Exchanges/Platforms

Bank of Japan gives lesson in perils of ETF buying

25 Mar 2020

Unrealised losses on its exchange-traded fund holdings could be as high as $27 bln. Governor Haruhiko Kuroda has reserves that would likely cover that. And in a real pinch, governments can recapitalise central banks. But that may call into question rate-setters’ independence.

Short-selling bans are no cure for virus rout

13 Mar 2020

A pandemic-induced market crash prompted Spain and Italy to curb trading on some hard-hit local stocks. The measure, also used to protect bank shares in the 2008 crisis, looks rushed and won’t help much. Real panic selling rather than speculation is what’s roiling markets.

Robinhood’s trading arrows turn into friendly fire

3 Mar 2020

Rivals like Schwab matched the startup’s chief appeal, and $7.6 bln valuation, by ditching fees. Now outages during frenetic markets are landing more blows. Valuable service can overcome glitches, as Twitter and Slack show. But Robinhood’s 10 mln customers have plenty of options.

NMC mess implies London needs fiercer watchdogs

27 Feb 2020

The Gulf hospital operator fired its CEO after revealing undisclosed debts. Its poor governance and disclosure sit awkwardly with the UK’s aim to be the world’s top venue for foreign companies and capital. Keeping that reputation requires tougher penalties for bad behaviour.

Morgan Stanley-E*Trade deal puts D.C. on the spot

20 Feb 2020

It’s the first major acquisition by a big bank in over a decade, which virtually guarantees political scrutiny. Yet regulators like the Fed seem amenable to financial mergers. Political detractors can’t easily sabotage the $13 bln deal, but they could upset the delicate timing.

E*Trade embodies Wall Street’s stodgy middle age

20 Feb 2020

Serving armchair investors is as unracy as it gets for erstwhile masters of the universe. Yet Morgan Stanley’s $13 bln purchase of an online broker makes sense given the rise of passive funds and decline of securities trading. Wall Street’s future is boring, and profitably so.

Morgan Stanley beats Goldman to E*Trade punch

20 Feb 2020

Buying the online broker for $13 bln gives James Gorman’s Wall Street firm stable income, higher returns and cheap retail deposits. David Solomon has promised that too at Goldman Sachs, albeit via other means. It leaves Solomon, still tackling regulatory issues, on the back foot.

Hong Kong homecoming bets are only half a whim

24 Jan 2020

Trip and Baidu are mulling secondary listings in the Asian hub, following in the footsteps of Alibaba. Early evidence suggests that could boost valuations. For now, it’s more convincingly a hedge against any politically-driven crackdown on Chinese companies listed in New York.

Thailand’s capital markets are anything but sick

10 Jan 2020

Central Retail is raising up to $2.7 bln in a record IPO, putting the country on course to be top for new issues in Southeast Asia for a fourth year. As Thai Inc looks abroad for growth, helped by a strong currency, it’s a reminder that the market’s relative maturity has upsides.

Hong Kong bourse boss trusts in awkward necessity

10 Jan 2020

Charles Li has seen HKEX earnings plunge on political unrest as Beijing mulls alternative venues. Yet Li is confident China’s market inefficiencies will leave it dependent on Hong Kong’s financial plumbing in the end. The exchange’s reviving share price suggests investors agree.

Politics cripples shaky China-UK stock link

2 Jan 2020

Irritated by British attitudes towards Hong Kong, Beijing has suspended the scheme that connects equity markets in London and Shanghai. Already struggling, the initiative will be hard to revive. The UK loses potential new business, while China ends up more dependent on New York.

China will get sideswiped by American ESG fervour

24 Dec 2019

There’s talk of delisting People’s Republic stocks from U.S. bourses and a proposal to block public pension funds from buying them. Concerns about human rights, audits and price swings are also being amplified. That feeds into the social-impact hype and will spark capital flight.

Climate-bond cold shoulder gets harder to justify

10 Dec 2019

Even though green bonds perform well and can weather economic cycles better than regular issues, they’re still constrained by limited demand. Poor transparency and a comparability have been a turnoff, but a new Nasdaq tool means even that argument no longer holds much water.

Euronext’s Spanish journey looks tortuous

22 Nov 2019

Stephane Boujnah, the exchange’s acquisitive boss, may try to trump Swiss rival SIX’s 2.8 bln euro bid for Madrid-based peer BME. A higher offer may clinch the deal, but would test Euronext’s financial discipline. Appeasing local politicians would also come at a cost.

Schwab-TD merger too appealing for its own good

21 Nov 2019

An $80 bln union of the two U.S. brokerages is an idea that has been tossed around for over a decade, and justifiably. Competitive pressures are intense, the industry fragmented, and the potential savings prodigious. That, though, gives TD Ameritrade room to set a high price.

Swiss bourse buys costly ticket to EU trading room

18 Nov 2019

Zurich-based exchange operator SIX is offering 2.8 bln euros cash for Spain’s BME, which is also being courted by rival Euronext. Building up scale makes sense. But extracting savings to justify the 34% premium may be challenging. It’s an expensive way to gain an EU foothold.

UK listing rules bonfire gives more pain than gain

6 Nov 2019

The government may let companies going public give founders extra voting rights in a bid to draw tech firms to London. Dual class shares, which may be temporary, won’t trigger a rush of IPOs. Yet weakening shareholder rights could hurt the City’s status as a financial hub.

Hong Kong seeks new traffic cop for wonky market

15 Oct 2019

Ashley Alder made the best of a middling job as chief securities regulator. He made progress fighting shoddy IPOs, though failed to stop dual-voting share structures. His successor could tackle the SFC’s slow enforcement, but will still be stuck between powerful vested interests.

Stars gradually align for new Shanghai tech bourse

10 Oct 2019

MSCI says stocks on China’s nascent STAR Market could be eligible for index inclusion. That, and other factors, should lift trading volumes, which have dipped. Best of all, looser listing rules tested on the board will be rolled out to the rest of the equity market.

LSE has done Hong Kong’s bourse a favour

8 Oct 2019

Charles Li, unable to charm the UK exchange into talks, has dropped his bid. It’s a blessing in disguise. Adding cash to sweeten a rejected 30 bln pound offer would stretch finances, and the political backdrop has worsened after a weekend of violence in the Chinese-run territory.