Exchanges/Platforms

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.

HK exchange makes risky $2.2 bln LME bet

15 Jun 2012

The exchange is paying an alarming 58 times last year’s earnings for the London Metals Exchange - even factoring in its new fee structure. There are no cost synergies, so all depends on whether mainland Chinese buyers will be allowed to play more on foreign commodity markets.

Nasdaq pours gasoline on Facebook fire

7 Jun 2012

The exchange offered brokers a measly and controversial $40 mln to compensate them for over $120 mln of losses derived from the badly botched IPO of the social network. That has galvanized customers and rivals against Nasdaq. Boss Bob Greifeld is starting to look more exposed.

Gavilon sale brings Ospraie happier crisis memory

29 May 2012

The commodities hedge fund has doubled its money with the $3.6 bln sale of the grain trader it bought from ConAgra in 2008. Co-investors including George Soros should also be pleased. And for Ospraie, which was nearly crushed as the crisis unfolded, it’s a cheerier bookend.

Nasdaq howler can’t explain Facebook flop for long

21 May 2012

The exchange is still clearing up after a systems snafu left the social network’s stock trading in the dark after its Friday IPO. Nasdaq’s blunder dinged confidence and the bourse may be on the hook financially. But Facebook’s valuation must soon stand, or fall, on its own.

New-look LSE enhanced by LCH grab

9 Mar 2012

The bourse operator’s push into stronger businesses like “post-trade” services continues with the takeover of clearer LCH.Clearnet. Taking no more than 60 pct keeps customers onside. The complex deal also looks financially respectable. Hence a bounce in LSE stock.

Happy stock highs belie bonds teetering on edge

21 Feb 2012

With the Dow Jones industrial average crossing the 13,000 level for the first time since before the crisis and Britain’s FTSE 100 index headed toward 6,000, equity investors are smiling. Many may be wondering if the run can be sustained. But debt buyers may face the real danger.

NYSE/DB execs deserve spanking for merger failure

1 Feb 2012

Duncan Niederauer and Reto Francioni spent a year pursuing a transatlantic tie-up that the EU never favored. While not as egregious as AT&T’s bid for T-Mobile USA, their ambitions have proven a costly distraction. At the very least, the two should forfeit their bonuses.

LSE-SGX move on metals exchange would make sense

30 Sep 2011

Joint bids tend to be hard. But the London and Singapore bourses may benefit by partnering in a possible $1.6 bln bid for London’s metals exchange. LSE gets a partner that already handles metals futures; SGX gets local know-how. That matters in a potentially hot auction.