Exchange Sector Review - Week ending July 30th, 2010
FMX | Connect – www.fmxconnect.com - (Reported 7/30/2010)
This week:
The sector was up 200 bps, underperforming global equities by 100 bps. Interdealer brokers were up 100 bps. YTD the sector is underperforming global equities by 449 bps.
Traded volumes are tracking weak in July across global exchanges.
CESR called for a pan-European consolidated tape for equities and further regulation for alternative trading facilities. The proposed rules would subject ECNs to the same rules as exchanges and would require banks internal crossing networks to report trade data (and even register as ECNs if they trade “significant” volumes). The rules also aim to reduce market data costs in Europe (ten times higher than in the US) by unbundling pre and post-trade data.
Chi-X Japan started operating Chi-X’s first Asian platform yesterday. Trading started with only five highly liquid stocks and will be expanded to all Nikkei 225 constituents in the coming weeks and to 800 stocks or 95% of TSE’s market capitalization by September 2010.Chi-X Japan has a continues matching model with maker/taker pricing with trades cleared through the Japan Securities Clearing Corporation. The platform received a “strong response” from brokers according Chi-X director Joseph Meyer.
BME announced that it plans to overhaul its trading system as the exchange prepares for the increased competition that changes in Spain’s clearinghouse (Iberclear) rules will bring about. The CNMV will eliminate the requirement to have a clearing ID instruction issued after an executed trade, forcing Iberclear to extend IDs to MTFs (which now have to put their trades through SIBE’s closing cross). BME plans to reduce latency to a “sub-millisecond” level, with implementation expected by the end of 2011.
CME’s CEO Craig Donohue commented that in spite of the Dodd-Frank Act’s requirement to trade OTC derivatives on exchanges or “swap execution facilities” (SEFs), swap dealers and interdealer brokers would still be able to operate their own SEFs, allowing them “to continue the business model and market structure which they historically had” as “they want to continue doing business in the way they have been.”
BSE: George Soros is in late stage talks to buy Dubai Holding’s 4% stake in the Bombay Stock Exchange for $40 mn, valuing the exchange at $1 bn. Meanwhile, the National Stock Exchange (NSE) of India and LSE signed a deal to explore the cross-listing of FTSE 100 and Nifty-50 index contracts.
The following companies reported quarterly earnings:
-CME $4.1 +23% Y/Y
-DB1 €0.86 -2% Y/Y
-TMX C$0.64 +2% Y/Y
-BME €0.58 +2% Y/Y
-OSE JPY16.4K +203% Y/Y (including Jasdaq results)
-DFM AED0.01 -57% Y/Y
Next week:
The following companies will report quarterly earnings:
-Monday, August 2: SGX, GFI, TLPR
-Tuesday, August 3: NYX
-Wednesday, August 4: ICE
-Thursday, August 5: CBOE, MF
Source: ERDESK
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