Breaking News

HFT as an insight into where fintech is going; Brokerage, CEO charged with abetting manipulative high-frequency trading; Bloomberg suffers rare drop in terminal numbers as banks cut back

First Read

Keith Todd Steps Down From ION Trading
JLN

John Lothian News has learned that Keith Todd, executive chairman, agency trading and processing at ION Trading, has stepped down from his role at the company. In an exclusive interview with JLN, he said it was time to step aside after 14 years at the company, which has Ffastfill, Patsystems and Rolfe & Nolan among others under its operations.

Altogether, he spent 14 years with Ffastfill and ION. Todd’s position has been filled by ION’s Silvio Oliviero, who has been working closely with him for the past several years. During Todd’s time at ION and Ffastfill, the company expanded its technology offering to include front, middle and back office technologies with a software as a service (SaaS) approach. The firm has also been spending resources on some major new product upgrades on its back office technology in that space as well.

“It’s time for me to step back,” he said. “The products are great and we’re in a very good position.”

As for Todd, he said he will still make some appearances at key conferences this year but Oliviero is now handling his previous duties. He also is looking at helping a couple of other technology companies, neither of which compete with ION.

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JLN Exchange Leader Series 2017: Nasdaq’s Friedman on New Tech and Positive Momentum
JohnLothianNews.com

Nasdaq opened a new chapter in 2016 when 13-year-tenured CEO Bob Greifeld retired, handing the reins to longtime executive Adena Friedman. Friedman became CEO of the exchange group in November, but that was far from the only big move made by the company last year.

Read the rest and watch the video »

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Elon Musk’s Billion-Dollar Crusade to Stop the A.I. Apocalypse
Maureen Dowd – Vanity Fair
Elon Musk is famous for his futuristic gambles, but Silicon Valley’s latest rush to embrace artificial intelligence scares him. And he thinks you should be frightened too. Inside his efforts to influence the rapidly advancing field and its proponents, and to save humanity from machine-learning overlords.
/goo.gl/lXkS2l

***** How many people in this industry who attended the FIA Boca Raton conference understand AI? How many understand Big Data or machine learning? If you want to understand where risk is going to be in the next several years, this is the spot.

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Regulation as a Main Driver of Change in the Sell Side Industry – Karl Hagerman, SEB
MarketsWiki Education

“Technology is really becoming an enabler to stay compliant because you can understand the huge amount of data in these complex networks that you have to store, structure and provide to the authorities if requested. That is lot of big data management.”

Karl Hagerman works in the engineering team for the Sweden-based corporate bank SEB. He witnessed the regulations and financial innovations that have shaped the Nordic markets over the past thirty years and will “radically change” markets in 2018.

Read the rest and watch the video »

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Investor burned by Madoff leaps to death from luxury hotel balcony
Shawn Cohen, Erik Blades and Joe Tacopino – NY Post
A hedge-fund executive who lost millions in Bernie Madoff’s infamous Ponzi scheme jumped to his death from the luxury Sofitel New York Hotel on Monday afternoon, authorities said.
/goo.gl/xkD9QA

***** Suicide plagues the rich and poor. I recently learned a high school friend made the ultimate decision after overwhelming losses in the housing rehab business after the financial crisis.

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Giant Gold Coin Worth $4 Million Stolen in Berlin Museum Heist
Karin Matussek – Bloomberg
Burglars stole a 100-kilogram (220-pound), solid-gold coin worth $4 million from a Berlin museum in a heist out of a Hollywood movie.
bloom.bg/2nvXq7L

***JB: Pocket change.

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How trading ETFs may lose you money—especially if you’re a guy
Ryan Vlastelica – MarketWatch
Exchange-traded funds, long hailed as a godsend by offering cheap and easy access to basically any sector, asset class, region, or strategy on the market, may be giving rise to a bad habit that experts say can erode investors’ returns.
/goo.gl/sYypSl

***** I need a WILD advisor.

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Monday’s Top Three
One of the most popular stories this year (so far) was CNBC’s Traders used poker games and food menus to make a killing off illegal trades and cover it up but then AI found out. Most any other day the WSJ article The High-Speed Trading Behind Your Amazon Purchase would have been in first place. Rounding out the top three was Evening Standard’s Michael Spencer moves NEX and man cave from the City

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MarketsWiki Stats
96,492,431 pages viewed; 22,393 pages; 204,543 edits
MarketsWiki Statistics

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Lead Stories

HFT as an insight into where fintech is going
Izabella Kaminska – FT
Markets are cyclical, Darwinian and subject to diminishing returns. Nothing new in that observation. But people do seem to forget it all the time. Case in point: high-frequency trading (HFT). Circa 2009-2010, algorithmic trading techniques were considered a veritable goldmine for those who knew and understood how to deploy them against dumb human competitors.
/goo.gl/SwY7FT

Brokerage, CEO charged with abetting manipulative high-frequency trading; Lek Securities charged with allowing a trader’s ‘layering,’ a form of market manipulation involving high-frequency trading
By STEVE GOLDSTEIN – MarketWatch
The Financial Industry Regulatory Authority and the major stock exchanges on Monday brought charges against a brokerage and its CEO for allegedly helping a customer engage in what’s called “layering,” which is a form of market manipulation involving high-frequency trading.
/goo.gl/W6Bdpb

Bloomberg suffers rare drop in terminal numbers as banks cut back; First decline since 2009 comes as overall spending on financial data rises
by: Hannah Murphy – FT
Bloomberg suffered its second-ever drop in the number of ubiquitous terminals dotting global trading desks as it fell victim to cost cutting by the finance industry.
/goo.gl/IZOAa5

Hedge fund closures hold nuggets for stock market investors; Move by Eton Capital founder Eric Mindich to close shop may be a warning sign
by: Miles Johnson – FT
Hedge fund managers may be criticised for their recent returns but they have consistently displayed a razor sharp sense of timing when it comes to picking when to sell their own businesses.
/goo.gl/A4n3de

How bullish Nex Exchange boss Patrick Birley is taking aim at the London Stock Exchange’s junior market
William Turvill – City AM
Patrick Birley is chief executive of the Nex Exchange, part of Michael Spencer’s Nex Group
In many ways Patrick Birley is everything you would expect of the chief executive of junior stock market operator Nex Exchange. In his own words, “I’ve worked for an awful lot of exchanges”: LCH Clearnet, the NYSE Euronext, the European Climate Exchange and the London Metal Exchange to name a few.
/goo.gl/9NhYNT

ECB criticised for overstepping mandate in eurozone crisis; Transparency International urges central bank to withdraw from bailout troika
by: Mehreen Khan in London – FT
The European Central Bank improperly veered into political activity during the eurozone crisis and should withdraw from the “troika” of international bailout monitors, according to anti-corruption watchdog Transparency International.
/goo.gl/ukd6Ap

Larry Summers: The robots are coming, whether Trump’s Treasury secretary admits it or not
Lawrence H. Summers – The Washington Post
As I learned (sometimes painfully) during my time at the Treasury Department, words spoken by Treasury secretaries can over time have enormous consequences, and therefore should be carefully considered. In this regard, I am very surprised by two comments made by Secretary Steven Mnuchin in his first public interview last week.
wapo.st/2oaguac

Turkish gold trader hires Giuliani, Mukasey in U.S. sanctions case
Jonathan Stempel – Reuters
A wealthy Turkish gold trader’s decision to hire former New York City Mayor Rudolph Giuliani and former U.S. Attorney General Michael Mukasey to represent him, as he defends against charges he conspired to violate U.S. sanctions on Iran, raises a potential conflict of interest, prosecutors said. At least eight big banks allegedly victimized by the trader, Reza Zarrab, are current or former clients of Giuliani and Mukasey’s law firms, acting U.S. Attorney Joon Kim in Manhattan said in a letter dated Monday to the federal judge hearing the case.
/goo.gl/A0A8ux

Seeing the OTC Derivatives Markets (and the Financial Markets) Like a State
Streetwise Professor
In the years since the financial crisis, and in particular the period preceding and immediately following the passage of Frankendodd, I can’t tell you how many times I saw diagrams that looked like this.
/goo.gl/MwBnrf

Elon Musk’s new co could allow uploading, downloading thoughts: Wall Street Journal
Reuters
Tesla Inc founder and Chief Executive Elon Musk has launched a company called Neuralink Corp through which computers could merge with human brains, the Wall Street Journal reported, citing people familiar with the matter.
/goo.gl/cyKBxz

BTIG Hires King; Lubin Leaving CBOE
MarketsMedia
As part of its ongoing buildout in fixed income, BTIG hired Dennis King as a Managing Director in Debt Capital Markets. Based in New York, King will focus on originating and structuring new issue products for distribution to institutional clients.
bit.ly/2orxCHy

Brexit: UK backing away from threat to leave with no deal, say EU diplomats; UK officials recognise that failure to agree post-Brexit trade deal with EU27 would cause havoc, according to EU sources
Patrick Wintour Diplomatic Editor – The Guardian
Tuesday 28 March 2017 03.16 EDT First published on Tuesday 28 March 2017 01.32 EDT
European diplomats based in the UK say the British government is stepping back from its threat to leave the EU without a trade deal if negotiations break down.
/goo.gl/kKxhBQ

Deloitte names Scott Baret leader of U.S. banking and securities team
Reuters
Audit and tax services firm Deloitte named Scott Baret leader of its U.S. banking and securities practice.
reut.rs/2orUxmg

IRS Crackdown on Bitcoin Exchange Fuels Privacy Worries; Coinbase resists summons demanding transaction and user profile records
By JACOB GERSHMAN – WSJ
The federal government is ramping up pressure on a leading digital-currency company to turn over a vast amount of its customer records as part of a tax-evasion probe, an effort that is raising privacy alarms.
/goo.gl/x3LW0n

The Biggest Risk From the Dollar’s Drop May Not Be What You Would Guess
by Andrea Wong – Bloomberg
Cracks emerge in carry trade as yen, euro stage rally; Societe Generale says euro provides opportunity to double down
A high-risk corner of the $5 trillion currency market has become the collateral damage of the dollar selloff.
/goo.gl/6q7bRt

Exchanges, OTC and Clearing

System Status RSS
CBOE
CBOE opened on time at 8:30 a.m. CT this morning, however, the exchange experienced connectivity issues with a number of firms. As of 9:08 a.m. CT, connectivity was re-established, but CBOE is still working with some firms regarding their remaining individual issues. Trading was never halted.
bit.ly/2nb2I6h

DTCC’s Legal Entity Identifier Service, GMEI Utility, Readies Industry for MiFID II Implementation
News Wire
The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, today announced that its subsidiary operating the Global Markets Entity Identifier utility (GMEI utility) continues to operate as the largest legal entity identifier (LEI) issuer, by share of the total LEIs issued worldwide, in the run-up to MiFID II implementation. Having issued more than 240,000 LEIs to entities from over 200 jurisdictions, representing approximately 50% share, the GMEI utility is best-placed to help the industry ready itself before the regulation comes into force.
/goo.gl/fdNEZS

Investment Association pursues reporting frameworkl; New code developed by the Investment Association to outlines transaction cost reporting framework.
By Hayley McDowell – The Trade
The Investment Association has launched a consultation on a new standardised transaction costs reporting framework to benefit the buy-side.
/goo.gl/YrWlOm

Hong Kong Exchange CEO says to consult market on weighted voting rights
Reuters
The Hong Kong stock exchange will consult with the market on whether or not to launch weighted voting rights, Charles Li, the CEO of the exchange said on Monday. In January, Hong Kong Exchanges and Clearing Ltd said the bourse is proposing to launch a new listing venue that would allow companies with different voting rights to go public in the city, in a bid to remain a global listings powerhouse.
/goo.gl/wVpVV2

EQDerivatives: “Opportunities Remain As European Elections Drive VSTOXX Flow”
Article by Georgia Reynolds, EMEA Reporter – Via Eurex
The uncertainty surrounding populist parties across Europe has been creeping into equity markets over the last few months, with elevated levels spotted in the term structure of the Euro Stoxx 50 Volatility Index, as investors position around the upcoming elections. Although levels in the VSTOXX have subsided following Prime Minister Mark Rutte’s victory in the Dutch election, opportunities still remain as the French election grows nearer. Georgia Reynolds reports on flow and positioning trends in Europe’s benchmark volatility index.
/goo.gl/7JA6gg

Fintech

Hedge Funds Are Training Their Computers to Think Like You
Saijel Kishan – Bloomberg
Hedge funds have been trying to teach computers to think like traders for years. Now, after many false dawns, an artificial intelligence technology called deep learning that loosely mimics the neurons in our brains is holding out promise for firms. WorldQuant is using it for small-scale trading, said a person with knowledge of the firm. Man AHL may soon begin betting with it too. Winton and Two Sigma are also getting into the brain game.
bloom.bg/2oab1Ad

Trafigura tests blockchain for settling US oil market deals; Trading house and French bank Natixis search for cheaper way to clear transactions
by: Gregory Meyer in New York and Neil Hume in Lausanne – Bloomberg
The commodities trading house Trafigura and a bank are testing blockchain as a way to settle deals in the US oil market, a sign of the potential for digital technology to change how barrels of crude are bought and sold.
/goo.gl/CClSvX

Elon Musk Launches Neuralink to Connect Brains With Computers; Startup from CEO of Tesla and SpaceX aims to implant tiny electrodes in human brains
By ROLFE WINKLER – WSJ
Building a mass-market electric vehicle and colonizing Mars aren’t ambitious enough for Elon Musk. The billionaire entrepreneur now wants to merge computers with human brains to help people keep up with machines.
/goo.gl/iKj4B1

Bloomberg holds market share as terminal users decline; Global spending on financial market data and news reached record highs in 2016.
By Hayley McDowell – The Trade
Users of Bloomberg terminal declined for the second time in the company’s history in 2016, despite the firm holding a 33% financial data market share.
/goo.gl/YlVrpJ

The Changing Fintech Landscape in Asia-Pacific and Its Security Implications
By Preeti Sahu – Security Intelligence
The definition of fintech, or financial technology, has grown in leaps and bounds thanks to all the disruption it has brought. Any services, aside from mainstream banking and financial tools, that aim to improve personal or commercial finance through innovation, education, banking, investment, payment, advisory or blockchain can be classified as subsets of fintech.
/goo.gl/rpg08l

Politics

Deutsche Bank in Bind Over How to Modify $300 Million Trump Debt
Greg Farrell and Caleb Melby – Bloomberg
A small detail in Deutsche Bank AG’s loans to Donald Trump’s real-estate business has turned into a headache at the bank, as its effort has stalled to restructure part of the $300 million or so in debt.
bloom.bg/2oa8qq1

Second-Order Effects Are the Real Risks to Trump Trade
By Ben Emons – Bloomberg
The “Trump Trade” that underpinned global markets for the last few months is at risk of falling apart. The reasons can be linked to concern that President Donald Trump will fail in his plan to repeal and replace Obamacare, raising doubts about his ability to push through anytime soon items deemed more important for markets, such as tax cuts, regulatory reform and infrastructure spending.
/goo.gl/2GsZPz

Investor Carl Icahn Dragged Into Gambler’s Insider Trading Trial
By ALEXANDRA STEVENSON – NY Times
Carl Icahn, a billionaire investor and an unpaid adviser to President Trump, has been pulled into a high-profile insider trading trial taking place in federal court in Manhattan.
/goo.gl/LA3YFU

The Cost of Trump’s Deepening Unpopularity
By Jonathan Bernstein – Bloomberg
Gallup’s first post-health care presidential approval poll showed President Donald Trump down to 36 percent approval, a new low. He had previously fallen slightly below Barack Obama’s low point; he’s now one tick lower than either Bill Clinton or Gerald Ford at their worst. Next up? Ronald Reagan’s low was 35 percent approval, as the effects of a deep recession peaked in January, 1983, with unemployment over 10 percent. Lyndon Johnson matched that number in August 1968, after widespread opposition to the war in Vietnam had already driven him from seeking re-election. That Trump has almost matched them without those cataclysmic events is quite an achievement.
/goo.gl/pkxrPL

Regulation

Ex-Barclays Trader Says Cash Desk Never Set Libor Independently
Bloomberg
A former Barclays Plc swaps trader on trial for manipulating a key interest-rate benchmark said he never saw “any evidence” that the cash desk set Libor independently from the bank’s commercial position during a fractious exchange with a prosecution lawyer.
bloom.bg/2nvWKzl

What the Future of S.E.C. Enforcement Holds Under Jay Clayton
Peter J Henning – NY Times
A frequently told story about the Securities and Exchange Commission’s adoption of Rule 10b-5, the principal antifraud rule used in hundreds of cases every year, is that after the five commissioners reviewed the proposal, the only one to speak was Sumner Pike, who simply said, “Well, we are against fraud, aren’t we?”
nyti.ms/2oazJk3

FINRA and Exchanges Charge Lek Securities and CEO Samuel F. Lek with Aiding and Abetting Securities Fraud
FINRA.
The Financial Industry Regulatory Authority, along with the New York Stock Exchange; NYSE Arca; NYSE MKT; the four Bats Exchanges, Bats BZX, Bats BYX, Bats EDGA, and Bats EDGX; Nasdaq; Nasdaq BX; and the International Securities Exchange, today announced that they have commenced disciplinary proceedings against Lek Securities Corporation and its Chief Executive Officer, Samuel F. Lek, for aiding and abetting manipulative trading by one of its customers.
/goo.gl/PFimoz

Trump May Be Offering Coal Leases That No One Wants
Tim Loh – Bloomberg
President Donald Trump is expected to lift a moratorium on federal coal-mining leases — though it probably won’t do the industry much good until years after he’s left office.
bloom.bg/2oagjLO

SEC Halts Boiler Room Scheme Involving State Lottery Tickets
Mondovisione
The Securities and Exchange Commission today announced charges against a Florida-based company, its CEO, and its top sales agent accused of conducting a boiler room scheme that solicits investments in a business purportedly facilitating online and cell phone sales of lottery tickets in various states.
/goo.gl/WHbTRW

SEC Halts Fraud Targeting Seniors
SEC.gov
The Securities and Exchange Commission today announced an emergency asset freeze and temporary restraining order against a Chicago-based investment adviser and his financial management company accused of scamming elderly investors out of millions of dollars.
/goo.gl/DbXWrW

Hearing entitled “Examining the Impact of the Volcker Rule on the Markets, Businesses, Investors, and Job Creators”
House Committee on Financial Services
Wednesday, March 29, 2017 10:00 AM
/goo.gl/MeovHi

Subcommittee on General Farm Commodities and Risk Management – Public Hearing RE: The Next Farm Bill: Commodity Policy Part I
Committee on Agriculture
Tuesday, March 28, 2017 – 10:00 a.m.
/goo.gl/e4jVkl

Fostering Economic Growth: The Role of Financial Companies – Hearings
U.S. Senate Committee on Banking, Housing, and Urban Affairs
March 28, 2017 09:30 AM
/goo.gl/xoxf4a

Tesco admits FCA’s market abuse allegations; Tesco faces £85 million charge after misleading investors on profits.
By Hayley McDowell – The Trade
Tesco has admitted to market abuse misconduct put forward by the Financial Conduct Authority (FCA) and will pay compensation to investors who purchased its shares.
/goo.gl/Rwx5BK

ESMA discusses haircuts in EU securities financing transactions
ESMA
RISK ANALYSIS & ECONOMICS – MARKETS INFRASTRUCTURE INVESTORS
The European Securities and Markets Authority (ESMA) issued a research piece on shadow banking published in its recent report on trends, risks and vulnerabilities (TRV).
/goo.gl/D9epYx

Investing and Trading

Hedge fund executive, 56, who invested billions with Bernie Madoff, leaps to his death from 24th story of New York’s luxury Sofitel hotel; Charles W. Murphy jumped to his death, landing on a fourth floor terrace; Witnesses said he was wearing a dark business suit
The 56-year-old plummeted 20 floors before coming to land on the terrace; Murphy used to be an executive with Fairfield Greenwich Group, who was Madoff’s biggest feeder fund
Murphy, 56, is now the fourth person connected to Madoff to commit suicide; He had moved onto working for Paulson & Co. New York-based hedge fund
By Kiri Blakeley For Dailymail.com
View comments
A hedge fund manager who lost billions of his clients’ money to Bernie Madoff’s Ponzi scheme leaped to his death from the luxury Sofitel hotel in midtown Manhattan.
/goo.gl/sQPjvs

Bill Gross settles Pimco lawsuit for about $81 million: sources
Jonathan Stempel and Jennifer Ablan – Reuters
Bill Gross has reached a roughly $81 million settlement of his lawsuit against Pacific Investment Management Co, ending a bitter 2-1/2-year drama over the departure of the star bond investor from one of the world’s biggest money managers.
reut.rs/2oakoQg

Gross’s War Against Pimco Ends With Public Feel-Good Moment
by John Gittelsohn – Bloomberg
Fund firm said to pay $81 million to resolve contract claim; Settlement signals ‘a new day’ for Gross and Pimco: Ex-CEO
For Bill Gross, the long goodbye is finally over.
/goo.gl/95Atlw

Bank investors cool down after heady post-election ride
Ben McLannahan – Financial Times

Investors who piled into bank stocks as part of the “Trump trade” are now pulling back, fearing that the president’s defeat over healthcare could bode ill for his plans to lower taxes or ease rules around the financial sector.
on.ft.com/2orRiLv

FTSE Russell weighs merits of including Snap in indices; Concerns raised about messaging app provider’s lack of shareholder rights
by: Jennifer Hughes in Hong Kong – FT
Index provider FTSE Russell is to consult with stakeholders about including Snap in its widely followed Russell indices, amid investor worries about lack of shareholder rights at the newly listed messaging app provider.
/goo.gl/7riqvr

Bill Gross settles feud with Pimco for $81m; ‘Family disagreement’ with bond king’s former firm ends with mutual praise
by: Stephen Foley in New York – FT
Pimco has agreed to pay $81m to settle a lawsuit from its founder Bill Gross, in a detente that was almost as startling as the two-and-a-half year feud that has gripped the world of bond investing.
/goo.gl/Rkat73

The Who’s Who Of Hedge Fund Managers And Traders: 15 Highest Earners
Shanthi Rexaline , Benzinga
An investment vehicle that has taken the investing world by storm, hedge funds have the exclusivity of being open only to sophisticated investors such as institutions and individuals with significant assets. Given the diversification and risk reduction opportunities these offer, there are reasons more than one to possess them as part of your investment portfolio.
/goo.gl/IzxhNh

Institutions

Inflation would have to be much stronger for four rate hikes in 2017: Fed’s Evans
Reuters
The case for four interest rate hikes in the United States this year is not yet solid and would require a stronger lift in inflation, Chicago Federal Reserve Bank President Charles Evans said at an event in Madrid.
/goo.gl/v8BvwS

End of an Era on Goldman’s Mortgage-Trading Desk
MoneyBeat – WSJ
The departure of Michelle Gill, who headed Goldman’s mortgage-securitization business, is the end of an era of sorts. Ms. Gill, who The Wall Street Journal reported Friday is joining an opportunistic-investing desk at private-equity firm TPG, was among the last remaining senior members of Goldman’s precrisis mortgage-bond team.
on.wsj.com/2orCuNd

UBS names leaders in U.S., European wealth management product units
Reuters
UBS (UBSG.S) named new leaders of its European and U.S. divisions responsible for wealth management products, the world’s biggest private bank said on Monday, as the bank looks to increase collaboration among its global wealth business.
/goo.gl/dSygaK

Regions

Emerging market non-resident inflows hit highest since 2013 -IIF
Dion Rabouin – Reuters
A measure of daily portfolio flows to emerging market assets rose to its highest level in nearly four years, the Institute of International Finance said Monday.
reut.rs/2oac96N

Mugabe’s Zimbabwe gets busy creating ‘fiction money’
Ed Cropley and MacDonald Dzirutwe – Reuters
When President Robert Mugabe scrapped the Zimbabwe dollar in 2009, most of his people thought this meant the end of runaway money-printing and hyperinflation that had rendered the currency worthless. They may have been wrong.
/goo.gl/oT5MgN

An Unexplained 85% Fall Is Nothing New for Hong Kong Stocks
Kana Nishizawa, Benjamin Robertson and Sofia Horta E Costa – Bloomberg
One of the most striking things about the 85 percent plunge in Huishan Dairy Holdings Co.’s stock on Friday was how little it surprised market observers in Hong Kong.
bloom.bg/2oaguH5

Chinese brokerage Guotai Junan to raise HK$16b in Hong Kong IPO
Jane Li – South China Morning Post
China’s third biggest brokerage by assets, Guotai Junan Securities, plans to raise HK$16.04 billion in an initial public offering (IPO) in Hong Kong, the company said on Monday.
/goo.gl/FfTCkY

Reducing security-specific risk in Asia REITs
Catherine Yoshimoto – FTSE Russell
As I highlighted in a previous post, real estate indexes can provide an important building block for a diversified global investment allocation. But for real estate investors setting their sights solely on real estate investment trusts (REITs) in the Asia ex Japan region, a single security can comprise a significant portion of a traditional market cap weighted index. The FTSE EPRA/NAREIT Asia ex Japan REITs 10% Capped Index (“the Capped Index”) addresses this issue in its methodology, resulting in a more balanced, diversified index.
/goo.gl/gLHGIM

Hedge Fund Sees 21% Returns on Advice From Nobel Prize Pickers
Jonas Cho Walsgard – Bloomberg
If you’re investing in health care stocks, you’d better ask the experts. Thanks to the advice from a range of professors, Swedish hedge fund Rhenman Healthcare Equity L/S has delivered an average annual return of 21 percent since it started in 2009. Asking clinical expertise before investing in complex products is a must for Henrik Rhenman, who manages the 460 million-euro ($500 million) fund.
bloom.bg/2oavfd2

Sebi chief AjayTyagi meets market participants, lawyers; The agenda was to listen to the issues faced by the industry
Joydeep Ghosh – Business Standard
Ajay Tyagi, who took over as chairman, Securities and Exchange Board of India (Sebi), on March 1 met capital market participants, lawyers and proxy advisory firms for the first time on Monday. The agenda was to listen to the issues faced by the industry.
/goo.gl/gf0ZH4

India’s Wheat Imports Seen Remaining Near Decade High, ITC Says
by Pratik Parija – Bloomberg
World’s No. 2 grower needs to replenish drought-hit stockpiles; Wheat production may total 96 million tons in 2016-17
India’s wheat imports are likely to remain near the highest in a decade as the world’s second-biggest producer seeks to replenish stockpiles slashed by El Nino-induced drought, according to one of the nation’s largest buyers.
/goo.gl/8ry3lK

Initial public offerings in Britain hit five-year low ahead of Brexit
By Anjuli Davies – Reuters
Initial public offerings (IPOs) by companies based in Britain have raised $1.53 billion so far in 2017, a 28 percent decline on last year and the lowest year-to-date total since 2012 as Britain prepares to leave the EU, Thomson Reuters data shows.
/goo.gl/fOdQJ4

Brexit

German government worried a ‘hard Brexit’ would cause market turbulence: report
Reuters
The German Finance Ministry is worried there will be turbulence on the financial markets if there is a ‘hard Brexit’, a German newspaper reported on Monday – two days before Britain triggers divorce proceedings with the European Union.
reut.rs/2oajUK3

Lloyd’s of London to choose Brussels or Luxembourg as EU hub-sources
Carolyn Cohn – Reuters
Lloyd’s of London, the world’s largest speciality insurance market, will this week pick Brussels or Luxembourg for its planned European Union subsidiary, after Dublin had been an early favourite, sources say.
reut.rs/2nb1ZSw

Too many in Europe still think Brexit can be stopped. We must show them we are serious
William Hague – Telegraph
Spending the last few days in Germany, I have found people here puzzled, offended, and feeling slightly bereft by the prospect of Britain’s exit from the EU. They consider they are losing the one other major country that has a strong sense of financial and economic discipline, and they are right.
/goo.gl/7xUM9M

US bankers hatch two-stage Brexit plan for City; Executives seek to win time to decide how many jobs to shift out of London
by: Martin Arnold in Davos and Ben McLannahan in New York – FT
Senior US bankers are privately drawing up contingency plans for Brexit that would give them more time to decide how many jobs to move out of London, in contrast with the industry’s public rhetoric about mass relocation.
/goo.gl/hu616n

The Great Brexit Haggle
By Marcus Ashworth – Bloomberg
Brace yourselves. Tomorrow’s activation of Article 50 will trigger an avalanche of detail from both Britain and the European Union on how talks will develop.
/goo.gl/5V59YB

Miscellaneous

‘Fearless Girl’ Statue to Stay in Financial District (for Now)
Liam Stack – NY Times
“Fearless Girl,” the wildly popular statue that has spent the last few weeks staring down the Financial District’s well-known “Charging Bull,” has received a new lease on life. Originally scheduled to be removed next week, it will now remain in place until early 2018, officials said on Monday.
nyti.ms/2oalGuI

5 Things You Need to Know About Systemic Risk Management
by New York Institute Of Finance
Systemic risk is the possibility an entire market or market segment will collapse from any event or problem traced back to the firm level. Such a threat can arise from a single or multiple distinct events (either simultaneous or closely following each other). The failure of a financial intermediary is a prime example of an event that poses a systemic risk.
bit.ly/2ncw9nO

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About Author

Bergstrom is chief information officer of John J. Lothian & Co. He edits MarketsWiki and JLN Options.