Hits & Takes
John Lothian & JLN Staff
On Friday we published a video interview Thom Thompson did with Richard Sandor for our The History of Financial Futures series. Doc Sandor was an especially important person in the development of the earliest financial futures, including helping to plan the first start-up electronic exchange. He moved from the comforts of Berkeley, California, where he was teaching at the University of California, Berkeley, to the rough and tumble markets of Chicago to become the chief economist of the biggest commodity exchange in the world, the Chicago Board of Trade. The world was changing, and Doc Sandor helped facilitate that change with the introduction of Ginnie Mae and 30-Year Treasury bond futures. He is still trying to change the world with his new Ameribor futures at the American Financial Exchange, where he is the chairman and CEO.
IEX has responded to Nasdaq economist Phil Mackintosh’s attempt to discredit the D-Limit order type at IEX. It was an ill-fated attempt, making Nasdaq appear to be the challenger. IEX
Chief Market Policy Officer John Ramsey takes apart the Nasdaq attack with a post on Medium titled How Do You Measure a Fill? Nasdaq Attacks with a Dull Knife. Nothing like a good knife fight between exchanges.
JPX Group CEO issued a message regarding the transition to new market segments on April 4, 2022: Prime Market, Standard Market, and Growth Market. Here is the message from Kiyota Akira, Director & Representative Executive Officer, Group CEO, Japan Exchange Group, Inc.
Eurex has a webinar coming up on April 28 at 09:30 a.m. CT (U.S. and Canada) titled “Finding smarter ways to interact with today’s FX Futures liquidity.” Participants in the webinar are from Eurex, Flow Traders, MASA Capital, RCM-X, as well as economist Marc Chandler. The event is described as “a soup-to-nuts discussion across the entire FX trade cycle. Capture FX trade recommendations, ensure you are utilizing the most efficient FX products and implementation processes, and maximize your access to a new pool of deeper reliable FX liquidity.” You can register here.
Save the dates of October 11 to October 15 for LME Week 2021. There will be an option for an in-person attendance at the seminar and the LME dinner will take place, LME says.
Reuters has named its first woman to lead the news organization in 170 years. The new editor-in-chief is Alessandra Galloni, its global managing editor.
A blog called OptionsTradingIQ.com has a post titled “WHAT IS FRONT RUNNING?” I have been a front runner my whole life. Every time I try running backwards, I trip over something. Most people trip up when they front run too, in the markets.
Trading Technologies yesterday made their first matching donation of $2,500 to the JLN MarketsWiki Education GoFundMe campaign yesterday, matching the donations made by Charlie Carey, Ernesto Pinto, Drew Mauck, Brian Rice and Sterling Trading Tech. Thank you to TT for this matching donation and for their pledge to match up to $20,000 in donations 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
For the fixed income crowd: Robin Marshall, director of fixed income research at FTSE Russell, will lead a webinar on Wednesday, April 14, at 10 a.m. ET, titled, “After the Taper Tantrum; Key issues for Global Fixed Income in Q2, 2021.” Planned discussion topics include the economic impact of the recent increase in bond yields and whether or not central banks are behind the inflation curve. Register here.~SC
Also on Wednesday, April 14, at 15:30 CET, Covantis is holding a webinar on “The Future of Commodities Trading: Transforming Global Commodities Trade through Blockchain & Digitalisation.” The company says webinar speakers will focus on the global agriculture market — specifically on Brazil grains and oilseeds post-trade execution challenges. Register here.~SC
Richard Sandor Makes History With Financial Futures – John Lothian News
Richard Sandor is known as the “father of financial futures,” a name given to him by the Chicago Tribune and the Chicago Board of Trade for his work in helping to create 30-Year Treasury bond futures and many other financial contracts at the Chicago Board of Trade when he was their chief economist.
How Do You Measure a Fill? Nasdaq Attacks with a Dull Knife
John Ramsay – IEX
Those who follow equity markets closely know that D-Limit is an order type introduced by IEX in October of last year that is designed to help incentivize displayed quotes by protecting users of the order type from latency arbitrage. It does so by automatically adjusting the order’s price in very small time increments (adding up to several seconds during the trading day). We use a disclosed formula that detects when national best bid or offer prices are changing and displayed quotes are at high risk of being executed at “stale” prices. Latency arbitrageurs seek to selectively trade against displayed quotes in these same fleeting moments. During the more than 99% of the trading day when prices are not in transition, the order type functions like any other limit order. D-Limit has won widespread support and was approved unanimously by the SEC after an extensive approval process. We have published various analyses showing the strongly positive results from the use of D-Limit.
*****Knife fight between IEX and Nasdaq.~JJL
Credit for Climate Action
Margaret E. Peloso, Sarah E. Fortt, and Lindsay Hall – Vinson & Elkins LLP
The Fourth National Climate Assessment, issued by the U.S. Global Change Research Program, found that climate change is already having an impact on businesses and communities across the United States. The report also found that, without significant global mitigation and adaptation efforts, climate change will inflict increasing disruption and damage. International reports have made similar findings. As a result of these existing and anticipated disruptions, climate change has become a major business concern for many company executives and investors.
Read the report here.
*****Climate change is a major business concern, yes indeed!~JJL
LME Week 2021 – save the date
We are pleased to announce that LME Week 2021 will be going ahead in London this year, subject of course to UK government guidance. The LME Metals Seminar will be held on Monday 11 October (with options to attend in-person or virtually) and the LME Annual Dinner will take place on Tuesday 12 October.
*****How I wish I could attend in person.~JJL
Some Pubs and Shops Reopen in England, Raising Hopes for Economic Recovery; The pandemic has left Britain with deep economic wounds, but “Monday is a really positive start.”
Eshe Nelson – NY Times
For the past year, the British economy has yo-yoed with the government’s pandemic restrictions. On Monday, the next bounce began as shops, outdoor dining, gyms and hairdressers reopened across England for the first time in months.
*****This is a sure sign of progress.~JJL
Reuters Names a New Editor in Chief; Alessandra Galloni, its global managing editor, will be the first woman to lead the news agency in its 170-year history.
Katie Robertson and Edmund Lee – NY Times
Reuters has named Alessandra Galloni, one of the news agency’s highest-ranking editors, as its new editor in chief, the company announced Monday. Ms. Galloni, 47, will be the first woman to lead the Reuters newsroom in its 170-year history. As global managing editor since 2015, she already had a top position at one of the world’s biggest news organizations, with 2,500 journalists in 200 locations.
*****Progress takes time, lots of it.~JJL
Maybe SPACs Are Really IPOs; Also Bitcoin contango, GameStop NFTs, Goldman Small Cap Research and financial domination.
Matt Levine – Bloomberg
A popular and approximately true thing to say about special purpose acquisition companies is that a company that goes public through a SPAC can tell investors its financial projections, while a company that goes public through an initial public offering can’t. If you merge with a SPAC, the thinking goes, you can market yourself to investors based on projected future revenue and income; if you do a regular IPO (or a direct listing), you can only tell investors about your past financial results.
*****Really good article by Matt Levine about SPACs.~JJL
Monday’s Top Three
The most-read story on Monday was from Bloomberg’s Editorial Board, Europe Is Heading Toward a New Financial Crisis. No. 2 on Monday was a Yahoo Finance story that also was the second most-read on Friday, JPMorgan CEO Jamie Dimon outlines ‘serious weakness’ of virtual work. And the third most-read was from the Wall Street Journal, ETFs Could Rock the Bitcoin World.
202,691,022 pages viewed; 25,616 pages; 231,594 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
1,512 pages; 13,812 edits
The Reddit revolt: GameStop and the impact of social media on institutional investors; Following the explosive events surrounding GameStop in January, Annabel Smith unpacks the role of social media in this cautionary tale and its impact on institutional investors.
Annabel Smith – The Trade
The Reddit revolution in the US has drawn attention to the potential power that a growing force of retail investors can wield in stock markets when equipped by social media. Amateur investors have increasingly engaged with retail platforms in the last year, partly due to the pandemic leaving them idol at home, but also due to the newfound onslaught of information through social media and access to the market through retail brokerages and platforms such as Robinhood.
Citi, BofA Want to Save Traders’ Time With Fixed-Income Platform
Jennifer Surane and Lananh Nguyen – Bloomberg
New trading venue will initially focus on market for CLOs; The two banks plan to invite other dealers to participate
If Citigroup Inc. and Bank of America Corp. have their way, CLO traders are about to become a lot more productive. In the market for collateralized loan obligations, traders still spend the majority of their time helping clients manually compile bid lists for auctions known as “bid wanted in competition,” or BWICs. It’s a slow process, and there’s usually little revenue generated by the effort.
The mathematical improbability of Coinbase justifying a $100 billion valuation
Shawn Tully – Fortune
Nothing better epitomizes the zaniness ruling financial markets these days than the great expectations surrounding the Coinbase IPO slated for April 14. The euphoria over the first major cryptocurrency player to go public is of a piece with the damn-the-fundamentals craze that’s spawned the Tesla phenomenon and pushed U.S. equities to near-bubble territory. Wall Street analysts and Bitcoin-loving investors are forecasting that Coinbase could debut at a $100 billion valuation.
Britain to use Brexit ‘flexibility’ to make City of London more attractive
Huw Jones – Reuters
Britain will use its freedom from European Union rules to regulate markets flexibly and make the City of London even more attractive to global investors, the Financial Conduct Authority said on Tuesday.
Day Traders Know a Bubble When They See One, and They Want In
Vildana Hajric and Lu Wang – Bloomberg
E*Trade survey finds three-fourths see stocks in a bubble; Retail traders make up nearly a quarter of equity trades: BI
It’s a bubble, according to a survey of retail stock investors. And they don’t want to miss it. An E*Trade Financial survey found that roughly three-quarters of retail investors believe the market is “fully or somewhat” in a bubble, a 3 percentage-point increase from the previous quarterly poll. At the same time, bullish sentiment has increased, rising to pre-pandemic levels at 61%. “Optimism grew as the market hit new all-time highs, vaccines increased, stimulus measures continued, and earnings estimates are high,” said Mike Loewengart, managing director of investment strategy at the firm.
Banks, After Bracing for Disaster, Are Now Ready for a Boom; Analysts expect banks to post a big increase in profits, propelled by the release of rainy-day reserves
Ben Eisen – WSJ
The accelerating economic recovery is likely to boost bank profits. Encouraged by government efforts to pump money into the economy and signs that Americans are spending more, the largest financial institutions are expected to release some of the rainy-day money they set aside after the coronavirus pandemic hit. That will offer a jolt to their income in the first three months of the year.
Message from JPX Group CEO regarding Transition to New Market Segments
On April 4, 2022, the stock market operated by Tokyo Stock Exchange, Inc. will be restructured into three new market segments: Prime Market, Standard Market, and Growth Market. Today we have published a message from the Group CEO to mark the milestone of one year remaining before the market restructure.
Deliveroo to Dimon Stoke Fears About London’s Post-Brexit Future; The U.K.’s finance industry has taken a number of knocks in 2021
Harry Wilson – Bloomberg
If Deliveroo Holdings Plc’s listing was meant to hang an ‘Open For Business’ sign over the City of London, the opening day crash in the shares jarred somewhat with the message the U.K. had intended to send about post-Brexit Britain. Personally welcomed by Chancellor Rishi Sunak, the food delivery company’s initial public offering should have been a beacon to lure tech firms against competition from New York and Hong Kong, which have been winning the larger part of the business. Instead, concerns over the company’s governance and the treatment of its riders combined to produce one of the worst market debuts in City history.
Columbia Threadneedle agrees $845 million deal to acquire BMO European asset management business; The acquisition of BMO EMEA asset management arm will add $124 billion of AUM at Columbia Threadneedle, making it a top 35 global asset manager.
Hayley McDowell – The Trade
US asset management firm Columbia Threadneedle Investments has agreed to acquire the European investment business of Canada’s BMO Financial Group for $845 million in cash.
Regulators Step Up Scrutiny of SPACs With New View on Warrants; Blank-check companies may have to reclassify the instruments as liabilities, SEC says
Dave Michaels – WSJ
Some special-purpose acquisition companies have improperly accounted for warrants sold or given to investors, securities regulators said Monday, stepping up scrutiny of the popular vehicles. Warrants are a standard part of how SPACs raise money, including from hedge funds and other private investors. The potential return for early investors in SPACs is huge if the company’s shares rise because of various features of the structure, including warrants that give some investors the right to buy more shares at a preset price in the future.
Goldman Sachs unveils plan to open tech hub in Birmingham; New office in Birmingham at Goldman Sachs will have hundreds of staff across several technology divisions, starting with engineering.
Hayley McDowell – The Trade
US investment bank Goldman Sachs has said it will establish a new office in Birmingham in the UK later this year focused on technology and engineering. Goldman Sachs expects to have several hundred staff across several divisions based in the Birmingham office over time as part of its expansion in the UK, including a mix of new hires and existing employee transfers.
MarketAxess completes MuniBrokers acquisition; The acquisition of electronic venue MuniBrokers has expanded the municipal bond trading business at MarketAxess after terms were agreed in September.
Annabel Smith – The Trade
Fixed income platform provider MarketAxess has completed its acquisition of a central electronic venue for interdealer brokers and dealers, MuniBrokers. MarketAxess said the deal was completed on 9 April after it entered into a definitive agreement to buy MuniBrokers from Hartfield, Titus & Donnelly (HTD) in September last year.
Ex-CIA Director Says Criminals Will Move Away From Bitcoin in New Lobbying Group’s First Report; The new Crypto Council for Innovation hopes to inform and influence regulatory efforts worldwide.
Nikhilesh De – Coindesk
Potential money launderers aren’t really using bitcoin – and of those who are, many are likely to move away from the cryptocurrency due to the fact every transaction is recorded and visible to all. That’s one conclusion of a report published by the Crypto Council for Innovation, a new lobbying group hoping to inform and influence regulatory actions around the cryptocurrency sector. The report, penned by former Central Intelligence Agency Acting Director Michael Morell, is the first salvo in this effort.
U.K. to Examine Former Prime Minister David Cameron’s Greensill Role; Inquiry part of a broader investigation into government contracts with the bankrupt financing company
Max Colchester, Duncan Mavin and Julie Steinberg – WSJ
The U.K. government on Monday announced an independent review into contracts it handed the now-defunct Greensill Capital and the role played by former Prime Minister David Cameron in lobbying on the company’s behalf for access to taxpayer funds just months before its collapse. The government said that a review led by lawyer Nigel Boardman would look at the government’s use of supply-chain financing and Greensill, a spokesman for Downing Street said. The review will look at whether the company provided good value for taxpayers and how its contracts were secured.
OSC study finds pandemic has significant impact on retail investors
The Ontario Securities Commission (OSC) today released a new study that explores the impact of the pandemic on the behaviours and attitudes of retail investors. This study is part of the OSC’s ongoing efforts to monitor the impact of the pandemic on investors and markets. The COVID-19 pandemic has uniquely affected the financial situation of each retail investor. Most investors are simply trying to endure the hardship and uncertainty of the pandemic, but some see it as an opportunity to increase their participation in the capital markets.
Archegos Left a Sparse Paper Trail for a $10 Billion Firm; In its eight-year history, the family office that managed the fortune of Bill Hwang never publicly disclosed any stock ownership. Securities lawyers said that was highly unusual.
Matthew Goldstein – NY Times
Archegos Capital Management, the $10 billion firm that collapsed spectacularly last month, never publicly disclosed any stock investments. Even for a firm whose structure and strategy came with fewer regulatory requirements, that was a remarkable achievement.
Banks Might Get Partial Immunity to Tax Increases; Higher corporate tax rates will hit banks squarely, but the Biden Administration’s other priorities, like infrastructure and housing, could help lessen the blow
Telis Demos – WSJ
Banks are squarely in line to feel higher corporate tax rates. But they might get some pretty attractive offsets as well from the whole package. Among big companies, banks typically pay a relatively high effective tax rate, in part because they tend to generate a lot of their income in the U.S. So the Biden administration’s proposed jump from a 21% corporate tax rate to 28% would in theory translate into a roughly 6% hit to earnings per share for large banks, versus 5% for the S&P 500 broadly, according to analyst Brian Foran at Autonomous Research.
Wall Street Seen Leaning on Dealmakers as Trading Surge Ebbs
Jennifer Surane – Bloomberg
SPACS probably fueled record equity underwriting last quarter; Question is whether investment-banking boom can be sustained
Move over traders, it’s dealmakers’ time to shine. When Wall Street’s biggest banks begin reporting first-quarter earnings on Wednesday, they’re expected to post a 42% surge in investment-banking fees. With last year’s record trading bonanza now on the wane, dealmaking and a flood of reserve releases probably fueled a doubling of profits for the group, based on analysts’ estimates.
J&J Vaccinations Recommended Paused in U.S. on Clotting Concern
John Lauerman – Bloomberg
U.S. health officials recommended a pause in the use of Johnson & Johnson’s Covid-19 vaccine on concerns about rare and severe blood clotting side effects. A type of brain blood clot called cerebral venous sinus thrombosis was seen in combination with low levels of blood platelets in six women between the ages of 18 and 48, the U.S. Centers for Disease Control and Prevention and Food and Drug Administration said Tuesday in a joint statement. As of April 12, more than 6.8 million doses of the vaccine have been administered, the agencies said.
China Blasts U.S. Handling of Virus Pandemic as ‘Total Failure’
Beijing’s early response gave the world time, government says; China has had fewer deaths from virus, seen economy rebound
China criticized the way the U.S. handled the coronavirus as a “total failure,” escalating the war of words between the world’s two largest economies over the origins of the pandemic. “The U.S. response to the epidemic can be described as a complete mess and total failure,” Chinese Foreign Ministry spokesman Zhao Lijian said at a regular press briefing Tuesday in Beijing. “China served as a crucial line of defense for the world and bought precious time for the global fight against the virus.”
U.K. Strain Doesn’t Result in More Severe Covid-19 Among Hospitalized Patients, Study Finds; Researchers confirmed earlier findings of the B.1.1.7 variant’s contagiousness, but found it didn’t lead to more deaths or patients requiring ventilators in the study
Brianna Abbott – WSJ
The coronavirus variant first identified in the U.K. spreads more easily than older strains but doesn’t lead to more severe disease among hospitalized patients, a new study found. People infected late last year with the variant, known as B.1.1.7, had more virus in their bodies than patients infected with older strains, a sign the newer variant is more infectious, according to the study published online Monday by the medical journal the Lancet Infectious Diseases. But the patients hospitalized with B.1.1.7 didn’t die at higher rates or have worse outcomes overall.
Covid-19 brings wave of US tech entrepreneurs to Taiwan; Influx of Silicon Valley talent seeking refuge from pandemic boosts start-up community
Kathrin Hille – FT
When Jameson Hsu came to Taiwan from the San Francisco Bay Area in early 2020, he was fleeing Covid-19. “We thought we would stay a few weeks,” said Hsu, a serial tech entrepreneur from a Taiwanese-American family. A year later, he is still in Taipei after founding a new company and becoming involved in mentoring and investment for local start-ups.
A Mystery Under Study: How, Why And When COVID Vaccines Aren’t Fully Protective
Rob Stein – NPR
Ginger Eatman thought she was safe after getting her second COVID-19 vaccination in February. But she kept wearing her mask, using hand sanitizer and wiping down the carts at the grocery store anyway. A few weeks later, she noticed a scratchy throat. “By Wednesday morning, St. Patrick’s Day, I was sick. I had congestion — a lot of congestion — and some coughing,” says Eatman, 73, of Dallas, Ga.
Exchanges, OTC and Clearing
Clearstream receives CSDR licenses for international central securities depositories
The International Central Securities Depository (ICSD) is Clearstream’s third CSD to be licensed under CSDR; Clearstream’s German and Luxembourg CSDs already have CSD licenses; The Central Securities Depositories Regulation (CSDR) is an important one Step on the way to a harmonized European post-trade
Deutsche Börse Group’s post-trade service provider Clearstream today received CSDR licenses for its International Central Securities Depository (ICSD) Clearstream Banking SA. The approval is valid from April 12, 2021. This approval is an important step for Clearstream to meet the regulatory requirements under CSDR for all of its central securities depositories. The Central Securities Depositories Regulation (CSDR) aims to make markets more stable, transparent and efficient. It creates uniform regulation of securities processing and the corresponding infrastructures throughout the European Union (EU). The ordinance came into force in 2014; the implementation of the CSD-specific measures by the industry is in progress.
MIAX and Vesica Advance Strategic Partnership
MIAX’s Parent Holding Company Completes Follow-on Investment in Vesica Technologies and
Parties Finalize License Agreement for Options and Equities Data Analytics
HKEX Appoints Head of Post Trade Change
Hong Kong Exchanges and Clearing Limited (HKEX) is today (Tuesday) pleased to announce that Lisa O’Connor has joined the company as Managing Director, Head of Post Trade Change, reporting to Head of Post Trade, Glenda So. In her new role, Ms O’Connor will be working across HKEX’s clearing and settlement system initiatives, helping to leverage new technology to expand HKEX’s post trade services and enhance its service offering and process efficiency.
ICE Benchmark Administration Launches ICE SONIA Indexes to Assist UK Lending Markets Transition to SONIA
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of data, technology and market infrastructure, today announced that ICE Benchmark Administration Limited (“IBA”) has launched ICE SONIA Indexes for use by licensees, following a successful testing period. ICE SONIA Indexes have been developed to support the needs of the UK lending market as it transitions to SONIA, and are designed to provide a simple method for parties to calculate SONIA compound interest between any two dates and agree on their associated interest accruals.
Product Modification Summary: Expansion of SPAN Settlement DPL for E-mini Crude Oil Futures Contract – Effective May 03, 2021
Effective Sunday, May 2, 2021 for trade date Monday, May 3, 2021, and pending all relevant CFTC regulatory review periods, please be advised that the New York Mercantile Exchange, Inc. (NYMEX or EXCHANGE) will amend the SPANP STLMT DPL for E-mini Crude Oil Futures.
Application for Gold (Enhanced Delivery) Regularity
Notice is hereby given that the firm listed below has applied to become an Approved Depository for Gold (Enhanced Delivery) in the following region:
Product Modification Summary: Delisting of Two (2) Natural Gas (Platts IFERC) Futures Contracts
Effective April 12, 2021, the New York Mercantile Exchange, Inc. (NYMEX or Exchange) delisted the below products from CME Globex and CME ClearPort.
Delisting of Two (2) Natural Gas (Platts IFERC) Futures Contracts
Effective today, Monday, April 12, 2021, New York Mercantile Exchange, Inc. (“NYMEX” or “Exchange”) delisted two (2) natural gas (Platts IFERC) futures contracts (the “Contracts”) as set forth in the table below. There is no open interest in the Contracts.
Product Modification Summary: Amendments to the Options on Black Sea Wheat Financially Settled (Platts) Futures and Options on Black Sea Corn Financially Settled (Platts) Futures Contracts to Convert from European Style to American Style Expiration
Amendments to the Options on Black Sea Wheat Financially Settled (Platts) Futures and Options on Black Sea Corn Financially Settled (Platts) Futures Contracts to Convert from European Style to American Style Expiration.
New Product Summary: Initial Listing of the USD Malaysian Crude Palm Oil Day 15th Bullet Futures USD Malaysian Crude Palm Oil Day 10th Financial Options Contracts – Effective May 03, 2021
Initial Listing of the USD Malaysian Crude Palm Oil Day 15th Bullet Futures USD Malaysian Crude Palm Oil Day 10th Financial Options Contracts
NGX Group Launches New Brand Identity And Website
Nigerian Exchange Group (NGX Group) Plc, a leading integrated market infrastructure Group in Africa, has announced the launch of its new corporate brand identity and website today, 13 April 2021. The launch of the new identity follows the demutualisation of The Nigerian Stock Exchange and the resulting creation of the non-operating holding company NGX Group Plc and its subsidiaries: Nigerian Exchange (NGX) Limited, the operating exchange; NGX Regulation (NGX RegCo) Limited, the independent regulatory arm of the Exchange; and NGX Real Estate (NGX RelCo) Limited, the real estate company.
Boerse Stuttgart Digital Exchange Reaches Trading Volume Of EUR 0.5 Billion In 2021 – Record Volumes In February – Around 15,000 Users Admitted To Trading
Boerse Stuttgart Digital Exchange (BSDEX) is Germany’s first regulated trading venue for digital assets and has now reached a trading volume of EUR 0.5 billion since the beginning of 2021. In February, BSDEX also set new records for daily trading volumes exceeding EUR 15 million.
Torstone Technology wins Best Sell-Side Back Office Platform at Waters Sell-Side Technology Awards
Torstone Technology, a leading SaaS provider of post-trade securities and derivatives processing, announced today that its cloud-based platform has been awarded Best Sell-Side Back Office Platform at the Waters Technology Sell-Side Technology Awards. The Torstone platform was recognised for delivering global sell-side clients a flexible, modern solution for improving and consolidating post-trade processing across multiple asset classes, entities and functions in real-time. Torstone’s back office solution has been critical in helping banks to move seamlessly from siloed legacy systems to an open cloud-based infrastructure against a backdrop of increasing volumes of data and regulation.
Client Story: Rothschild & Co Asset Management Europe On Jump Solutions
After an in-depth market study, Rothschild & Co has decided to use the unified JUMP software, hosted by JUMP on its new SaaS platform via a Private Cloud, to respond to the challenges involved in the growth and development of its offer. JUMP represents a scalable solution that is easy to use and offers unique functional possibilities.
Goldman Sachs to open Birmingham office in tech push; US investment bank will create hundreds of jobs in largest UK base outside London
Andy Bounds – FT
Goldman Sachs is opening its biggest office in the UK outside London, creating hundreds of technology jobs in Birmingham. The US investment bank’s decision to open a technology centre in the Midlands city is a sign of growing interest among blue-chip employers in cheaper regional cities with a plentiful supply of graduates.
How Payment Processor Stripe Became Silicon Valley’s Hottest Startup; Stripe has turned a humdrum business—helping companies accept credit-card payments—into a blockbuster valuation
Peter Rudegeair – WSJ
The pandemic threatened to clobber Stripe Inc. Instead, it turbocharged the company. Stripe processes payments for e-commerce companies, keeping a tiny cut of each purchase as a fee for its services. When stay-at-home orders early in the pandemic caused spending to plunge and refund requests to skyrocket, the outlook wasn’t great.
Investor Pushes Alphabet for Whistleblowing Review; Citing recent red flags, Trillium Asset Management files another shareholder proposal urging tech giant to review protections for employees voicing human rights concerns
Mengqi Sun – WSJ
An investment group is again pushing Google’s parent Alphabet Inc. to assess the effectiveness of its internal whistleblowing program, saying recent incidents suggest the company may have potential internal cultural or ethics problems. For the second year in a row, Trillium Asset Management LLC submitted a shareholder proposal to Alphabet asking the tech giant’s board to oversee a third-party review of the effectiveness of the company’s whistleblower policies in protecting human rights.
Itiviti’s OEMS named Best Sell-Side Front Office Platform at WatersTechnology Awards 2021
Itiviti Group AB
Itiviti, a leading trading technology and service provider to financial institutions worldwide, today announced that Itiviti’s order and execution management system (OEMS) was named Best Sell-Side Front Office Platform at the WatersTechnology’s Sell-Side Technology Awards 2021.
BlueShore Financial Expands Relationship With Temenos To Further Its Digital Transformation
Temenos (SIX: TEMN), the banking software company, today announced that BlueShore Financial, a boutique full service financial institution, is digitally transforming with Temenos. Powered by Temenos Infinity, the market-leading omnichannel digital banking product, BlueShore will extend its ‘HighTech-HighTouch’ experience to clients by leveraging explainable artificial intelligence (XAI). BlueShore will replicate the in-branch experience of its Financial Spa™ Branch designed around client-centered amenities, personalized service and expert advice, across all channels and devices, from onboarding to servicing through to retention.
Jacqueline de Rojas Appointed As Chair Of The Board At Metapraxis
Metapraxis, the financial analytics technology business, today announces that Jacqueline de Rojas, CBE, previously an advisor to Metapraxis, has been appointed as Chair of the Board of Directors.
LiquidityBook Receives Minority Investment from Primus Capital; Growth funding will accelerate product development, further regional expansion and support substantial additions to the organization
LiquidityBook, a leading Software-as-a-Service (SaaS)-based provider of buy- and sell-side trading solutions, announced today that Primus Capital, a growth-oriented private equity firm, has made a minority investment in the company. The capital will enable LiquidityBook to further scale its business and serve a broader array of fund managers and financial institutions through its industry-leading portfolio, order and execution management system (“POEMS”) platform.
Q1 2021 Industry Trends: Institutional Interest in ETH Ramps Up
Christine Kim – Coindesk
Ether (ETH) had an outstanding first quarter in terms of performance, doubling in market capitalization and reaching a new all-time high price. Riding that momentum, ether prices have continued to soar, albeit in smaller daily increments, to reach several new all-time highs of close to $2,100 in recent days. What is equally noteworthy about ether’s performance this past quarter, outside of its price gains, is the institutional attention the crypto asset seems to be attracting and the market tools that have launched to support its trading as a derivatives product.
Coinbase Sails Toward $100 Billion Valuation on Crypto Frenzy
Matthew Leising and Benjamin Bain – Bloomberg
‘Holy Grail’ will be to build on new wave of corporate users; XRP listing history shows pitfalls of murky U.S. regulation
Looks like Wall Street is about to get 100 billion new reasons to believe in Bitcoin. Coinbase Global Inc., the fast-growing exchange at the center of the speculative frenzy in cryptocurrencies, is expected to go public this week at a staggering valuation of about $100 billion. That’s more than the venerable New York Stock Exchange and Nasdaq Stock Market combined — for a company that didn’t even exist a decade ago.
Binance Coin Surge Elevates Token to Ranks of Crypto Titans
Olga Kharif – Bloomberg
Crypto exchange tokens rally ahead of Coinbase’s public debut; Trading and Binance Smart Chain fuels BNB’s rise toward top
Binance Coin has strengthened its position as one of the world’s largest cryptocurrencies after a 53% rally in the past seven days to the third spot behind Bitcoin and Ether. Issued by the world’s largest crypto exchange, the digital coin commonly known as BNB now has a market capitalization of $87 billion, according to CoinGecko.com. That makes it the third-most valuable cryptocurrency behind Bitcoin at $1.1 trillion and Ether at $252 billion. The token has traded places with Tether and other coins for weeks, underscoring BNB’s increasing importance in the crypto ecosystem.
MicroStrategy Pivots to Bitcoin Payouts for Board of Directors
Kamaron Leach – Bloomberg
Company’s four non-employee directors to be paid in crypto; Stock in MicroStrategy has surged along with digital asset
MicroStrategy Inc. is pivoting to payouts in Bitcoin for its four independent directors, marrying management closer to the software maker’s strategy of investing in the largest cryptocurrency. Compensation fees for each board member will be based in U.S. dollars and will be converted into Bitcoin during the time of payment. The move is the software-analytics developer’s “commitment to Bitcoin given its ability to serve as a store of value,” the Tysons Corner, Virginia-based company said in a filing.
The art market’s rush for NFTs: El Dorado or fool’s gold? Non-fungible tokens are disrupting the art world — but there are risks as well as rewards
Georgina Adam – FT
Interest in NFTs exploded a few weeks ago when one of these tokens, representing a digital work of art by the contemporary artist Beeple, fetched a headline-grabbing $69.3m in an online auction at Christie’s.
NFTs Are Selling for Millions.; Are They Warming the Planet, Too? Making the digital artworks requires colossal amounts of computing power, and that means greenhouse gases.
Hiroko Tabuchi – NY Times
When Chris Precht, an Austrian architect and artist, first learned about nonfungible tokens, the digital collectibles taking the art world by storm, he was so enthralled, he said, he “felt like a little kid again.” So Mr. Precht, who is known for his work on ecological architecture, was devastated to learn that the artworks, known as NFTs, have an environmental footprint as mind-boggling as the gold-rush frenzy they’ve whipped up.
NYC Real Estate Mogul Secures $6 Billion in Gold to Back New Cryptocurrency
Devon Pendleton – Bloomberg
New York City real estate mogul Kent Swig has secured a minimum of $6 billion in gold reserves to back his new cryptocurrency. The value of the digital token, DIGau, will be pegged to the market price of the precious metal, guaranteed by liens Swig and partner Stephen Braverman’s company, Dignity Gold, secured against mining claims in Nevada and Arizona. “Gold was one of the original rock-solid backings of all currencies,” Swig, 60, said in an interview. “We’re not reinventing the wheel here. What we’re doing is applying the world’s stable backing of a lot of things to a very advanced technology.”
JPMorgan Says Bitcoin ETFs Could Shrink CME Futures Premium; “Launching a bitcoin ETF in the U.S. will be the key to normalizing the pricing of bitcoin futures,” according to JPMorgan.
Omkar Godbole – Coindesk
No fewer than nine applications for a bitcoin (BTC, +4.56%) exchange-traded fund are pending before the U.S. Securities and Exchange Commission, including a new filing from Michael Novogratz’s Galaxy Digital. At the most basic level, the vehicles would give investors a way to bet on the largest cryptocurrency with the ease of buying a stock through a brokerage account. But JPMorgan, the largest U.S. bank, has identified another potential benefit to the approval of a bitcoin ETF: Helping to normalize the bitcoin futures premium on the Chicago-based CME and other exchanges. The premium represents the difference between the futures-contract price for bitcoin and the current price as traded on major cryptocurrency exchanges.
Thailand’s Fourth Largest Bank by Assets Exploring DeFi Offering: Report
Sebastian Sinclair – Coindesk
In a bid to grow its business, Thailand’s fourth-largest bank by assets, Kasikorn (KBank), is reportedly furthering exploration of a project that seeks to bypass financial intermediaries using decentralized finance (DeFi). In collaboration with the Stock Exchange of Thailand, the project, known as Kubix, has been set up to run as an initial coin offering portal for digital tokens, according to a report by the Bangkok Post on Monday. The report cites chairman Ruangroj Poonpol of KBank’s technology arm, Kasikorn Business Technology Group (KBTG) who said DeFi is a “key exploration” for the banking group throughout 2021.
After failed token sale and $1B bond offering, Telegram is reportedly eyeing an IPO
Kollen Post – The Block
Encrypted messaging app Telegram is reportedly looking to go public. Citing unnamed sources involved in the process, Russian news outlet Vedomosti broke the news on April 11. The timing is notable, given that at the end of March, Telegram’s founder and CEO Pavel Durov announced via his Telegram channel that the firm had sold $1 billion in bonds. Resistant to the sale of user data and ad space, Telegram has long suffered from a lack of clear revenue flow. Durov, along with his brother Nikolai, first made their fortunes with Russian social media site VKontakte.
Mercury Digital Assets Partners with DV Chain to Enhance Crypto Liquidity Provision
BusinessWire (press release)
Mercury Digital Assets (“Mercury”), a technology provider for digital asset markets, today announced its partnership with DV Chain to further enhance access to diverse pools of OTC crypto liquidity. Mercury’s clients can now access DV Chain’s institutional-grade liquidity via Mercury’s BEACON OEMS platform or via API. Clients can place RFQ and limit orders, allowing flexibility in how traders using Mercury’s BEACON platform can incorporate DV Chain’s liquidity into their trading workflows and strategies. OTC brokers and dealers automating their trading desks with BEACON can seamlessly trade with DV Chain as a liquidity provider while delivering bespoke 24/7 pricing and a customized trading experience to their clients. Adding DV Chain, and DV Chain’s non-U.S. affiliate, DALP (Digital Asset Liquidity Provider), to Mercury’s RFQ network increases accessible liquidity for those looking to trade large and/or complex orders in the cryptocurrency derivatives space.
Digital Asset Exchange Archax Selects NorthRow To Enhance Client Due Diligence
Cryptocurrency has gone mainstream as financial institutions look to invest in the digital asset space. A recent report by Fidelity Digital Assets found that 80% of U.S and European traditional investors consider cryptocurrency to be an appealing portfolio prospect. Also, the tokenisation of assets using blockchain technology to create regulated digital securities or security tokens and bring liquidity to markets is gaining traction.
Wall Street Is Donating to This D.A. Candidate. Is That a Problem? Tali Farhadian Weinstein built up a $2.2 million war chest with help from hedge fund managers, far more than her rivals in the Manhattan district attorney race.
Jonah E. Bromwich – NY Times
Even had she not raised more money than her rivals, Tali Farhadian Weinstein would be a formidable candidate in the nine-way race to become the Manhattan district attorney, perhaps the most high-profile local prosecutor’s office in the country.
Executives Call for Deep Emission Cuts to Combat Climate Change; More than 300 corporate leaders will ask the Biden administration to nearly double the emission reduction targets set by the Obama administration.
Lisa Friedman – NY Times
More than 300 businesses, including Google, McDonalds and Walmart, are pushing the Biden administration to nearly double the United States’ target for cuts to planet-warming emissions ahead of an April 22 global summit on climate change. In a letter to President Biden, expected to be released Tuesday morning, chief executive officers from some of the nation’s largest companies will call on the administration to set a new Paris Agreement goal of slashing the nation’s carbon dioxide, methane and other planet-warming emissions at least 50 percent below 2005 levels by 2030.
Defying Republicans, Big Companies Keep the Focus on Voting Rights; A coalition of law firms has joined business leaders in wanting to use their clout to oppose state legislation that would make it harder to vote.
David Gelles and Andrew Ross Sorkin – NY Times
With Republicans in Texas and other states continuing to advance restrictive election legislation, corporate chieftains around the country have stepped up their efforts in recent days to oppose such laws and defend voting rights. Two prominent Black executives are enlisting major corporations to sign a new statement opposing “discriminatory legislation,” and PayPal and Twilio said Monday that they had agreed to add their names. Google, Netflix, BlackRock and Ford Motor will also sign, according to people familiar with the situation. Other companies were in discussions to do so, two people familiar with the deliberations said.
Paying for the pandemic: US politicians gamble on sports betting; Legislators want online gambling to help plug their budgets but a spike in addiction could lead to a backlash
Alice Hancock and Sara Germano – FT
Legislators in New York state barely slept before Easter. In the nights running up to the weekend holiday, the lights were still on in the state government’s Albany offices at 3am, as politicians battled over whether to open the door to online sports betting — a proposition unthinkable last year, but now an essential part of the state’s $212bn annual budget.
Smartmatic says disinformation on Fox News about the election was ‘no accident.’
Jonah E. Bromwich – NY Times
The election technology company Smartmatic pushed back on Monday against Fox News’s argument that it had covered the aftermath of the 2020 presidential election responsibly, stating that Fox anchors had played along as guests pushed election-related conspiracy theories. “The First Amendment does not provide the Fox defendants a get-out-of-jail-free card,” Smartmatic’s lawyer, J. Erik Connolly, wrote in a brief filed in New York State Supreme Court. “The Fox defendants do not get a do-over with their reporting now that they have been sued.”
Effective date for Interpretive Notice regarding Members’ use of third-party service providers
NFA recently adopted an Interpretive Notice entitled NFA Compliance Rules 2-9 and 2-36: Members’ Use of Third-Party Service Providers. The Interpretive Notice requires each Member outsourcing regulatory functions to adopt and implement a supervisory framework over its outsourcing function to mitigate outsourcing-related risks. The Interpretive Notice will become effective on September 30, 2021.
ASIC takes action to wind up SA Services & PW Pty Ltd and Orphans Asia Pty Ltd following scam investigation
ASIC has successfully applied to the Federal Court of Australia to wind up two NSW-based companies, SA Services & PW Pty Ltd (SA Services) and Orphans Asia Pty Ltd (Orphans Asia). SA Services and Orphans Asia came to ASIC’s attention during the investigation into PW Kitt Co Pty Ltd (PW Kitt Co) and Larry Dawson, both the subject of ASIC action in the Federal Court of Australia last year (20-187MR).
ESMA updates its LEI Statement
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has published today an updated statement on the implementation of LEI requirements for third-country issuers under the SFTR reporting regime.
ESMA issues latest double volume cap data
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has today updated its public register with the latest set of double volume cap (DVC) data under MiFID II.
Short Interest — What It Is, What It Is Not.
What Is Short Interest?
To understand what short interest is, we should first talk about short sales. Put simply, a short sale involves the sale of a stock an investor does not own. When an investor engages in short selling, two things can happen. If the price of the stock drops, the short seller can buy the stock at the lower price and make a profit. If the price of the stock rises, the short seller will lose money. An investor may engage in short selling for many reasons, such as to profit from a decline in the price of a stock or to hedge the risk of other positions.
Post-Brexit changes for some consumer credit firms from 1 June 2021
We are reminding firms about changes certain consumer credit firms will have to make to pre-contract consumer credit information forms. These changes will need to be made from 1 June 2021. If they are not made, the credit agreement may only be enforceable against the debtor on an order of the court under the Consumer Credit Act 1974.
Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”)
John Coates, Paul Munter – SEC
In a recent statement, Acting Chief Accountant Paul Munter highlighted a number of important financial reporting considerations for SPACs. Among other things, that statement highlighted challenges associated with the accounting for complex financial instruments that may be common in SPACs. Additionally, CF staff also issued a recent statement highlighting key filing considerations for SPACs.
FMA provides breakdown of financial advice providers in the new regime
The Financial Markets Authority (FMA) has provided transitional licence numbers under the new financial advice regime, revealing how many financial advice providers are operating in New Zealand. It follows the start of the new financial advice regime last month. An FMA infographic shows there are just over 3,000 financial advice businesses (comprising of 1,807 Financial Advice Providers and 1,200 Authorised Bodies), which are engaging 10,743 financial advisers and 12,287 nominated representatives.
Securities Commission Malaysia Reprimands Remitano And Seeks To Block Access To Its Website
The Securities Commission Malaysia (SC) has reprimanded Remitano for operating a digital asset exchange (DAX) in Malaysia without authorisation from the SC. The entity has also being included on the SC’s Investor Alert list.
Investing and Trading
Europe’s Half-Century Bond Bonanza Shows Rush to Lock in Yields
John Ainger and James Hirai – Bloomberg
U.K. and Austria offer 50-year debt at auction, syndication; Window to sell long-dated debt is closing, Nordea Bank says
Austria and the U.K. are the latest European governments rushing to lock in long-term borrowing costs before yields rise any further. Demand for Britain’s longest-dated gilt fell to the lowest level since July 2018 at auction on Tuesday, with bids for the bond maturing in 2071 coming in at more than two times the 1 billion pounds ($1.38 billion) on offer. Austria received over 14 billion euros of orders for 50-year debt, less than half the record demand seen for a 10-year bond in January.
JPMorgan Chief Strategist Says Markets May Be at Long-Term Turning Point
Joanna Ossinger – Bloomberg
Switch to value more profound than appreciated, Kolanovic says; Europe, Japan, emerging markets may outperform in second half
Global markets may have reached an inflection point with value shares set to outperform growth ones for a significant period, according to JPMorgan Chase & Co. chief global markets strategist Marko Kolanovic. The rebound in value driven by the recovery from the pandemic, falling volatility and fiscal and monetary policy support is set to last for some time as the various factors work their way through the system, Kolanovic said in an interview. These could trigger a long-term investment shift toward being more cyclical and reflationary, he said.
Working From Home Is Making Power Trading More Tricky in Europe
Lars Paulsson – Bloomberg
Traders challenged by predicting how lockdowns affect demand; Electricity load growth set to rebound this year in Europe
As millions of people across Europe are pondering when and how they will return to offices in the post-pandemic world, the region’s power traders are trying to figure out what a continuation of working at home will mean for their markets. The difficulty of making predictions about how people will behave is highlighted clearly in the chart below. It shows how demand during the pandemic in Germany, Europe’s biggest power market, at times deviated significantly from the expected load.
Red Lights Flashing in Credit Markets as Huarong Concern Grows
Kyungji Cho and Ameya Karve – Bloomberg
Credit markets in Asia have been shaken by a selloff in one of China’s largest bad-debt managers, raising concern that other heavily leveraged borrowers may also stumble. The Markit iTraxx Asia ex-Japan credit-default swap index of investment-grade bonds widened about 2 basis points, after recent reports of a looming restructuring at bad-debt manager China Huarong Asset Management Co., traders said. The gauge is set for a seventh day of increases, the longest streak since December 2018, and is at its highest since October last year, according to data from CMA.
China Huarong’s Worsening Bond Rout Stokes Market Contagion
Richard Frost and Rebecca Choong Wilkins – Bloomberg
Other Chinese dollar bonds also slump, Asia credit risk widens; Moody’s, Fitch join S&P in putting Huarong ratings on review
Growing panic over the financial health of one of China’s largest bad-debt managers spilled into the broader market, as traders circulated a Caixin report that openly considered the worst-case scenario for the company. China Huarong Asset Management Co.’s $300 million 3.375% bond due May 2022 tumbled 13.1 cents on the dollar to 76.1 cents, while a 5% bond maturing in 2025 fell 12.1 cents to 77.3 cents, Bloomberg-compiled prices show. In a commentary dated Monday, Ling Huawei, managing editor of Caixin Media and Caixin Weekly, discussed the possibility of a China Huarong bankruptcy.
Yellen Dropping China Manipulator Label Won’t Help Weak Yuan
Secretary will decline to name China as FX manipulator: report; Dollar, foreign flows, other aspects of tensions to drive yuan
China’s yuan is unlikely to escape its current bout of weakness, even with help from U.S. Treasury Secretary Janet Yellen. While Yellen’s decision not to name China as a currency manipulator removes a flash point, analysts say that tension between the two countries have moved to strategic issues such as technology leadership. The yuan is also weighed down by other factors including slowing capital flows and a narrowing yield spread with the dollar.
Grab to Go Public in Record-Breaking SPAC Merger; Deal values Southeast Asian ‘superapp’ operator at close to $40 billion
Jing Yang – WSJ
Grab Holdings Inc. said it would go public on the Nasdaq Stock Market by merging with a special-purpose acquisition company, securing a near-$40 billion valuation in a new milestone for the SPAC boom that has swept U.S. financial markets. The $39.6 billion deal to list Grab, a ride-hailing, food-delivery and digital-wallet group that operates across much of Southeast Asia, is by far the biggest involving a blank-check company and means Grab’s valuation has more than doubled in just 18 months. The merger also comes alongside a $4 billion-plus fundraising, which is the largest-ever share sale by a Southeast Asian company in the U.S.
Environmental, Social and Corporate Governance
Fed Is Taking On a Racist Legacy in the Field of Economics
Catarina Saraiva – Bloomberg
Federal Reserve hosts conference on racism in economics; Just 13 Black Americans earned an economics doctorate in 2019
As the pandemic slammed the Black community and amplified the conversation around racism in America, the economics profession grappled with an uncomfortable truth: that its historical roots and practices today are mired in systemic racial bias. Last summer, the shock of George Floyd’s death and other instances of police brutality ignited a national debate about inequality. Topics like the racial wealth gap became part of everyday discourse.
How to Think About Negative Emissions in the Climate Fight; Removing carbon dioxide from the air will be necessary to meet climate goals, but cutting emissions should be the priority
Akshat Rathi – Bloomberg
“At some point we’re going to get to zero,” U.S. climate envoy John Kerry said about carbon-dioxide emissions last week. “Once we have the ability to, we need to be net negative.”
Venture Capitalists Bet on Houston as Gateway to Post-Oil World
Joe Carroll – Bloomberg
Energy Transition Ventures backed by South Korea’s GS Group; Company to explore electric-vehicle charging, carbon capture
Veteran Silicon Valley venture capitalists Neal Dikeman and Craig Lawrence plan to accelerate the end of the fossil-fuel era from an unlikely perch: Houston. The U.S. oil epicenter is lacking in startup talent to match its hoards of investment capital and technical expertise, a gap Dikeman and Lawrence intend to fill. With financial backing from South Korean conglomerate GS Group, Energy Transition Ventures plans to explore post-fossil fuel technologies from electric-vehicle charging to carbon capture and hydrogen fuel.
Black marks for aluminium as mining remains behind on climate goals; None of the world’s most carbon-intensive sectors are doing enough to meet 2050 targets, report finds
Camilla Hodgson – FT
No corporate sector is cutting emissions fast enough to meet 2050 net zero targets, with some big companies actually increasing their carbon intensities since the Paris accord on climate change, according to one of the leading climate action investor groups.
Credit Suisse Has One Easy Card It Can Play; The Swiss bank has neglected its asset management arm, while potential suitors abound. Some kind of deal makes sense.
Mark Gilbert – Bloomberg
Credit Suisse Group AG’s incoming Chairman Antonio Horta-Osorio inherits a firm reeling in both financial and reputational terms from its entanglements with Archegos Capital Management and Greensill Capital. There’s one decision that shouldn’t take long for him to make: Freeing the Swiss bank’s asset management unit to take advantage of the current hot market for money management firms.
Credit Suisse Slashed Bonus Accruals to Limit Archegos Impact
Marion Halftermeyer – Bloomberg
Bank set aside hundreds of millions less for compensation; It could reverse the cuts if business recovers later this year
Credit Suisse Group AG slashed the amount of money set aside for employee bonuses by hundreds of millions of dollars and used the savings to limit the financial hit from the implosion of Archegos Capital Management. Cuts to accruals for staff compensation and other one-off items added about $600 million to underlying profit before tax for the first quarter, which is expected to be just over $3.7 billion, a person familiar with the matter said, asking for anonymity to discuss internal information.
Leon Black attended Apollo Global meeting days after resignation; Billionaire left investment group to quell investor dissent over his ties to Jeffrey Epstein
Mark Vandevelde, Sujeet Indap and Andrew Edgecliffe-Johnson – FT
Leon Black quietly attended a meeting of top executives at Apollo Global Management days after he resigned from all his positions at the company in an effort to quell investor unease over his ties to the late paedophile Jeffrey Epstein. The group’s executive committee had been scheduled to hold its monthly meeting during the week of March 29, according to several people with knowledge of the participants’ schedules.
Deutsche Bank dodges bullets and goes mainstream; Germany’s biggest lender outperforms rivals and is no longer ‘sick bank of Europe’
Patrick Jenkins – FT
It is a striking paradox that postwar Germany has achieved sustained success as an economy, even with a flailing banking sector, headed by the flag-carrying Deutsche Bank, to underpin it. But there are signs the contradiction may be resolving.
Credit Suisse counts $1.2bn exposure to Sanjeev Gupta’s steel empire; Swiss lender promises legal action to protect investors’ interests
Owen Walker – FT
Credit Suisse’s suspended supply-chain finance funds had $1.2bn of exposure to Sanjeev Gupta’s steel empire, the bank disclosed for the first time on Tuesday, promising that it will consider legal action to protect investors’ interests. The Swiss lender’s four supply-chain finance funds ran a total of $10bn of assets when they were frozen on March 1. Their suspension helped trigger the collapse of controversial supply-chain financing firm Greensill Capital and left Gupta’s GFG Alliance teetering on the brink of collapse.
Columbia Threadneedle buys European investment arm of Canada’s BMO; US asset manager seeks to strengthen its position in Europe in latest example of industry consolidation
Chris Flood – FT
US asset manager Columbia Threadneedle has agreed to buy the European investment arm of BMO Financial Group of Canada for $845m in cash, the latest example of mergers and acquisitions activity that is sweeping across the fund management industry.
BGC Partners’ First Quarter 2021 Financial Results Announcement To Be Issued Prior To Market Open On Thursday, April 29, 2021
BGC Partners, Inc.
BGC Partners, Inc. (NASDAQ: BGCP) (“BGC”), a leading global brokerage and financial technology company, today announced the details regarding its first quarter 2021 financial results conference call. This call will take place on Thursday, April 29, 2021 at 11:00 a.m. ET.
Glitchy Bank Networks Slow India’s Mobile Payments Revolution
The country has a great system for allowing new apps to connect, but some lenders need to shore up their infrastructure.
Suvashree Ghosh, Anto Antony – Bloomberg
Even before the pandemic, Indian consumers were taking up mobile payment technologies with remarkable speed. There’s just one problem: The networks of India’s biggest banks have struggled to keep pace, crashing again and again.
Chinese Meat Imports Hit Monthly Record on Domestic Supply Fears
China imported a record amount of meat in March on supply concerns as hog herds in the world’s biggest pork consumer struggled to recover from African swine fever. Total imports, including offal, topped 1 million tons, up 44% from February, after new strains of the deadly virus hurt hog numbers, particularly in the north. Shipments have been high for months, with ports unloading a record 10 million tons in 2020, 60% more than a year earlier, to augment local supplies.
Bonds of China’s largest bad debt investor plunge to record low; Concerns grow over assets linked to executed former chair of state-owned group
Thomas Hale – FT
The prices of bonds issued by China’s largest manager of distressed debt tumbled to record lows as global investor fears mounted over its financial health following the execution of its former chair for bribery. Concerns surrounding state-owned Huarong Asset Management, a conglomerate with about Rmb1.7tn ($260bn) of assets and $22bn in outstanding offshore debt, have been growing since it said it would delay the release of its financial results at the start of April.
Vanguard to delist Hong Kong ETFs next month; Move will end the asset manager’s seven-year foray in the market
Selena Li – FT
Vanguard has announced that it will move to delist its Hong Kong-listed exchange traded funds within a month, putting an official end to its seven-year-old locally listed ETF business.
How French companies are also being hit hard by Brexit; Pain from the EU-UK trade deal has not only been felt by British businesses and consumers
Alice Kantor – FT
Jean-Marc Barki, chief executive of French manufacturer Sealock, anticipated Brexit would disrupt his business. But the scale of the problem only hit home when one of his trucks got stuck in the UK for seven weeks. “We went from a system of pure fluidity to a really complex one,” said Barki, whose company relies heavily on the import of a UK made synthetic component to produce its industrial adhesive. He subsequently discovered that the paperwork required to import it to the EU’s single market from Britain was missing some crucial details.
One Big Lesson From Brexit’s First 100 Days
Editorial Board – Bloomberg
What lessons can be drawn from the first 100 days of Brexit? Fewer than one might wish. The chaos of recent months underlines the difficulty, and maybe the pointlessness, of even trying to make forecasts amid such uncertainty. For a start, the pandemic has overwhelmed the short-term results of quitting the EU. All those calculations of the effects on Britain’s growth, trade and employment have been rendered null. Thanks to Covid-19, the British economy has slumped, trade volumes have crashed, and many jobs have disappeared perhaps never to return. Moreover, adjustment to Brexit has barely even begun. Many temporary arrangements are still in place.
UK and EU edge closer to deal on Brexit checks in Northern Ireland
Lisa O’Carroll – The Guardian
The UK is edging towards a new deal with the EU on Brexit arrangements for Northern Ireland with the potential for easing border checks on certain goods. Officials in London and Brussels have been involved in intense “technical talks” in the past two weeks over the future checks on food, plants and parcels going from Great Britain to Northern Ireland. Downing Street’s official spokesman said the discussions had been constructive but that there were “still significant differences that need to be resolved”. The cabinet minister David Frost spoke by phone to the European commission vice-president Maroš Šefcovic on Friday.
To Avoid Brexit Disruption, JD Sports Seeks EU Warehouses
Deirdre Hipwell – Bloomberg
U.K. sportswear chain JD Sports Fashion Plc said Brexit has severely tested its operations and it’s opening new warehouses in the European Union to avoid the hassles of customs checks. A new 65,000 square-foot site near Dublin will become operational later this year and the company said it’s looking for another even larger facility in mainland Europe to avoid duties and disruptions from customs checks. The retailer isn’t the only one looking for space and competition for sites is intensifying, Executive Chairman Peter Cowgill said by telephone. JD Sports is looking in countries including the Netherlands and Germany to meet growing online demand from European consumers.
U.K. Finance Regulators Seek ‘Ambitious’ Access to U.S. Markets
Silla Brush – Bloomberg
Britain’s financial markets watchdog is looking to upgrade its relationship with the U.S. and give U.K. firms permanent access to American securities and derivatives markets in the wake of Brexit. The Financial Conduct Authority is working closely with the Commodity Futures Trading Commission about a “permanent footing” for U.K. trading venues to operate in the U.S., Nausicaa Delfas, the FCA’s executive director of international, said at a conference on Tuesday. “If granted, this recognition will provide U.K. firms with the certainty they need to conduct their business in the U.S. with confidence,” Delfas said at the City & Financial Global virtual event.
Brussels opposes UK bid to join legal pact, splitting EU states
Jim Brunsden and Kate Beioley – FT
Brussels has urged against Britain being allowed to rejoin an international legal co-operation agreement, in a move that has split the bloc’s national governments and dealt a blow to the UK legal sector. The Financial Times reported earlier on Monday that the European Commission was set to give its blessing for Britain’s bid to join the Lugano convention, an accord that determines which countries’ courts have jurisdiction over cross-border civil and commercial disputes. But instead the commission opted to take the opposite course at a closed-door meeting with EU diplomats on Monday, saying it believed that the UK should be left outside on the grounds that post-Brexit Britain is neither a member of the European Economic Area nor the European Free Trade Association.