Warehousing rules put LME’s new owner on the spot 16 Sep 2013 Hong Kong’s securities exchange paid a fortune for the metals marketplace last year. It’s been a bumpy start with plans to reform price-distorting warehouse rules proving divisive. Yet China-fuelled expansion will fail if market participants lose faith in LME prices.
Dow Jones average overweights Masters of Universe 10 Sep 2013 New members Goldman Sachs and Visa alone represent 15 percent, and all constituent financial firms almost a quarter, of the stock-weighted U.S benchmark. That’s beyond their share of both GDP and profit. Absent a rapid rise in banking fortunes, the gurus have botched this one.
Nasdaq fail should be final nail for Bob Greifeld 22 Aug 2013 A three-hour trading halt comes barely a year after Facebook’s flubbed IPO. The CEO’s 10-year term is no disaster: he diversified the business, controlled costs and the stock bested the NYSE’s. But two botched big deals and techno tumbles should call time on Greifeld’s tenure.
Edward Hadas: In favour of much less trading 1 May 2013 When the Chicago options exchange closed for three hours, traders were unnerved. No one else was, and a rationing of liquidity may bring economic benefits. Perhaps it is time to extend traders’ millisecond-long holidays and revert to once-daily price fixings for all markets.
Nasdaq paying price of dealmaking gone wrong 2 Apr 2013 Nearly two years after it failed to supersize by acquiring the NYSE, the bourse is aiming smaller with a $750 mln plan to buy eSpeed. Investors erased 90 pct of the price tag from Nasdaq’s market value. That ignores the target’s income and the buyer’s cost discipline.
U.S. Congress revs up to squash its own swap rules 25 Mar 2013 A bill that claims to flatten the playing field for U.S. and foreign derivatives traders drew unanimous support in its first test. But it would create a giant loophole in the Dodd-Frank reforms and make regulators’ jobs harder. That’s no way to reduce systemic risk.
Bitcoins need more than fear and love to thrive 25 Mar 2013 The value of the digital currency beloved by inflationistas and libertarians has shot up more than 60 pct in a week thanks to the Cyprus-infused panic over deposit insurance. But it currently has too many drawbacks: utility, not emotion, will determine whether Bitcoins catch on.
Intrade sheds light on gray markets going dark 11 Mar 2013 The site, which took bets on everything from elections to oil, closed abruptly and mysteriously. Intrade’s predictive record was good, but didn’t foresee the rising controversy over under-regulated speculation. It’s a cautionary tale for the likes of SecondMarket and StarStreet.
New high for Dow sends cryptic market message 6 Mar 2013 One thing is clear: investors have pushed a not very representative U.S. stock benchmark above its previous peak. But the meaning of this is obscure. Markets have done well or badly, shares may be cheap or expensive, and people managing money may be optimistic or glum.
CME-DB deal is both justifiable and unlikely 26 Feb 2013 The U.S. exchange reportedly made merger overtures to its German rival. Creating a $32 bln powerhouse would mean real savings, and antitrust problems could be solved. But resistance elsewhere could be stiff. And Deutsche Boerse has no pressing reason to give up its independence.
Bourse listing won’t make Moscow a new Wall St 15 Feb 2013 The damp squib IPO of the Russian stock exchange isn’t the opening bang heralding an era in which Moscow becomes a new global financial centre. The lack of a domestic investor base, and the local business climate, are problems that must be tackled first.
Nasdaq both good and too good as LBO target 12 Feb 2013 Talks with Carlyle ended over valuation differences. A sum of the parts shows the U.S. bourse worth at least $7.5 bln, 50 pct more than its public market value. That lends itself to an LBO. But Nasdaq is already efficiently run, making it hard for buyout shops to find much juice.
Markets’ new-year euphoria looks overdone 28 Jan 2013 The S&P 500 is up 5 pct, earnings look good, investors are shoveling record sums into equities and Treasuries are flirting with 2 pct yields. But fiscal cliff woes remain and at least one incentive to put money to work may wear off. It’s OK to feel better, just not to excess.
NYSE’s Niederauer takes ICE-cold shower 20 Dec 2012 The Big Board’s agreed $8.2 bln sale to ICE stacks up financially and strategically. But NYSE is fetching a quarter less than its new owner offered in a joint bid with Nasdaq last year. With its shares lagging the exchange sector since then, capitulation was the CEO’s best option.
What if regulation makes finance more efficient? 13 Dec 2012 Though technology and innovation have squeezed trading costs, the industry’s profits are accounting for a bigger share of U.S. GDP, a former Goldman banker says, needlessly diverting some $635 bln from the broader economy. It lends credence to ideas like a transaction tax.
HK exchange plays it safe with equity finance 30 Nov 2012 The Hong Kong bourse’s $1 bln share placing allows it to repay more than half the debt used to buy the London Metal Exchange. Ultra-low yields make bonds look tempting. But a recent share rebound - and HKEx’s hefty dividend payout - justifies its cautious approach to leverage.
Colombian stock market dominance up for grabs 5 Nov 2012 The government’s seizure of Bogota’s top broker leaves Latin America’s hottest securities market without a clear leader. But Interbolsa’s failure may highlight Colombia’s financial and regulatory charms, and make way for new players with ambitions of regional dominance.
Review: The danger of trading machines 19 Oct 2012 It’s a quarter-century since computerized program trading led to Black Monday on global stock markets. Scott Patterson’s “Dark Pools” is a good introduction to the latest machine-based trading technique. Arcane algorithms have reduced real liquidity and expanded rent-seeking.
LSE shock over capital rules hurts Rolet 28 Sep 2012 Boss Xavier Rolet is wisely diversifying the exchange group. But new European rules make an already pricy bid for LCH.Clearnet even harder. With watchdogs everywhere fretting about systemic risk, he might have guessed regulators wouldn’t let clearing houses stint on capital.
Facebook crystallizes blundered IPO with buyback 5 Sep 2012 Mark Zuckerberg’s social network will essentially cut its outstanding share count by 101 mln by promising to use cash, rather than stock, to settle a tax obligation. Buying back stock four months after an IPO at half price looks cynical. In this case it’s just incompetence.