European BrokerDealers Band Together For Equity Trading Platform

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Traders-at-the-DAX-index--007Brokerdealer.com blog update courtesy of Will Hadfield of Bloomberg.

Six banks are developing a new not-for-profit platform to trade European equities called Plato Partnership Ltd.

Barclays Plc (BARC), Citigroup Inc. (C), Deutsche Bank AG (DBK), JPMorgan Chase & Co. (JPM), Goldman Sachs Group Inc. and Morgan Stanley (MS) plan to use the venue to reduce trading costs, increase transparency and simplify markets, according to a statement.

“The platform would seek to ensure market integrity and the protection of orders with the goal of ensuring fairness for all participants,” the consortium said in the statement.

The banks intend to set up the trading venue under a trust, or similar structure, to prevent them from reneging on the principles at a later date. They will spend any profit from the platform on academic research designed to improve Europe’s market structure.

Deutsche Asset & Wealth Management and Norges Bank Investment Management have also joined Plato Partnership.

“We feel that the time is right to launch this proposition, which would seek to enhance the market by delivering additional liquidity and functionality to market participants,” Stephen McGoldrick, Plato’s project director, said.

Brokerdealer.com can provide you with the ability to work with the above mentioned brokerdealers on the new equity trading platform they have created through one of Brokerdealer.com’s many databases.

For the original copy of Hadfield’s article from Bloomberg, click here

 

 

BrokerDealers Gear Up For More Merger-Arb Deals

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BrokerDealer.com blog update courtesy of FINAlternatives and originally published by Bloomberg LP

FinAlternatives LogoWith the economy fully recovered from the financial crisis, Brokerdealers, involved in merger-arbitrage funds, are taking higher risks that are giving a much higher reward.

Merger-arbitrage traders didn’t have enough risk last year. This year, they got more than their share — and it’s not going away.

Companies announced $2.8 trillion of acquisitions, making 2014 the busiest year since before the financial crisis. Unprecedented amounts of money were spent in some industries, such as pharmaceuticals, and the transactions skewed larger than at any other time this century, according to data compiled by Bloomberg. The slew of deals gave merger-arbitrage traders plenty to wager on, after last year’s scarcity of profit opportunities.

The explosion of megamergers brought volatility back to the investing strategy. The deals have been fraught with challenges, from regulatory scrutiny to the plummeting price of oil and the government’s attempt to deter tax inversions. Betting on them didn’t always pay off. More than $100 billion of potential takeovers unexpectedly blew up, like when drugmaker AbbVie Inc. called off its $55 billion purchase of Shire Plc. That burned merger-arbitrage funds, some of which will end the year at a loss even as stocks around the world surge.

“Drought conditions turned into basically flood conditions this year,” Louis Meyer, a New York-based event-driven analyst for Oscar Gruss & Son Inc., said in a phone interview. “Volatility is good, but it can be a double-edged sword. The positive aspect is you do have deals and the trend seems to be continuing. On the other hand, you’ve had real risk emerge and portfolio managers can no longer work on cruise control.”

For the original article from FinAlternative, click here.

 

Bitcoin and Brokerdealers

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Broker Dealer.com blog update courtesy of extract from CoinDesk

Bitcoin is a form of currency that is tied directly to the Internet and is the world’s first free market, decentralized global currency. It is operated through an open-source software so there is no central control unlike the US dollar or Euro. Similarly to gold, only 21,000,000 Bitcoins will ever be created so the value of the Bitcoin continues to rise as time goes on.Bitcoin Bitcoins can be exchanged for goods and services as well as currencies such as the US dollar and the Euro. As long as people trust that Bitcoin has value, people will continue to invest in it.

Bitcoin is still very small by market capitalization when compared to the traditional markets, and the need for more liquidity within exchanges is an ongoing issue in the industry. However, a number of startups are looking to attract the traditional investment sector to cryptocurrencies.

SecondMarket was expected to launch an institutional bitcoin exchange this year, but it still only offers the Bitcoin Investment Trust, its managed investment vehicle. Other companies looking to cater to larger investors include exchanges itBit and Coinsetter, which are both based in the finance hub of New York City.

Mirror, formally known as Vaurum, is an institutional-grade exchange platform for bitcoin investors.  The platform’s exchange is currently invitation-only but customers can sign up to request access. “We’re currently onboarding investors, market makers, over-the-counter (OTC) traders and bitcoin businesses,” said Bhama. “We evaluate each sign up on a case by case basis and will be sending out invites at an increasing rate as we prepare to open it up publicly.”

Find your own Brokerdealer that will help you understand the Bitcoin market and how to begin collecting your Bitcoins or invest in a platform such as Mirror.

Residential Real-Estate & Commercial Builder IPOs: BrokerDealers and Investors Balancing New Home Builders v. Single-Building

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BrokerDealer.com blog update profiles divergence between IPO opportunities for new home builders v. a new trend among commercial real estate developers raising capital in the initial public offering market for specific projects.

ipoAs best illustrated by 2 side-by-side articles in Nov 19 Wall Street Journal, broker-dealers and investment bankers are cautioning that the door on home builders wanting to good public is closing, as higher mortgage rates and tight mortgage-qualification standards continue to dampen the residential developer IPO space, not to mention in that home-builder stocks have slumped. Given the deluge in the overall U.S. IPO market, residential real estate developers are being pushed into the woodshed, at least for now. The full story on this topic is at the WSJ.

The better news for bankers and Issuers can be found in the nascent stage interest for “single-building” IPOs. Leading the pack is a New York start-up ETRE Financial LLC, which plans to bring this novel structure to the capital markets early next year. The building that will be floated is the State Street Financial Center, the Boston office tower owned by a venture led by Fortis Property Group.

According to reporting by WSJ staffers Eliot Brown and Robbie Whelan, the structure proposed by ETRE is somewhat complex, yet ETRE co-founder Jesse Stein states, “By providing investors with the opportunity to invest in a single asset, you’re actually increasing the opportunity to diversify.”

 

 

 

Virgin America Flies High With IPO; Investors Touched For The Very First Time

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Shares of the Discount Airline Close at $30, Up 30% from the IPO Price

BrokerDealer.com blog update courtesy of extract from WSJ. A complete directory of brokerdealers who participated in underwriting the airline industry’s first initial public offering in quite a while can be found via the brokerdealer.com database.

Virgin America Inc. took off Friday, as shares of the discount airline rose more than 30% in their market debut.

Virgin America Fly Girls PremiereThe stock, which began trading on the Nasdaq Stock Market under the symbol “VA,” closed at $30, giving the company a market value of about $1.3 billion. Earlier Friday, shares opened at $27 and hit a high of $31.19. Virgin America’s initial public offering of about 13.3 million shares was priced at $23 each, at the higher end of the carrier’s initial range of $21 to $24 a share and valuing the Burlingame, Calif., company at $994 million. The first-day pop exceeds the average 13% gain IPOs have notched so far this year according to IPO ETF manager Renaissance Capital.

Virgin America currently has a market capitalization of $1.3 billion.

Following the IPO, Virgin America expects to have about 43.2 million shares in total, leaving Cyrus Capital Partners LP and Virgin Group Ltd. as the company’s largest shareholders.

PAR Investment Partners LP has agreed separately to purchase 2.3 million shares for about 96% of the IPO price, or about $50 million, from the controlling shareholders in a private placement. The IPO is expected to raise about $220 million in net proceeds, which Virgin America said it plans to use for working capital, sales and marketing, and capital expenditures. Selling shareholders won’t receive any proceeds.

For the full story from WSJ, please click here