Exchanges/Platforms

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.

Citi, UBS well suited to roast Nasdaq on Facebook

23 Aug 2012

The two banks are urging the SEC to reject the U.S. exchange’s minimal $62 mln compensation offer relating to its botching of the social network’s IPO. UBS lost a bundle and may look a bit conflicted. But both companies know all about screw-ups and how to pacify critics.

US derivatives leader makes timely push on Europe

20 Aug 2012

CME plans a London derivatives exchange. By starting in currencies it avoids tackling rivals NYSE and Deutsche Boerse head-on. The timing is also canny. Private trading is migrating to bourses and moving earlier might have made it easier for NYSE-DB’s merger to win approval.

Knight makes most of an abysmal situation

6 Aug 2012

The $400 mln rescue underscores the painful cost of its trading debacle and dilutes existing investors. But the saviors CEO Tom Joyce assembled include a good mix of rivals and clients. That should give him scope to rebuild Knight without having to bow to a rapacious cabal.

Knight shows that next creative loss is never far

2 Aug 2012

The market-maker’s unlikely $440 mln hit may put its future in doubt. The software error behind it, fresh on the heels of UBS’ head-scratching Facebook blunder, proves investors can never be too imaginative about the potential to lose money. Risk just can’t be regulated away.

Market flap shows danger of throwing glitch stones

1 Aug 2012

Knight Capital’s trading hiccup caused halts in several stocks. The firm, whose shares dropped over 20 pct, is separately demanding recompense from Nasdaq over the Facebook IPO debacle in May. Companies reliant on tech perfection should join hands before they point fingers.

India’s No. 3 stock market faces 3 big challenges

11 Jul 2012

MCX has been green-lighted to take on the Bombay and National Stock exchanges in trading. The young contender must attract new investors, create ample liquidity and, finally, repair its image, which has been badly bruised by a protracted battle with regulators for its existence.

HKEx’s offer for the LME stretches the numbers

20 Jun 2012

The Hong Kong bourse may pay 1.4 bln pounds for the London metals trader. HKEx hopes its investment will yield 10 pct-plus by 2017. A Breakingviews calculator shows Chinese LME trading volume would have to grow over 40 pct a year and become half the business. That’s a tall order.