Breaking News

John Lothian Newsletter: Financial PR spins a new global story; Markit acquires interest in commodities price reporting agency PRIMA; Innovation chief Bradley departs Eurex

First Read

The Economy Is Rigged, and Other Presidential Campaign Myths
By N. GREGORY MANKIW – NY Times
If you want to learn about the economy, there are good and bad places to go. Probably the worst source of reliable information is the current crop of presidential candidates. Dissembling and exaggeration are no strangers to politics, but this year’s campaigns have been particularly egregious.
goo.gl/4pwDNM

***** There used to be lies, damn lies and statistics. Now there are just damn lies.

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CHX Confirms SNAP Auction Starting Date
Business Wire
The Chicago Stock Exchange (CHX) confirmed that May 13 is the date it will introduce SNAP Auctions – the only offering of its kind by any US securities exchange. SNAP Auctions will be conducted during the regular trading session based on either a customer auction request or as a result of accumulating sufficient interest based on aggregated SNAP Auction Only orders.
jlne.ws/1Oh1PPZ

***** CHX is not spooked by a Friday the 13th launch date.

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How Twitter is changing business journalism
BY RANDY SHORT · Talking Biz News
Special days labeled with acronyms. Talk of waffle breakfasts together. Constantly conversing through hash tags, quips and gifs. No, this isn’t your local group of sorority girls, but rather a community of journalists working at some of the most prestigious news organizations in the world and traders managing millions — if not billions — of dollars.
goo.gl/mMa3v8

***** Interesting article quoting some of the top financial journalism tweeters.

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Cheddar, the ‘CNBC for Millennials,’ Goes Behind a Paywall; Streaming video site from former BuzzFeed executive Jon Steinberg will start charging $6.99 a month
By SHALINI RAMACHANDRAN – WSJ
Former BuzzFeed executive Jon Steinberg’s effort to create a Web-based “CNBC for millennials” is going behind a paywall.
goo.gl/XrQjO5

****** Darn, we were going to call our streaming business video Gouda News.

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Twitter Bars Intelligence Agencies From Using Analytics Service; Social media firm cuts access to Dataminr, a service used to identify unfolding terror attacks, political unrest
By CHRISTOPHER S. STEWART and MARK MAREMONT – WSJ
Twitter Inc. cut off U.S. intelligence agencies from access to a service that sifts through the entire output of its social-media postings, the latest example of tension between Silicon Valley and the federal government over terrorism and privacy.
goo.gl/H5dEcX

****** If the spies can’t hack into the service, then maybe we need new spies.

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Steve Wynn lashes out on ‘unconscionable manipulation’ in the stock market
Nicole Sinclair – Yahoo Finance
On Wynn Resorts’ (WYNN) first quarter conference call, Chairman and CEO Steve Wynn was asked about the company’s recent announcement to increase its share repurchase to $1 billion. Wynn responded back with a full-on critique of the stock market, which he says resembles casino activity.
/goo.gl/ZNnrEh

***** Steve Wynn knows casinos. I will say the drinks are stronger on Wall Street than at his casinos.

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Nasdaq’s President and COO: ‘We’re Really a FinTech Company’
By Brian Sozz – The Street
Adena Friedman has seen — and done — it all in the course of nearly 20 years working at Nasdaq Inc (NDAQ – Get Report) , the last three as President and Chief Operating Officer.
goo.gl/msvdmS

***** I can just see ICE saying, “We were a fintech company before there were fintech companies.”

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Yahoo finance chief begins witch hunt to cut costs
By James Covert – NY Post
Yahoo’s media unit laid off dozens of employees this spring — but some still aren’t getting the memo about controlling costs.
goo.gl/EKvG0d

***** There goes the ping pong table.

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CCOs at Brokers Require Probing Data Science
Tayloe Draughon – Neurensic, Inc. – Finextra
My first direct contact with compliance was confrontational. The team had just developed our first internet trading screens and we were excited to deploy them at some beta futures brokers. It was going to be the first time a retail person could actually trade the CME markets.
****** I think I was involved in this somehow. I used a screen Tayloe helped produce with the first Java-based system. It was a rogue project at the CME. One day the trading system went down because someone at the Globex control center did not know what the box it ran on did, so they unplugged it. The computer was a repurposed 386 desktop I believe.

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Brooklyn subway fix could derail real estate boom in New York hipster capital; Line that transports more than 400,000 commuters daily to Manhattan could be shut down for three years under proposed plan
Jamiles Lartey in New York – The Guardian
Brooklyn residents are braced for chaotic commutes and a potential reversal of the booming real estate market that has characterized many of its neighborhoods in recent years if a proposal to shutter one of its main links to Manhattan for repairs goes ahead.
goo.gl/ucwQWP

***** I hope the hipsters know how to ride bikes.

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CTAs and Commodity Indices: A Fresh Perspective
PRMIA Chicago and CAIA
Thursday, May 19, 2016, 11:45 a.m. – 1:00 p.m.
Douglas Ashburn, COO and Editor-at-Large, John J. Lothian & Company, Inc.
Topic: Is 2016 a “Make-or-Break” Year for Managed Futures?
During the financial crisis, managed futures enjoyed solid returns while equity markets plunged. As equity markets turn bearish in 2016, will manage futures have another run of out-performance, and if not, what will the future hold for this asset class?
goo.gl/TYIbVh

***DA: My presentation is really the appetizer course. Following me will be commodity researcher Hilary Till, who will present her latest research on the drivers of returns for CTAs and commodity funds. But act now. Last time I checked there were only a few spots left.

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Friday’s Click Derby – Win, Place and Show
Sitting atop the leaderboard in Friday’s newsletter was the NPR story on the possible identity of “Satoshi Nakamoto,” ‘I’m Sorry,’ Says Man Who Claimed To Be Bitcoin’s Creator. In second place by a nose was the FT’s OTC derivatives shrink to lowest level since financial crisis. Third place went to Eurex, and its Face-to-face chat with Matt Scharpf. If you have those names on your card, step to the window. Winner, winner, chicken dinner.

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Lead Stories

Financial PR spins a new global story; Clients place fresh demands on an industry reshaped by consolidation and technology
By Shannon Bond and James Fontanella-Khan in New York and Arash Massoudi in London – FT
In 1992, George Sard left Ogilvy Adams & Rinehart, the public relations company where he cut his teeth, to start his own firm advising some of Wall Street’s most powerful dealmakers. He and colleague Paul Verbinnen took two big accounts with them: Morgan Stanley and Ted Forstmann, the leveraged buyout billionaire credited with coining the phrase “barbarians at the gate”.
/goo.gl/5AdCF4

Innovation chief Bradley departs Eurex
Futures & Options World
Eurex’s chief innovation officer and executive board member Brendan Bradley has left the firm in the latest personnel change at the German exchange. A well-known character in the derivatives market, Bradley left the Deutsche Boerse-owned company on Friday last week after nearly 10 years with the firm.
jlne.ws/1VQlMVR

What Is ‘Maker-Taker’? And How Could A New SEC Test Program Change Your Trading?
Wayne Duggan , Benzinga Staff Writer
On Friday morning’s PreMarket Prep, KOR Group President Dave Lauer and founder/CEO Christopher Nagy discussed the origins, impact and shortcomings of the “Maker-Taker” market structure.
goo.gl/oJzlVu

Markit acquires interest in commodities price reporting agency PRIMA
Markit
Markit (Nasdaq: MRKT), a leading global provider of financial information services, today announced that it has acquired an interest in commodity markets research and price reporting agency PRIMA.
goo.gl/pIQVVA

The Looming Danger of All the Investment Fees You Don’t See
By JEFF SOMMER – NY Times
Stay the course, pay attention to the big picture, and don’t sweat the details. That string of mantras makes sense for saving and investing, but only up to a point.
goo.gl/UxRC67

Saudi Arabia replaces veteran oil minister Ali al-Naimi; Khalid al-Falih to take over from Ali al-Naimi
by: David Sheppard and Anjli Raval in London and Simeon Kerr in Dubai – FT
Saudi Arabia has replaced veteran oil minister Ali al-Naimi, one of the industry’s most influential leaders for 20 years, as part of a broader shake-up at the world’s largest oil exporter.
/goo.gl/HnvdqL

Oil discoveries slump to 60-year low; Slowdown in exploration activity as energy companies seek to conserve cash
by: Ed Crooks in New York
Discoveries of new oil reserves have dropped to their lowest level for more than 60 years, pointing to potential supply shortages in the next decade.
/goo.gl/XwrdMU

London Stock Exchange Derivatives Market Launches FTSE 100 Weekly Options
London Stock Exchange Group
First time weekly contracts available on the UK’s benchmark index; FTSE Russell to establish the settlement price for contracts based on newly launched London Stock Exchange intra-day auction; SIG Susquehanna, first market maker providing liquidity on screen; LCH to act as the clearing house, providing margin efficiencies for investors in FTSE futures, monthly and weekly options
London Stock Exchange Derivatives Market (LSEDM), the derivatives market of the London Stock Exchange, today announces the launch of weekly options based on the FTSE 100 Index from 31 May 2016. This product introduction complements LSEDM product offering on the FTSE 100 Index.
goo.gl/nRz3qJ

The City of London cares more about its global rivals than the threat of Brexit
GERARD LYONS – Telegraph
London will remain Europe’s leading financial centre whether we remain in the European Union, or leave. This does not mean the referendum outcome will not affect the City. It will.
goo.gl/nQH16g

Banks Face New Rule That Magnifies Loss Reserves in Weak Economy
Yalman Onaran – Bloomberg
Impact depends on conditions when FASB standard takes effect; `It’s very hard to guess where the economic cycle will be’
A new accounting rule that will force banks to set aside provisions for bad loans long before they sour could cannibalize profits and eat into capital at U.S. lenders.
goo.gl/mSdttj

Bitcoin: Identity crisis; Despite revelations this week, the creator of the cryptocurrency still eludes treasure hunters
by: Izabella Kaminska – FT
In the shadowy world of cyber space, hacking and cryptography, intrigue and mystery are never far from the surface.
/goo.gl/bIfQ7S

Bankruptcy Code positive financial sector reform: Nomura; Japanese financial services major says there are multiple laws dealing with insolvency in India which lead to delays
Business Standard
The insolvency and bankruptcy code is a very positive financial sector reform, especially for the the banking sector, as it will give creditors a legal path for recovering their dues in a time-bound manner, says a Nomura report.
goo.gl/OufNrz

This is how the world’s most “successful” rogue trader operated
Truewealthpublishing.asia
It’s not a normal – or low risk – trading practice to amass a securities position that’s nearly five times the total economic output of Cambodia… or 1.5 times the market capitalisation of the major global bank you’re working for. It’s even less normal if the bank you’re working for has no clue about what you’re doing.
goo.gl/2ozE35

Regulatory

Derivatives Traders Adopt Rules to Clear European Credit Indexes
Bloomberg
European Union regulation comes into force on Monday that will require traders to start moving the region’s credit derivatives benchmarks through central clearinghouses. Mandatory clearing in Europe will be phased in over three years, starting with the biggest traders in February.
jlne.ws/1VQlRc7

?Fed mulling whether cleared derivatives should be covered by contract stays
Neil Roland, MLex
Asset managers could lose rights to end cleared derivatives contracts with banks facing collapse under a plan being considered by the US Federal Reserve that would expand a proposal issued earlier this week. Cleared derivatives weren’t included in Tuesday’s plan because of the “unique” benefits they offer to the economy as well as the “unique” issues that cancellation of these contracts would raise.
goo.gl/d1nnTP

Sebi asks NCDEX to compensate all castor seed traders
DNAIndia
Senior Sebi officials told dna that they are also examining the role of NCDEX’s senior management.
goo.gl/uqYg0I

Self-Regulatory Organization (SRO) Rulemaking and National Market System (NMS) Plans
SEC

    • BatsEDGX: Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees (Release No. 34-77780; File No. SR-BatsEDGX-2016-13)

 

    • BOX: Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Amend the Fee Schedule on the BOX Market LLC (BOX) Options Facility (Release No. 34-77778; File No. SR-BOX-2016-21); see also Exhibit 5

 

    • MIAX: Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Amend Its Fee Schedule (Release No. 34-77777; File No. SR-MIAX-2016-09); see also Exhibit 5

 

    • NASDAQ: Notice of Filing of Proposed Rule Change Relating to the Listing and Trading of the Shares of the First Trust Strategic Mortgage REIT ETF of First Trust Exchange-Traded Fund VIII (Release No. 34-77781; File No. SR-NASDAQ-2016-064)

 

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Bridging the Week by Gary DeWaal: May 2 – 6 and 9, 2016 (AML CIP; Ether; LOPR; Variable Annuities)
Gary DeWaal, Kattin Muchin Rosenman LLP
The Financial Crimes Enforcement Network finalized rules that will impose new due diligence requirements on banks, broker-dealers, futures commission merchants, mutual funds and introducing brokers when opening new accounts for legal entity customers (e.g., corporations and partnerships). In addition, the New York State Department of Financial Services approved the trading of a new digital currency, Ether, on a previously approved cryptocurrency exchange. As a result, the following matters are covered in this week’s edition of Bridging the Week:
goo.gl/QTaf0f

Exchanges & Trading Facilities

ICE Stock Could Rise 15%; Sprecher has built Intercontinental Exchange, home of the NYSE, into a formidable financial-exchange conglomerate. The shares look cheap.
By ANDREW BARY
Jeff Sprecher, the CEO of Intercontinental Exchange, is one of the most successful entrepreneurs in the financial-services industry.
Starting in 1997 with an electric-power trading business bought for $1, he has built a trading and data-services company with a market value of $30 billion that rivals longtime industry leader CME…
goo.gl/hzf0Ah

Record Volume in April for SPX Wednesday-Expiring Weeklys Options
BY MATT MORAN – CBOE
In February CBOE launched S&P 500® Index (SPX) Wednesday-expiring WeeklysSM options. Last month the average daily volume for the “Wednesday Weeklys” rose to a record high of 72,957 contracts.
goo.gl/s5ixC5

Hong Kong sees 40% drop in April trading
Futures & Options World – Let’s Talk Derivatives
jlne.ws/1rAtAxV

SGX reports market statistics for April 2016
SGX
Total Derivatives volume was 14.9 million, down 13% month on month and down 8% year on year.
goo.gl/CKK9WE

The SNAPSM Auction Advantage; Ready to level your playing field?
CHX
A SNAPSM Auction is an on-demand auction occurring during the regular trading session.
When CHX accepts your Start SNAP Order, a sub-second Participant-initiated SNAP Auction begins. This SEC-approved auction is conducted entirely in the dark. Exchange-initiated SNAP Auctions can also be triggered.
goo.gl/GjAJVZ

BSE plans to file IPO papers with Sebi in July; Exchange’s initial share-sale programme expected to hit market this financial year
Business Standard
BSE, Asia’s oldest stock exchange, plans to file draft papers with capital markets regulator Sebi to raise Rs 800 crore through its much-awaited initial public offer (IPO).
goo.gl/ieGeVU

Metropolitan Stock Exchange to raise funds, target new businesses; MSEI needs fresh funds to meet Rs100 crore capital requirement set for its clearing corporation by the Securities and Exchange Board of India
Jayshree P. Upadhyay – Bloomberg
Mumbai: Metropolitan Stock Exchange Of India Ltd (MSEI), formerly known as MCX-SX, is once again looking to raise funds as it tries to meet regulatory capital requirements for the exchange’s clearing corporation.
goo.gl/pE786F

MarketAxess Open Trading™ Sees Record Trading Volumes in Europe
MarketAxess
MarketAxess Holdings Inc. (Nasdaq:MKTX), the operator of a leading electronic trading platform for fixed-income securities, and the provider of market data and post-trade services for the global fixed-income markets, today announces record trading volumes in Europe via its all-to-all Open Trading™ protocols during the first quarter of 2016.
goo.gl/rvuMiT

Technology

Tokai Tokyo Securities (Asia) goes live with Fidessa’s Asian trading platform – www.fidessa.com
Press Release
Fidessa group plc (LSE: FDSA) today announced that Tokai Tokyo Securities (Asia) Limited, a wholly-owned subsidiary of Tokai Tokyo Financial Holdings, Inc., has gone live in Hong Kong with its Asian trading platform as a fully outsourced service.
jlne.ws/1T0B0Sk

Itiviti AB: HUB24 Deploys Catalys by Itiviti to Elevate Equities Trading Execution and Routing Services in Australia
Yahoo Finance
Itiviti’s client connectivity solution provides HUB24 with a rich suite of product functionality based on the Catalys FIX Engine. It ensures highly available quality connectivity and an integrated dashboard for real-time monitoring and system configuration management. Itiviti’s Services team has also developed a custom technology adaptor for integration with HUB24’s investment and superannuation platform. The solution enables HUB24 to route its domestic and international equities trading flow more effectively from its platform to multiple brokers, improving execution services delivery to its clients.
jlne.ws/1T6NEBe

Blockchain: Overcoming First-Mover Disadvantage
TABB Group
Blockchain/distributed ledgers have the power to radically shift the economics on Wall Street and around the world. The ability to decentralize trust, develop consensus-driven ledgers, re-engineer our core infrastructure away from old and legacy technologies, and the ability to pragmatically embed downstream processing logic into our contracts, has the potential to drastically change the economics of the industry and conceivably the economics of financial transactions globally.
jlne.ws/1T0Bt6U

Bloomberg Seeks Accreditation As A Local Operating Unit Of The Global LEI System
Mondovisione
Bloomberg announced yesterday it has applied to theGlobal Legal Entity Identifier Foundation, or GLEIF, to become a Local Operating Unit, or LOU, of the Global LEI System, or GLEIS. By submitting this application to the GLEIF, Bloomberg moves to the candidate stage of the LOU accreditation process and joins an existing network of LOU’s monitored by the GLEIF.
goo.gl/MwlQEV

Noise in the Markets, and Bitcoin’s ‘Creator’ Surfaces – Podcast
By PAUL VIGNA – WSJ
The world has already thrown investors two curve balls this year; what else can they handle?
goo.gl/UV4Vxv

Bitcoin has a governance problem, no matter who created it
By Jemima Kelly – Reuters
As one would-be father of bitcoin falls by the wayside, squabbling among the web-based currency’s lead developers is exposing a fundamental flaw: it must evolve to meet growing demand, but may lack a governance structure to achieve this.
goo.gl/vL99lN

Politics

Trump’s take on debt repayment raises eyebrows; Republican presidential candidate wants to ‘do a deal’ with US creditors
by: Barney Jopson and Sam Fleming in Washington
Donald Trump is stirring bewilderment over the economic policies he would pursue as president by raising doubts over the traditionally cast iron assurance that the US will repay its sovereign debt.
/goo.gl/Kw0IU3

President Trump? To Standard Bank, About as Likely as Brexit; And both may be a long shot.
Isobel Finkel – Bloomberg
Brexit and a Hillary Clinton failure: two things that would make Donald Trump happy.
goo.gl/LO92HE

Donald Trump and the sovereign debt restructuring mechanism revisited
Robin Wigglesworth – FT
Last summer, after watching one of the Republican debates when Donald Trump’s fondness for corporate bankruptcy protection came up as a topic, I saw an immediate link to one of my favourite subjects, and tweeted this.
goo.gl/ueeMha

Currencies Offer Clues on Trump Versus Clinton as Election Nears
Rachel Evans – Bloomberg
Look to the currency market for an early reading on the U.S. presidential election.
goo.gl/81NVYg

Financial Sector Gives Hillary Clinton a Boost; Some Wall Street donations shift from GOP candidates who have exited the race
By BRODY MULLINS and REBECCA BALLHAUS – WSJ
Hillary Clinton is consolidating her support among Wall Street donors and other businesses ahead of a general-election battle with Donald Trump, winning more campaign contributions from financial-services executives in the most recent fundraising period than all other candidates combined.
goo.gl/q3JUeV

Hedge Funds & Managed Futures

The US election is unlikely to fuel a stock market boom
TOM STEVENSON – Telegraph
So it’s all but settled. The US election in November will be a stand-off between Donald Trump and Hillary Clinton.
goo.gl/2RHv5s

Even venture capitalists would not gamble on a eurozone exit
Telegraph
With just weeks to go until the referendum on the UK’s membership of the European Union, both sides are making powerful arguments for and against Brexit.
goo.gl/m26Z09

Fund houses plan to pay for research themselves; Quarter of asset managers will stop billing clients for the service
by: Attracta Mooney – FT
A quarter of asset managers will stop charging clients for the research they use to make investment decisions and will cover the costs themselves, according to a poll of 100 asset managers by EY, the consultancy.
/goo.gl/qUC256

New rules have created a research headache for fund managers; Draft EU rules will force fund houses to reveal structure of fees and charges
by: Attracta Mooney and Madison Marriage – FT
Who should pay for the research fund managers use when making investment decisions? This is the question being asked on the back of new EU proposals that have created a conundrum for asset managers.
/goo.gl/SUcTFo

Hedge funds with crowded positions feel the pressure; Anne Ford on the ugly downside to managers falling in love with the same stocks
Ann Ford – FT
“Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, one by one.” Charles Mackay, Extraordinary Popular Delusions and the Madness of Crowds, 1841
/goo.gl/diXRa4

Buffett and Bogle unite against hedge funds; Vanguard’s rise is more than just a symbolic humiliation to active management, says Stephen Foley
by: Stephen Foley – FT
Warren Buffett and Jack Bogle are the octogenarian opposites of investing: Buffett, the ultimate stockpicker, whose legacy includes educating a generation of value investors; Bogle, the founder of Vanguard, who has proselytised index investing for 40 years. Yet within a fortnight of each other, they gave essentially the same speech.
/goo.gl/Cr4U6c

Banks & Brokers

Credit Suisse Banker Case Said to Widen With 3 New Suspects
Hugo Miller – Bloomberg
All suspects are former employees of Zurich-based bank; Fourth criminal complaint filed against original banker
Geneva prosecutors are widening their probe into Credit Suisse Group AG and one of its ex-wealth managers, identifying another three former employees as suspects in a case looking into unauthorized trades on the accounts of rich eastern Europeans, according to two people familiar with the investigation.
goo.gl/rkmXrF

Credit Suisse’s Swiss and wealth units to run asset management
Reuters
Credit Suisse (CSGN.S) is placing asset management under the twin direction of its wealth management and Swiss banking divisions, it said on Sunday, announcing a further strategy rejig after a shake-up in October.
goo.gl/NHMG9R

Clearing & Settlement

Users of Listed Options Benefit from Changes to DOL Fiduciary Rule
OCC
On April 6th, the Obama Administration unveiled the Department of Labor’s fiduciary rule, which is designed to transform the way the financial services industry delivers retirement savings advice. We are gratified that the final rule moved away from limiting the ability of investors to hold listed options in their retirement accounts. We are concerned that the final rule may limit the ability of brokers to provide education regarding listed options to self-directed investors. We will continue to study the rule, and if appropriate, continue to fight aggressively on behalf of the users of our markets.
goo.gl/6ha3lH

Eurex Adds TriReduce Compression
Markets Media
Eurex Clearing, Deutsche Börse’s central clearer, has completed the first triReduce compression cycle for euro interest rate swaps as the overall volume of compressions for interest rate derivatives continues to grow.
jlne.ws/1rKgYUX

Distributed ledgers, centralised logic and competition
FT Alphaville
Blockchain fever has, as we all know, turned into private permissioned distributed ledger fever — loosely summarised as the idea that the advantages of blockchain can be stripped out of the only tried and tested blockchain (bitcoin) then applied to pre-existing token framework (a.k.a fiat money), without the need for costly proof of work verification mechanisms.
jlne.ws/1rKgKx8

Langford-Nachman.com to Acquire Derivatives Clearing Agents
EIN News
Langford Nachman, an independent over-the-counter broking house specialising in commodity and futures trading, today announced that would acquire a Clearing Derivatives Group. Terms of the transaction and the name of the company being acquired were not disclosed. The Hong Kong Trading Authorities has approved the transaction, which is expected to close in the current month.
jlne.ws/1rKgRc3

Indexes & Products

Burton Malkiel Is Still an Indexing Fan, but a ‘Smart Beta’ Skeptic
WSJ
Smart beta? Just smart marketing, says Burton G. Malkiel. Mr. Malkiel, the economist known for being one of the biggest proponents of index investing, continues to be among the skeptics of these popular mutual funds and exchange-traded funds, which blur the lines between active and passive management.
jlne.ws/1rKhLFi

This new ETF demonstrates Wall Street’s unbridled hunger for millennial money
By MARK DECAMBRE – MarketWatch
If you can’t beat ’em, join ’em. Or, in the case of Wall Street vis-à-vis millennials, if they befuddle you, figure out a way to make money from them.
goo.gl/9vYUW5

Asian Fixed Income: Chinese Corporates’ Spread Widened With Headline Risk
Indexology – S&P Dow Jones Indices
According to the S&P China Corporate Bond Index, the market value of Chinese corporate bonds was approximately CNY 26.4 trillion and represented 36% of the overall China bond market as of May 5, 2016. It is a robust expansion compared with the mere 6.7% exposure in 2007 The yield-to-maturity of the S&P China Corporate Bond Index came down 170 bps to 3.66% in 2015. This spread tightening in 2015 was largely due to improved liquidity, particularly with the correction in A-shares in the first half of 2015.
However, this trend is reversing as fundamentals start to weigh in.
jlne.ws/1rKhD8V

Enforcement

SEC: Financial Adviser Defrauded Pro Athletes and Lied to SEC Examiners
SEC.gov
According to the SEC’s complaint filed today in federal court in Manhattan, when SEC examiners uncovered the unauthorized withdrawals that Louis Martin Blazer III made from his clients’ accounts and asked him to explain the transactions, he lied and produced false deal documents that he created after the fact in a failed attempt to hide his misconduct.
jlne.ws/1WjprMi

ITG CEO: 98% of our clients are past the SEC settlement; Chief executive officer Frank Troise claims ITG’s top 100 global accounts have returned to the business following record SEC fines.
By Hayley McDowell – The Trade
ITG revealed 98% of its clients who paused activity following the Securities and Exchange Commission (SEC) dark pools fine have now resumed trading with the agency broker.
goo.gl/bCjB1c

Environmental & Energy

Oil’s Cold Shoulder For Canada
Liam Denning – Bloomberg
The scenes from Alberta’s raging wildfires are apocalyptic. Yet one constituency seems strangely unmoved: the oil market.
goo.gl/B1AvBl

Saudi Arabia names Khalid al-Falih energy minister to replace Naimi
BY RANIA EL GAMAL AND REEM SHAMSEDDINE – Reuters
Saudi Arabia, the world’s largest crude oil exporter, on Saturday appointed Khalid al-Falih, chairman of the state oil giant Saudi Aramco, as its new energy minister, replacing Ali al-Naimi, who had held the post since 1995.
goo.gl/1l32xi

Bonds Buy Time for Arab Oil States in for $900 Billion Shortfall
Lyubov Pronina – Bloomberg
Qatar said planning to follow Abu Dhabi with Eurobond sale; April busiest month for Middle East issuance since mid-2014
The let-up in oil’s two-year downward spiral is allowing Middle Eastern governments and companies to step back from raiding reserves and belt-tightening by reopening access to international capital markets.
goo.gl/wQJB0c

OPEC Leaves Us Exposed to Oil Shock
By Julian Lee – Bloomberg Gadfly
OPEC’s strategy to lock down its share of the oil market comes with a worrying by-product: rising production means the world is less able to cope with a big supply disruption than at any time since the financial crisis.
goo.gl/QGldZL

Photographer: Krisztian Bocsi/Bloomberg; Oil Isn’t the Only Commodity Threatened by Tesla’s Rise
Eddie Van Der Walt – Bloomberg
Elon Musk’s plans for the car industry promise to disrupt yet another market – platinum.
But it’s not just Musk. Pretty much every carmaker is rushing to introduce electric cars to end use of gasoline and diesel. As consumers switch, demand for the metal – essential to stripping toxic emissions from tailpipe exhausts – declines. With diesel already suffering from the Volkswagen emissions scandal, the future looks increasingly bleak. Even Saudi Arabia is preparing for a post-oil era.
goo.gl/85da5w

Saudi’s New Oil Boss Vows to Maintain Policy
Anthony Dipaola – Bloomberg
Al-Falih seen sticking to policy to defend oil-market share; Kingdom may exceed record output level to meet summer demand
Saudi Arabia will probably keep producing crude at near-record levels under its newly appointed oil minister, Khalid Al-Falih, as the world’s largest exporter sticks with his predecessor’s policy of defending market share against higher-cost shale.
goo.gl/g7qWWM

Asia-Pacific

China’s Stock Traders Seek Comfort in Appliance Makers
Bloomberg News
Midea outperforms benchmark index as Robam, Supor hit records; Property boom fueling earnings recovery, Citic analyst says
China’s investors are betting makers of home appliances will buck a slumping stock market and an economic slowdown.
goo.gl/9pcPjL

Chinese Business Feels the Sting of the Party; Entrepreneurs get help from the state—and more threats.
Dexter Roberts – Bloomberg
China’s entrepreneurs shouldn’t simply make money. They must “love the motherland, love the people, love the Communist Party, and actively practice socialist core values,” President Xi Jinping told businessmen in March.
goo.gl/muj6bh

China fights for market economy status; Beijing had thought trade advantage would come automatically at end of this year
by: Lucy Hornby in Beijing and Shawn Donnan in Washington – FT
China is intensifying lobbying to gain “market economy status” under the World Trade Organisation despite growing opposition in Europe and the US to a move that would make it harder for other major economies to bring anti-dumping cases against Beijing.
/goo.gl/ZJkdKO

Even China’s Party Mouthpiece Is Warning About Debt
Bloomberg News
Authoritative person’ is cited in full-page commentary; China must face up to bad-loan risks, not hide them
China’s leading Communist Party mouthpiece acknowledged the risks of a build-up of debt that is worrying the world and said the nation needed to face up to its nonperforming loans.
goo.gl/69RZJ9

Frontier Markets

Sebi asks Swar group firms to refund investors’ money; It was alleged that the companies had launched and operated CIS without obtaining registration from Sebi
Business Standard
Markets regulator Securities and Exchange Board of India (Sebi) has ordered two Swar group companies and their directors to refund investors’ money, which was raised through illegal investment schemes, in three months.
goo.gl/023OSq

BSE SME platform sees 30 IPOs in next 3-month; The 118 companies that are currently listed on BSE’s SME platform, have raised a over Rs 867 crore
Business Standard
Leading stock exchange BSE today said it expects 30 initial public offerings on its small and medium-sized enterprises (SME) platform in next three months.
goo.gl/ddqfEt

Over-regulation leads to shadow banking: Rajan
RBI governor says entrepreneurship in the country should not be killed
Business Standard
Reserve Bank of India Governor Raghuram Rajan on Saturday warned against excessive banking regulation, saying this may lead to activities shifting to a shadow financial system.
goo.gl/pVF4yh

North Korea Can’t Stamp Out Its Unofficial Economy
Nicholas Wadhams and Sam Kim – Bloomberg
Unofficial rate for won now more widely used in North Korea; Modest market economy defies efforts to stamp it out
For a country that trumpets the success of its economic system and the power of its local currency, it is very difficult as a foreigner in North Korea to buy anything with it.
goo.gl/VMQAzx

MOEX Bows FX Market Activity Analytics; The new tool will provide detailed market activity in Moscow Exchange’s currenty markets.
Joanne Faulkner – WatersTechnology
The Moscow Exchange has launched an “enriched market data product,” dubbed MOEX Statistics, to provide high-frequency and manual traders with more granular data about market activity on the exchange’s currency marketplace.
goo.gl/MqK52R

NCDEX gets all its warehouse service providers accredited by regulator
Business Line
The National Commodity and Derivatives Exchange has completed the WDRA accreditation of all the 381 warehouses providing services to it. The accreditation means that the warehouse is compliant with all the Warehousing Development and Regulatory Authority (WDRA) norms, which include recording online details of all commodities stored, maintaining the quality of the commodities, and ensuring the fumigation process is followed.
goo.gl/1JgmnG

NSEL Scam: MPID court orders fund transfer from Lotus Refineries’ account; On March 4, the court had attached 37 properties of ARK Imports and directed competent authority to fetch its market valuation
Dilip Kumar Jha – Business Standard
The Maharashtra Protection of Interest of Depositors (MPID) court has ordered transfer of Rs 12.74 crore from 27 bank accounts of Lotus Refineries Pvt Ltd to the account of the competent authority in the Rs 5,600 crore National Spot Exchange Ltd (NSEL) scam case.
goo.gl/qELQBK

FTIL board removal: CLB fixes next hearing for May 23
Business Line
The Company Law Board (CLB) has set May 23 as the next hearing date in the Financial Technologies’ board removal case. This emerged at the CLB hearing on Friday in the Capital.
goo.gl/aMYUgT

Miscellaneous

Cargill execs moving out of Lake Minnetonka mansion
By MIKE HUGHLETT , STAR TRIBUNE
Cargill can lay claim to one of the corporate world’s unique headquarters: a lakeside mansion complete with a marble staircase and 13 fireplaces, all modeled on a French château.
goo.gl/CsaOwK

The Louis Vuitton America’s Cup World Series New York to Ring The Nasdaq Stock Market Closing Bell
By GlobeNewswire
America’s Cup will visit the Nasdaq MarketSite in Times Square in celebration of the race returning to New York for the first time since 1920 with Louis Vuitton America’s Cup World Series on May 7-8, 2016.
goo.gl/YXl91x

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About Author

Doug Ashburn is a former editor-at-large of John Lothian News. He left in late 2016 and is now the managing editor of T3 Custom.