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Thursday September 24, 2015
Edition 596

Yogi Berra Tribute Edition



Dear <<First Name>>,

The Burgenstock conference is drawing to a close and a hyper successful event it has been too. The renaissance of the SFOA continues apace. Dan Day-Robinson his team, and all those who have assisted and sponsored, including The Realisation Group, deserve enormous plaudits. It was my privilege to have a world class panel discussing crunchy issues for the return of Crossfire.

Meanwhile, in the big wide world, a legend has died. This issue is devoted to the passing of Lawrence Peter “Yogi” Berra. He was not known for his prevarications on market structure directly but in his honour, just as Le Figaro marked the death of ‘Herge’ with a newspaper full of illustrations from the Tintin books, so too I am today offering some words of Yogi-c wisdom in place of my own pith. RIP, a baseball legend and somebody who endorse the richness of language with his wondrous quotations.

Thus how else to describe the magnificence of this year’s Burgenstock meeting which was packed with the movers and shakers, minimising the hangers on? Well, naturally I thought of that wondrous malapropism relating to the perennially full Rigazzi’s, St Louis restaurant where even Yogi struggled to get a table:  “Nobody goes there anymore. It’s too crowded.”

Please for today’s pith “take it with a grin of salt” as Yogi memorably noted. I appreciate some may view today’s special edition as being our endeavouring to hit “from both sides of the plate” but please bear with us as we demonstrate “amphibious” behaviour for one special edition.

If you are packing at the splendid Hotel President Wilson in Geneva today departing Burgenstock, I cannot condone Yogi’s pertinent (but not applicable I am sure!) remark: “The towels were so thick there I could hardly close my suitcase.”

Public Markets

FTIL To Sell 19% In IEX For $62m
The Hindu Business Line

FTIL has amended the share purchase agreement with five buyers to sell additional shares of IEX. The company announced in June that it has entered into share purchase agreement with DCB Power Ventures, Kiran Vyapar, Agri Power and Engineering, Aditya Birla Capital Advisors (as PE fund trustees).

The company has widened the share sale to 5.78 mln, accounting for 19.06%, against 5.03 mln (16.60%). Consequently, the sale value will increase to ₹409.95 crore (USD 62 mln), compared with ₹357.06 crore announced earlier.

FTIL holds a nearly 26% stake in the energy exchange. The deal would value the exchange at around USD 325 mln. After this deal, FTIL will retain 6.94% of IEX.

Read our Premium FTIL Stakes Sales Brief and IEX India Sale.

PLY: One remark with a certain Shahdenfreude, as Yogi noted: “Always go to other people’s funerals, otherwise they won’t come to yours.”

JPX: Notice Of Revision To Earnings Forecast & Dividend Forecast

The consolidated earnings forecast for the fiscal year ending March 31, 2016 released on April 28, 2015 and dividend forecast for the fiscal year ending March 31, 2016 released on July 28, 2015 have been revised.

Operating revenue: previous Yen 100,000 mln (USD 833 mln), revised forecast Yen 108,000 mln (USD 900 mln), up 8%; operating income: previous forecast Yen 48,500 mln (USD 404 mln), revised forecast Yen 56,500 mln (USD 471 mln), up 16.5%; net income: previous forecast Yen 33,200 mln (USD 276 mln), revised forecast Yen 38,700 mln (USD 322 mln), up 16.6%.

PLY: Yogi: “We made too many wrong mistakes.”

Flash-Crash Trader Faces Fight To Stop Extradition To The U.S.
Suzi Ring - Bloomberg

Navinder Singh Sarao is used to fighting other traders on the stock markets. The 36-year-old faces a much tougher battle Friday when his lawyers try to convince a London judge he shouldn’t be extradited to the U.S. to face criminal charges.

Read our Premium The Kennel – Premium discussion of the “Hound of Hounslow".

PLY: Yogi Berra; “It’s like deja vu all over again.”

China Said To Suspect Citic Of Insider Trading During Rescue

A Chinese probe found evidence that Citic Securities engaged in insider trading connected to the government’s rescue of the stock marke.

PLY: Yogi: “I tell the kids, somebody's gotta win, somebody's gotta lose. Just don't fight about it. Just try to get better.”

Citic Scandal Hits LSE's Russell Unit Sale
Jim Armitage - Evening Standard

Read our Premium LSE – Frank Russell Deal Brief.

PLY: Yogi: “Even Napoleon had his Watergate.”

China Prosecutor Vows Speedy Action Against Stock Rout Misdeeds

PLY: Yogi: “I can see how he (Sandy Koufax) won twenty-five games. What I don't understand is how he lost five.”

Client List Reveals HFT Dominance On BrokerTec (subscription)
Robert Mackenzie Smith - Risk
High-Frequency Traders Are Now Dominating Another Huge Market
Portia Crowe - Business Insider just published a confidential list of the top 10 firms ranked by volume traded on BrokerTec (in May/June) which is believed to make up 65% to 70% of interdealer market volumes.

The top three firms alone — Jump Trading, Citadel, and Teza Technologies — accounted for about $US4.2 trillion in volume.

In all, eight of the top ten firms trading on the platform were non-banks, including KCG, Spire-X, XR Trading, DRW and Rigel Cove. Barclays and JPMorgan are the only banks on the list.

PLY: Yogi Berra:  “If the world were perfect, it wouldn’t be.”

The New Bond Market: Regulators Scramble To Keep Up (subscription)
Ryan Tracy & Andrew Ackerman - Wall Street Journal

The technology-fueled world of finance has grown faster, more sophisticated and incredibly complex. Meanwhile, the $12.8 trillion U.S. Treasury market is still governed by rules adopted during the age of paper filings and telephone trading.

Yogi: “You can observe a lot by watching.”

The New Bond Market: Algorithms Trump Humans (subscription)
Katy Burne - Wall Street Journal

HFT accounts for increasingly large portion of volumes.

PLY: Yogi: “The future ain’t what it used to be.”

SGX Grilled By Concerned Shareholders At AGM
Wong Wei Han - Straits Times

Investors grilled SGX bosses on a range of issues amid some concerns over the bourse's business performance.

Yogi: “Slump I ain’t in no slump...I just ain’t hitting.”

Wall Street Said To Win Lucrative Concession In Derivatives Rule
Jesse Hamilton & Silla Brush - Bloomberg

Wall Street is close to cutting billions of dollars from the cost of a derivatives rule as a debate among regulators over how tough the provision should be shifts in banks’ favor.

PLY: Yogi: “If the people don’t want to come out to the ballpark, nobody’s going to stop them.”

EU - US Financial Markets Regulatory Dialogue Joint Statement

PLY: As Yogi warned: “If you don’t know where you are going, you might wind up someplace else.”

EU Favours Insurers, Private Equity In Capital Markets Plan
Huw Jones - Reuters

The trillions of euros held by insurers will be a core target for the EU's CMU plan to invest more in companies and infrastructure. Jonathan Hill is due to publish his "action plan" on Sept. 30 for putting in place the basics of a CMU by 2019.

Read our Premium EU CMU Brief.

PLY: Yogi: “I always thought that record would stand until it was broken.”

Europe Braces For Crunch Vote On Mifid II (subscription)
Financial News

Top regulator's board of supervisors set to vote on massive package of rules for European trading on Thursday.

PLY: As Yogi noted: “You don't have to swing hard to hit a home run. If you got the timing, it'll go.”

Athens Exchange -Expansion Of Common Platform: Upgrade Of CSE Markets Clearing

Private Markets

Renuka Sugars To Fully Exit NCDEX
Business Standard

Shree Renuka Sugars (SRSL) plans to fully exit from NCDEX, selling its remaining 5% stake as part of a strategy to sell all its non-core assets.

SRSL had entered the exchange in 2009, with a 5% stake buy from Goldman Sachs Asset Management India for $7.5 million. It had increased this to 12.5%, by acquiring additional stake from rating agency CRISIL in 2010. Then, it had divested 7.5% stake in May 2014 for Rs 66.54 crore ($11 mn) to comply with regulatory changes directed by FMC.

Yogi: “I can see how he (Sandy Koufax) won twenty-five games. What I don't understand is how he lost five.”

‘Good Guys’ Of US Stock Trading Put To Test (subscription)
Philip Stafford & Nicole Bullock - Financial Times

IEX Group is preparing to become a fully-fledged stock exchange.

PLY: As Yogi noted about the 1973 Mets: “We were overwhelming underdogs.”

PXIL To Set Up Intra-State Power Exchange In Maharashtra
Sanjay Jog  - Business Standard

Power Exchange India Ltd (PXIL), which has been operating as a national level power exchange since 2008, proposes to set up an intra-state power exchange in Maharashtra.

PXIL, promoted by the NSE and NCDEX, has approached the Maharashtra Electricity Regulatory (MERC) for permission to commence and operate the intra-state power market based on CERC norms.

PLY: Yogi once remarked: “If you can’t imitate him, don’t copy him.”

FMC: UCX CEO Not Fit & Proper To Run Bourse
Financial Express

Universal Commodity Exchange’s (UCX’s) MD & CEO Praveen Pillai is not a “fit and proper person” to run the bourse due to professional misconduct and financial irregularities, according to a FMC order. The stakeholders of (UCX) — which has been defunct for over a year — include state-owned IDBI, REC and NABARD.

PLY: Yogi’s endearing remark on denial: “I never blame myself when I’m not hitting. I just blame the bat and if it keeps up, I change bats. After all, if I know it isn’t my fault that I’m not hitting, how can I get mad at myself?”

Special Section: FTI, NSEL, India at the Crossroads

PLY: MCX up nearly 2%,63 Moons (FTIL) up 1%.

Yogi: “Never answer an anonymous letter.” Or perhaps “If they don’t want to come you can’t stop them”


New, Enhanced Tokyo SE Arrowhead Cash Equity Trading System - For A Safer, More Convenient Market

PLY: As Yogi remarked: I want to thank you for making this day necessary.”

SGX Plans New Post-Trade System For Clearing, Delivery Of Shares
Linette Lim - Channel NewsAsia

SGX plans to implement a new generation post-trade system that will facilitate the clearing and settlement of trades as well as the delivery of shares, CEO Loh Boon Chye said on Wednesday.

PLY: As Yogi noted: “I wish I had an answer to that because I'm tired of answering that question.”


Banks, Asset Managers Await BoE Findings On Market Liquidity
Huw Jones - Reuters

Banks and asset managers will tune into the BoE on Friday to see if a report on bond market liquidity will vindicate calls to relax rules laid down after the financial crisis.

PLY: As Yogi remarked: “We have deep depth.”

EU Traders & Energy Groups Braced For Mifid II Guidance (subscription)
Neil Hume - Financial Times

Traders and energy companies operating in Europe are bracing themselves for the release of guidance that could determine whether position limits are imposed on commodity derivatives and they are forced to hold the same level of capital as banks.

After months of consultation Esma is set to agree on its final advice to the European Commission on a recast version of the region’s flagship markets legislation.

PLY: Yogi noted: ““When you come to a fork in the road, take it.”

Bloomberg & Ghana Fixed Income Market (GFIM) Launch Trading System

Bloomberg and Ghana Fixed Income Market (GFIM) launched the Bloomberg E-Bond trading and market surveillance system, for Ghanaian government bonds.

PLY: Yogi’s attitude to surveillance: “I think Little League is wonderful. It keeps the kids out of the house.”


“I think Little League is wonderful. It keeps the parents off the streets.”


Tokyo Stock Exchange To Begin Calculating & Publishing Currency Hedged Indices With Daily Hedging (US Dollar And GBP)

PLY: As Yogi himself hedged: “A nickel ain’t worth a dime any more.”

Career Paths

BATS hired Kal Chan as Director, Market Data Sales, and Robert J. Marrocco a Director of Listings.

Most recently, Mr. Chan was responsible for sales and account management at Interactive Data 7ticks while Mr. Marrocco joined BATS from NYSE where he was Associate on the Global Index and ETP team.

DTCC confirmed significant expansion of its workforce across the firm’s primary European locations in London and Wrexham as the company continues to increase its support for financial market participants.

In addition to providing a diverse range of services and participating in a number of industry joint ventures, including Clarient Global, Soltra and DTCC-Euroclear GlobalCollateral, DTCC is on target to employ 700 people in the UK by the end of this year - an increase of 40% on 2014, which is the result of a sustained hiring programme in the North Wales area over the past 18 months.

DTCC appointed Mark Wetjen as MD, as reported yesterday.

Financial Calendar

25.09 – Nasdaq $0.25 quarterly dividend payment

New announcement

SGX Q1 Results FY2016 – 21 October 2015

All forthcoming exchange / investment related events are now listed in our Events page.

Share Notes

Interactive Brokers CFO Paul Jonathan Brody sold 649 shares on Sep 18, 2015 at $39.01 (bargain $25,321.68).

Crowdfunding Unveils Crowdfunded Art Investment Opportunities

PLY: Yogi: “Why buy good luggage, you only use it when you travel.”

Other stories

SEC Approves Renewal Of Advisory Committee On Small And Emerging Companies

Opening Remarks Before The SEC Advisory Committee On Small & Emerging Companies By SEC Chair Mary Jo White
Opening Statement To The September 2015 Meeting Of The SEC Advisory Committee On Small & Emerging Companies By SEC Commissioner Daniel M. Gallagher

PLY: Yogi was, I feel pitch perfect in understanding regulatory risk: “In theory there is no difference between theory and practice. In practice there is.”

PLY: In closing, I echo the words of the great baseball philosopher Yogi Berra: “I never said most of the things I said.”

But the last word goes to the story where when asked by his wife where he wanted to be buried, in St. Louis, New York or Montclair. "I don't know," he said. "Why don't you surprise me?"

Normal service will resume tomorrow but without Yogi, the world won’t be quite the same, even in market structure.


If you require any more insights into the above stories or trends in market infrastructure, please do not hesitate to contact us.

Best wishes,

Patrick L Young - Executive Director DV Advisors

Florin Oprea - Associate DV Advisors


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