Exchange Sector Review - Week ending July 16th, 2010
FMX | Connect – www.fmxconnect.com - (Reported 7/16/2010)
This week:
The sector was up 100 bps, underperforming global equities by 100 bps. Interdealer brokers were down -200 bps. YTD the sector is underperforming global equities by 846 bps.
The US Senate passed yesterday the financial regulation reform bill in a 60-39 vote. The final bill eliminates the $19 bn tax for large financial institutions, replacing it with a increase in deposit insurance fees for large banks and ending the TARP program three months earlier. The bill waters down Sen. Lincoln’s proposals, allowing banks to engage in proprietary trading within separately capitalized subsidiaries and engage in derivatives trading to hedge risks and make markets. Swaps remaining within a bank’s balance sheet will have to be cleared through a CCP. The bill will be sent to President Obama for signing next week (see page 7).
Five Chicago based high frequency trading firms (Getco, DRW, Infinium, Chicago Trading and Nico Trading) launched the Eris Exchange, an electronic exchange for swap look-alike futures contracts which will be cleared via CME’s Clearport. The contracts will fall under current CFTC regulations (which already approved them) and seek to benefit from the financial reform aimed at bringing OTC swaps onto regulated exchanges (see page 8).
NYX: NYSE Euronext London received FSA approval to list international companies wishing to list in London. The platform will compete with LSE’s International Order Book.
NYX sold a “significant minority ownership stake” in NYSE Liffe US to Citadel, DRW, GETCO, Goldman Sachs, Morgan Stanley and UBS.
The following companies reported quarterly earnings:
-BURSA MYR0.052 -19% Y/Y
-SCHW $0.17 -6% Y/Y
Next week:
-The financial regulation reform bill will be sent to Pres. Obama for signing
The following companies will report quarterly earnings:
-Monday, July 19: DFM
-Tuesday, July 20: AMTD
-Wednesday, July 21: BLK
-Thursday, July 22: BMV, JNS, FI, TRAD, ETFC
-Friday, July 23: TROW
Source: ERDESK
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