Bitcoin futures set scene for more gambling 11 Dec 2017 The 20 pct surge on new CBOE cash-settled contracts is sedate by crypto-currency standards. There’s still cause for concern. Rather than being a useful hedge, futures make it easier to trade bitcoin without actually owning it. For now they have little utility beyond speculation.
LSE boardroom ceasefire is least bad outcome 29 Nov 2017 CEO Xavier Rolet is leaving the London Stock Exchange immediately, ending an activist campaign for him to stay on. Chairman Donald Brydon will step down in 2019. The compromise averts a longer and more damaging public row. But nobody emerges from the saga with much credit.
Fred Goodwin’s ghost haunts LSE board fight 28 Nov 2017 In 2007 the forceful RBS boss led his bank into a disastrous deal, encouraged by Chris Hohn. The activist investor is now backing London bourse CEO Xavier Rolet against the company’s directors. Hohn’s call for Bank of England support has backfired. Goodwin may help explain why.
BlackRock ETF bot makes turkeys of human managers 27 Nov 2017 Larry Fink’s $6 trln asset manager is turning to computers to run a new batch of exchange-traded funds tracking shifting industry sectors. Machine learning and big data should do it well and at low cost. It adds more worries for flesh-and-blood stock pickers.
LSE boardroom brawl will produce only losers 20 Nov 2017 Activist TCI wants to oust bourse Chairman Donald Brydon and reverse the departure of CEO Xavier Rolet. The board is preparing a public explanation for Rolet’s exit, perhaps including salty details. Directors, executives, shareholders and the exchange itself will all look bad.
UK economy will share Theresa May’s pain 13 Nov 2017 The Prime Minister is facing growing challenges to her leadership from the ruling party’s pro- and anti-EU factions. Political disarray increases the risks that leaving the European Union will do serious economic harm. A softer Brexit is growing harder to deliver.
TCI turns “inactivist” investor with LSE campaign 6 Nov 2017 The hedge fund usually demands that CEOs quit. This time it’s pushing for London Stock Exchange boss Xavier Rolet to stay in his job while criticising the chairman. The LSE board owes shareholders an explanation. The risk of a board spat, though, is that both men end up leaving.
CEO exit worsens Deutsche Boerse’s bind 26 Oct 2017 Carsten Kengeter is stepping down after failing to resolve an insider-trading probe. An aborted plan to merge with the London Stock Exchange also eroded support at home. But his departure leaves the German group ill-prepared to benefit from any Brexit-related opportunities.
Crypto-currencies’ strength becomes their weakness 29 Sep 2017 Freedom from regulation was the big draw of bitcoin, ether and the like. But exchanges established to trade them often lack basic controls on identity, fraud, tech and even volume. Without fixes, digital currencies will stay on the financial fringe, prone to crime and bubbles.
Nasdaq signals information is the real market 5 Sep 2017 The tech-heavy exchange is paying $705 mln for eVestment, a data provider to asset owners and managers. It’s pricey at over 16 times adjusted EBITDA. But CEO Adena Friedman sees more value in information that brings buyers and sellers together than in acting as a trade conduit.
Hong Kong’s fresh Aramco pitch is flawed 5 Sep 2017 Stock exchange boss Charles Li is pushing a "Primary Connect" scheme allowing Chinese punters to buy into listings in the city. The aim is to lure the bumper Saudi IPO with the prospect of a flood of retail money. But mainland investors have a better playground at home.
Vanguard slowly flexes corporate-governance muscle 1 Sep 2017 Index funds can’t choose to sell stocks. But the $4.5 trln fund giant is engaging more with companies and in the past year voted against management at Exxon Mobil, Viacom and Wells Fargo on climate change, pay and the like. It’s hardly activism but it beats pure passive investing.
Blank M&A checks are getting too easy to write 22 Aug 2017 The NYSE relaxed voting rights and other rules to clear the way for shell companies like recent ones from TPG to list. Rival Nasdaq had been capitalizing on the resurgence of such acquisition vehicles. An otherwise weak IPO market is chipping away at investor protections.
Trading floors send hopeful signs on disruption 21 Aug 2017 Hong Kong’s bourse is closing its trading floor, the latest big exchange to do so. Globally, brokers in bright jackets have had a good run, given how little sense “open outcry” trading makes today. Nostalgia can protect some jobs from automation for a surprisingly long time.
China takes misplaced pride in stock meddling 17 Aug 2017 China's securities regulator credits a crackdown on financial risk for rallying indexes, cutting volatility and rationalising prices. Thus, curbs on derivatives in place since 2015 have been lifted. Officials have learned worryingly little about moral hazard since the last crash.
Speed bump warranted in China-Chicago bourse trade 13 Jul 2017 Some U.S. lawmakers want the SEC to block the sale of the Midwest exchange to Chinese investors. Their concerns are largely fear mongering. But as self-regulators, all such venues will soon get access to customer data as part of a new audit trail. That justifies closer review.
MSCI gives investors a shot of China’s old economy 21 Jun 2017 The U.S. index provider took the historic step of adding some mainland-listed shares to its global benchmarks. The new entrants include a raft of banks, manufacturers, and raw-materials firms. This will expose foreign investors to sectors challenged by high debt and low growth.
China index inclusion more form than substance 20 Jun 2017 After deciding against it for three years, MSCI will finally add 222 mainland-listed shares to its global benchmarks. This will be a relief for Beijing, which got egg on its face at prior reviews. But the move is largely symbolic and will generate only modest inflows to China.
EU clearing row shows limits of UK taking control 13 Jun 2017 The European Union won’t force trading in euro-denominated derivatives to leave London. But it will require UK-based clearing houses to follow EU regulations, or lose out. It’s proof that post-Brexit Britain will have to play by European rules – but lose any say in setting them.
China puts currency market forces on notice 26 May 2017 It may tweak the way the yuan is priced each day, effectively giving policymakers more control over its value. In reality, the daily price-fixing is only a small part of how China manages its currency. It’s another step back from reform and suggests mounting economic worries.