Star Banker Was Detained in China. He Has Just Resigned; Fan Bao, founder of China Renaissance, became ensnared in a corruption investigation last year
Rebecca Feng – Bloomberg
Fan Bao, a veteran Chinese dealmaker who was taken away by Chinese authorities last year, has resigned from his firm. He has stepped down as chairman and chief executive officer of China Renaissance due to health reasons and plans to spend more time on his family affairs, the firm said in a statement to Hong Kong’s stock exchange on Friday.
Man Behind Defunct BTC-e Exchange Once Popular with Criminals Faces U.S. Charges; Aliaksandr Klimenka is accused of processing billions in transactions for drug peddlers and cybercriminals throughout much of the 2010s.
Elizabeth Napolitano – CoinDesk
Aliaksandr Klimenka was arrested in Latvia and has appeared in a San Francisco court to face U.S. money-laundering charges. He and others are accused of laundering more than $4 billion tied to criminal activity until 2017. One of the men behind BTC-e, a now-defunct crypto exchange once popular with cybercriminals and money launderers, has been arrested and charged in the U.S., the Department of Justice (DOJ) said Thursday.
Hedge Fund Trader Jailed For Six Years in Danish Tax Scandal; British trader Guenther Klar sentenced to six years in prison; A total of nine people charged in Denmark over Cum-Ex trades
Sanne Wass – Bloomberg
A hedge fund trader was sentenced to six years in prison in Denmark in what’s the first conviction over Cum-Ex tax trades in the Nordic country in a scandal that cost the Danish treasury a total of 12.7 billion kroner ($1.9 billion). A Danish district court found Guenther Klar guilty of swindling the state out of 320 million kroner between 2012 and 2015 through dividend tax refund applications based on fictitious stock trades run by his company, the court said in a statement.
Commissioner Pham Announces Additional Executive Staff Appointments
CFTC Commissioner Caroline D. Pham today announced new executive staff appointments in her Washington, D.C. office. Taylor Foy joins Commissioner Pham’s team as a Senior Advisor and Nicholas Elliot has joined as a Confidential Assistant and Policy Advisor.
ASIC accepts court enforceable undertaking from buy now, pay later provider Elepay
ASIC has accepted a court enforceable undertaking from buy now, pay later provider Elevare Pay Easy Pty Ltd, trading as Elepay. Elepay offers funding to property owners for expenses relating to the preparation of their property for sale, including home improvements and renovation, design and marketing. Elepay’s buy now, pay later products do not include charges for providing credit, but do include a merchant fee payable to Elepay by a third-party supplier.
Inquiry into insurers’ responses to 2022 major floods claims
At the risk of stating the obvious, the issues being examined by this inquiry are big and complex. We will only see improvements to the problems described by witnesses who have appeared through coordinated effort by government, regulators, consumer groups and in particular the insurance industry. ASIC has a particular role within that complex system. We regulate general insurance as a financial service, and license companies that carry on a financial services business.
The FCA and Practitioner Panel joint survey for 2024 launches
The FCA and Practitioner Panel survey is being sent to a sample of regulated firms, to gather their feedback on how we are doing in regulating the industry.
MAS Proposes to Simplify Requirements and Facilitate Access to Simple and Cost-Effective Insurance Products
The Monetary Authority of Singapore (MAS)
The Monetary Authority of Singapore (MAS) today published a consultation paper to seek feedback on proposals to reduce the amount of information collected by financial institutions from their clients for selected insurance policies, when recommendations are made based on the Basic Financial Planning Guide (Guide). The proposals will enable consumers to meet their protection needs more easily through the purchase of simple and cost-effective insurance policies.
Investing and Trading
Oil Profits Keep Flowing for Exxon and Chevron; U.S. giants join Shell in posting strong annual earnings, but face uncertain outlook
Collin Eaton and Jenny Strasburg – The Wall Street Journal
Exxon Mobil and Chevron banked their second-highest annual profits in a decade last year, riding strong oil demand to solidify their standing among America’s most prosperous companies despite mounting risks. Exxon netted $36 billion and Chevron $21.4 billion. Exxon’s profitability trailed only Apple, Microsoft, Google parent Alphabet and a few others. Exxon and Chevron’s earnings were down more than a third from record levels in 2022, but still well above historic averages.
Exxon’s Foray Into Energy Trading Is Starting to Pay Off
Devika Krishna Kumar and Kevin Crowley – Bloomberg
Exxon Mobil Corp.’s expanding trading operation boosted fourth-quarter earnings by more than $1 billion. Exxon posted a $1.14 billion gain from trading, salving the $410 million wound inflicted by shrinking oil prices and fuel production, the company said Friday. The company’s trading strategies were particularly successful in crude oil and refined-products markets, said Chief Financial Officer Kathy Mikells.
Private Credit Touts ‘Fund-of-One’ to Court Wealth Giants
Kat Hidalgo and Silas Brown – Bloomberg
Many of the world’s biggest investors are increasingly turning to bespoke arrangements that cater to their likes and dislikes to grab a bigger slice of the $1.7 trillion private credit market. Lenders are finding new ways to court sovereign wealth funds and other deep-pocketed buyers through “fund-of-one” positions known as single-managed accounts. The arrangements often offer reduced fees, let investors cherry pick among their favorite regions and industries, dictate leverage or even decide how long they want to be locked in for.
Zuckerberg to Get $700 Million a Year From Meta’s New Dividend
Alex Barinka and Jack Witzig – Bloomberg
Meta Platforms Inc. Chief Executive Officer Mark Zuckerberg stands to receive a payout of about $700 million a year from the social media giant’s first-ever dividend for investors. Meta announced a quarterly cash dividend of 50 cents a share for Class A and B common stock beginning in March. With Zuckerberg holding about 350 million shares, he would take home about $175 million in each quarterly payment before taxes, according to data compiled by Bloomberg.
Japanese Retail Investors Pile Billions Into Indian Equities
Masaki Kondo, Hideyuki Sano and Yasutaka Tamura – Bloomberg
Japan’s retail investors are pouring money into Indian stocks amid bets the nation will be the next China. Total assets of India equity-focused investment trusts in Japan grew 11%, or ¥237 billion ($1.6 billion), in January, according to data compiled by Bloomberg. Factoring in the gains of Indian stocks on the yen basis last month, the figures suggest inflows of about ¥140 billion into India equity funds, while Japanese stock funds had almost no net inflows.
All Money-Market Funds Have the Same Yield, Right? Not Even Close; The difference between top-returning funds and the bottom is about 5 percentage points after the Federal Reserve’s rate-hike campaign
Derek Horstmeyer – The Wall Street Journal
Money-market mutual funds were ignored by many investors over the past decade or so as their yields hovered near zero. That has changed since the Federal Reserve began to raise its benchmark interest rate in 2022-but there has been wide variance between the top and bottom funds. Money-market funds invest in short-term debt instruments like three-month Treasury bills and repurchase agreements, or repos. These instruments are highly liquid, have low default risk and low interest-rate risk. And most important, their return usually follows the yield on the federal-funds rate, the central bank’s short-term benchmark rate.
Environmental, Social and Corporate Governance
UN climate chief calls on UK to ‘seriously re-engineer’ emissions plans
Sarah George – edie
Simon Stiell has set out the key actions needed ahead of the COP29 this winter, including strategy updates from the world’s wealthiest and fastest-growing economies that avoid “PR spin, rebranding or tinkering around the edges”. Stiell made the call to action in a major speech in Baju, Azerbaijan, this afternoon (2 February). The city will host the UN’s annual global climate summit, COP29, this November. He said that “the time has passed for business-as-usual, in all aspects of the world’s climate fight”, before setting out a series of actions needed in the next two years to lay the foundations for the long-term transition to a net-zero, nature-positive global economy. “The action we take in the next two years will shape how much climate-driven destruction we can avoid over the next two decades, and far beyond,” he stated.
Fixing Broken Food System Offers a $10 Trillion Windfall
Agnieszka de Sousa – Bloomberg
From farm to fork, food systems ensure that what we eat is grown, processed and delivered across the globe efficiently. But they take an enormous toll on our health, the planet and economies. About a 10th of global GDP is wiped out each year by hidden costs including undernutrition, productivity losses and environmental damage, new research shows. There’s some good news, though: overhauling systems could bring economic benefits of as much as $10 trillion a year. That can come through changing policies, helping people to eat healthier and investing in innovation – like better tech for smallholder farmers.
More guidelines on ESG ratings risks fragmentation; Many countries are establishing non-binding guidelines, with firmer regulation on the horizon
Barbara Pianese and Alex Janiaud – The Banker
At a glance. Many countries are setting out non-binding guidelines or codes of conduct, to bring trust and clarity to the sector. There is a danger of fragmentation as codes of conduct and regulations could actually conflict with each other There is growing scrutiny towards ESG ratings, with a general expectation that governments will regulate this area. Meanwhile, a number of countries and industry bodies are setting out non-binding guidelines or codes of conduct, which are seen as a stepping stone to bring trust and clarity to sustainability scores and data. The voluntary Code of Conduct for ESG Ratings and Data Products Providers, established by the International Capital Market Association and the International Regulatory Strategy Group, is an example in this direction. The code, launched in December 2023, already has 10 signatories, including Bloomberg, the London Stock Exchange Group and Moody’s.
UK carbon price falls to record low; Analysts fear inexpensive cost of polluting will deter investment in renewable energy
Rachel Millard – Financial Times
The cost of UK carbon emissions permits has fallen to an all-time low, raising fears it will weaken the incentive to build cleaner renewable energy sources. Futures contracts tracking the UK carbon price to December dropped to £31.48 per tonne of carbon dioxide on Monday, with analysts blaming the decline on the mild winter weather, slowing demand from industrial users and an excess of permits available to cover pollution in Britain.
German liberals pull plug on EU law to prevent supply chain abuses; FDP says Brussels’ sweeping legislation on enviromental and rights misdeeds would place a huge burden on business
Sam Jones and Alice Hancock – Financial Times
The future of sweeping EU legislation to punish companies for environmental and human rights abuses in their supply chains has been cast into doubt after German government ministers pledged to oppose it. Germany’s Free Democrats (FDP) – the third party in the coalition government of chancellor Olaf Scholz – said on Thursday they would force a German abstention on the proposed law at a vote next week in Brussels. Under the terms of the coalition agreement, the FDP’s consent is needed for the government to take a position in Brussels.
Chart: Is ESG Investing in Decline?
Dorothy Neufeld – VisualCapitalist
US Chicken Prices to Fall at Last Thanks to Green Fuel Boom; Meatpackers will be able to buy abundant animal feed for less; Shoppers set to see more grocery deals as savings trickle down
Gerson Freitas Jr, Tarso Veloso, and Isis Almeida – Bloomberg
A Boutique Hotel Helps Explain the Benefits of Businesses and Government Teaming Up to Conserve Energy; Businesses’ voluntary climate plans can do a little. Combined with state and local government policies, they can do a lot.
Dan Gearino – Bloomberg
UN climate chief calls for $2.4 trillion in climate finance
Valerie Volcovici – Reuters
EU leaders pledge more concessions to appease angry farmers; Tractors rolled into Brussels on Thursday to block major roads and squares close to summit gathering
Alice Hancock, Andy Bounds and Adrienne Klasa – Financial Times
The Toxic Legacy of an Ohio Train Derailment Is Still Unclear; One year after a Norfolk Southern train derailed in East Palestine, Ohio, residents have little information about long-term health impacts.
Zahra Hirji – Bloomberg
Tesla activist investors to seize on Elon Musk pay ruling
Ross Kerber – Reuters
European Banks’ $62 Billion Record Year Will Be Hard to Repeat
Nicholas Comfort – Bloomberg
European banks generated record profits last year thanks to a rapid succession of interest rate increases. It’s a feat many will struggle to repeat. Analysts surveyed by Bloomberg expect the combined net income for 11 of the biggest European banks to fall 6.3% this year from EUR56.5 billion ($61.5 billion) posted for 2023. That would still be the second-highest on records going back almost two decades.
JPMorgan’s Trades Threaten to Take Privacy Out of Private Credit
Hannah Levitt and Laura Benitez – Bloomberg
JPMorgan Chase & Co. is making the titans of private credit markets very anxious. The biggest US bank’s foray into trading private credit loans – an as yet largely untapped corner of the $1.7 trillion market – threatens to lift the veil on a world where a key selling point has been privacy of information about the debt.
Ex-Citi Bankers Target Family Offices Across Americas From Miami
Daniel Cancel – Bloomberg
A pair of former Citigroup Inc. executives have founded a new Miami-based firm to help single-family offices invest in real estate deals on both sides of the US-Mexico border. White Bridge Capital, led by Tommy Campbell and Regina Garcia Handal, is a private investment and advisory firm that’s tapping into the years of experience the two have working with wealthy families from their time in private banking and commercial real estate.
Inside Julius Baer’s Failed Gamble on Signa Real Estate Empire
Steven Arons, Myriam Balezou and Libby Cherry – Bloomberg
The more the leadership at Julius Baer Group Ltd. looked at their exposure to Rene Benko’s collapsed property empire, the worse the outlook for Chief Executive Officer Philipp Rickenbacher became. In November, the Swiss bank put a modest amount of money – 70 million Swiss francs ($81.3 million) – aside for eventual losses against loans to the Signa group. Rickenbacher subsequently proclaimed the bank wouldn’t be changing its appetite for risk.
The ghosts of last year’s regional bank collapse still haunt the banking sector
David Hollerith – Yahoo Finance
Federal Reserve officials on Wednesday removed language from a key policy statement qualifying the US banking system as “sound and resilient,” a phrase it had used since March 2023 to reassure the public that regional lending problems were contained. That same day, fresh turmoil at a New York regional bank offered a reminder that those problems are far from over.
Ex-UBS Banker’s New Hedge Fund to Bet on Share Sale Rebound
Bei Hu and Julia Fioretti – Bloomberg
Hong Kong billionaire Richard Li seeks to sell asset manager PineBridge -sources
Selena Li and Kane Wu – Reuters
Work & Management
Meta’s Stock Bounce Shows How Big-Ticket Job Cuts Pay Off; Mentions of job cuts are resurgent on earnings calls; Investors welcome firms positioning to protect margins
Michael Msika and Ryan Vlastelica – Bloomberg
Layoffs are being mentioned on US earnings calls at the highest rate since the pandemic – and as Meta Platforms Inc. shows, such cost cutting can pay off for investors. Efforts by the Facebook parent to slash costs and refocus its business upended the lives of thousands of workers, but has since helped propel its stock 340% from a 2022 low.
Why are Black men at greater risk for prostate cancer? Defense Secretary Lloyd Austin called the diagnosis a “gut punch.”
Berkeley Lovelace Jr., Patrick Martin and Lauren Dunn – NBC News
Defense Secretary Lloyd Austin apologized this week for not being more transparent about his prostate cancer diagnosis, acknowledging that the news had not only affected him but also shocked many others, “especially in the Black community.” “It was a gut punch,” Austin said Thursday at a news briefing.
Your appendix is not, in fact, useless. This anatomy professor explains
Selena Simmons-Duffin – NPR
It was the first day of spring break in 1992 in Phoenix, Ariz. and 12-year-old Heather Smith was excited for her family’s upcoming ski trip. But before Smith and her family had even packed their snow pants, she realized she didn’t feel good. “I woke up feeling just a little bit nauseous and I wasn’t sure why. Throughout the course of the day, I started to feel worse and worse, and started to develop pain in the abdomen,” she says.
China Stocks Swing Wildly in Chaotic End to Worst Week in Years
A sense of panic gripped Chinese investors on Friday as shares swung sharply in the final hours of trading before closing at a five-year low. Traders couldn’t pinpoint any fresh news behind the moves but cited concerns about forced sales by leveraged shareholders as among reasons for the sudden acceleration of losses in onshore markets.
China’s Investors Take Shots at State Media Spin as Stocks Fall
The Communist Party’s mouthpiece ran an editorial declaring China was brimming with “optimism” on Friday. Within hours, stocks tumbled and internet users clapped back with sarcasm. The People’s Daily ran a page three commentary in the morning touting the government’s efforts to improve people’s “livelihoods and well-being.” “The people’s sense of gain, happiness and security has been significantly improved,” it added, without giving a timeframe for the achievement.
A 5,800% Renewables Stock Boom Has Some Indian Investors Worried
Chiranjivi Chakraborty and Ishika Mookerjee – Bloomberg
India’s renewable energy stocks have enjoyed a scorching rally for the past two years as retail buyers pile in, but their extended valuations are flashing warning signs. SG Mart Ltd., a Gujarat-based solar and wind energy producer, has soared over 5,800% since November 2021 – when Prime Minister Narendra Modi announced that India aimed to boost clean energy to more than two-thirds of overall capacity. Gensol Engineering Ltd. has rallied more than 3,200%, Zodiac Energy Ltd. 1,000% and Waaree Renewable Technologies Ltd. 1,800% in that same period.
Mozambique Seeks to End 50-Year South Africa Hydropower Pact; Contract for electricity from Cahora Bassa ends in 2030; Mozambique to use renewable power for new industries
Antony Sguazzin and Matthew Hill – Bloomberg
Mozambique plans to end half a century of hydropower supply to South Africa’s state-owned electricity utility, raising risks for the continent’s most industrialized economy and threatening the viability of Africa’s second-biggest aluminum smelter. In the country’s yet-to-be published energy transition strategy, a copy of which Bloomberg has seen, Mozambique details the plan to secure the 1,150 megawatts of power it sells to South Africa from its Cahora Bassa plant for its own use.
Nigeria’s Naira Finds Path to Stability After Wild Week
Anthony Osae-Brown and Emele Onu – Bloomberg
Even by the standards of Nigeria’s byzantine foreign-exchange market, it’s been a crazy week for the naira. But as the dust settles, new measures are in place that could prove decisive for the fortunes of the world’s worst-performing currency.