Bahrain Stock Exchange Embraces NASDAQ Trading Engine

Posted on by admin

Brokerdealer.com blog update courtesy of extract from Traders Magazine 07.23 story by John D’Antona

tradersmagazine

A Middle East stock exchange is tapping the knowledge of one of the Northeast’s bourses.

The Bahrain Bourse and NASDAQ OMX have joined forces with the former activating its newest trading engine, which is powered by NASDAQ OMX’s X-stream trading platform. The project went live on Monday, July 14, providing Bahrain Bourse with a multi-asset trading platform.

“Replacing our trading platform is a milestone in the history of the Kingdom of Bahrain’s capital market, and is one of the key projects of the Bourse’s strategy that was adopted in 2011 to develop all work aspects at Bahrain Bourse,” said The Shaikh Khalifa bin Ebrahim Al-Khalifa, chief executive at the Bahrain Bourse.

Bahrain’s new platform will enable it to provide more and advanced trading options for brokerdealers and investors and a variety of market participants, as well as create innovative products and services to match international demand. In addition to the new X-stream technology, the Middle East exchange will also continue to leverage the existing CSD technologies that have been provided and supported by NASDAQ OMX since 2000.

NASDAQ OMX’s exchange technology, including trading, clearing, CSD and market surveillance systems, is in operation in over 100 marketplaces across USA, Europe, Asia, Australia, Africa and Middle East.

The Bahrain Bourse was established as a shareholding company in 2010 to replace the Bahrain Stock Exchange that was established in 1987. There are 50 companies listed on the exchange, two mutual funds, and nine bonds/Islamic Sukuk. The three indices tracking the market’s performance are the Bahrain All Share Index, the Esterad Index (which consists of a basket of selected local-publicly listed companies), and the Dow Jones Bahrain Index.

Since its establishment, BHB has joined several regional and international organizations such as World Federation of Exchanges, Arab Federation of Exchanges, Federation of Euro-Asian Stock Exchanges and the Africa & Middle East Depositories Association.

Will BrokerDealers Get Busted For Promoting Maker-Taker Rebate Schemes? Finra Joins Investigation of Payment-For-Order Flow

Posted on by admin

BrokerDealer.com blog reporting courtesy of this a.m. story from securities industry blog MarketsMuse

Bowing to increasing pressure from regulators, law makers and law enforcement officials, Finra, the securities industry “watchdog” has launched its own probe into how retail brokers route customer orders to exchanges, according to recent reporting by the Wall Street Journal’s Scott Patterson.  In particular, through the use of “sweep letters” targeting various broker-dealers, Finra is purportedly focused on whether rebates associated with schemes that brokers receive when directing their orders to specific venues is a violation of conflict of interest rules, given that customers presume they are receiving best price execution when in fact, they often do not.

MarketsMuse, the securities industry blog that has long reported about payment-for-order-flow and the unsavory practice in which customer orders are “sold” by custodians and prime brokers to “preferenced liquidity providers,” who then trade against those customers and profit from price aberrations between multiple exchange venues and dark pools, takes pride in pioneering the coverage of this topic.

Now that main stream media journalists are beginning to “get it”,  a growing number of those following this story hope that WSJ’s Patterson and other journalists will shine light on the even more unsavory practice in which these same brokers imposing egregious fees on customers who wish to “step out” aka “trade away” and direct their orders to agency-only execution firms, whose role as agent is to objectively canvass the assortment of marketplaces and market-makers in order to secure truly better price executions for their institutional and investment advisory clients.

In a further sign that the current market structure could be cracking, one that has morphed away from a model based on centralization and transparency to disjointed fragmentation [a shift that has ironically been continuously supported Finra-sponsored government lobbies on behalf of that "regulatory authority's" senior constituents], Jeffrey Sprecher, the CEO of IntercontinentalExchange and owner of the New York Stock Exchange  appeared before a U.S. Senate hearing yesterday and called for the end of the now scrutinized fee and rebate system known as “maker-taker.” In what would seem like a walk-back given the NYSE’s own rebate scheme for brokerdealers as a means to attract order flow to that venue, Sprecher stated “Maker-Taker adds to the complexity and the appearance of conflicts of interest.”

BrokerDealer Blog: All Investment Categories Booming: Is This a Bubble?

Posted on by admin

When headline stories such as the one that appeared on the front page of today’s New York Times (“From Stocks To Farmland, All’s Booming, or Bubbling”)

Courtesy of the NY Times

Courtesy of the NY Times

, broker-dealers, investment brokers, global investment bankers and others in the business of guiding investors and entrepreneurs across various asset classes are right to become concerned about a potential investing bubble. Particularly those who have seen similar peaks (and troughs) over at least the past 15 years.

Per the NY Times article:

In Spain, where there was a debt crisis just two years ago, investors are so eager to buy the government’s bonds that they recently accepted the lowest interest rates since 1789.

In New York, the Art Deco office tower at One Wall Street sold in May for $585 million, only three months after the going wisdom in the real estate industry was that it would sell for more like $466 million, the estimate in one industry tip sheet.

In France, a cable-television company called Numericable was recently able to borrow $11 billion, the largest junk bond deal on record — and despite the risk usually associated with junk bonds, the interest rate was a low 4.875 percent.

Welcome to the Everything Boom — and, quite possibly, the Everything Bubble. Around the world, nearly every asset class is expensive by historical standards. Stocks and bonds; emerging markets and advanced economies; urban office towers and Iowa farmland; you name it, and it is trading at prices that are high by historical standards relative to fundamentals. The inverse of that is relatively low returns for investors.

But frustrating as the situation can be for investors hoping for better returns, the bigger question for the global economy is what happens next. How long will this low-return environment last? And what risks are being created that might be realized only if and when the Everything Boom ends?

Safe assets, like United States Treasury bonds, have been offering investors paltry returns for years, ever since the global financial crisis. What has changed in the last two years is that risky assets, like stocks, junk bonds, real estate and emerging market bonds, have also joined the party.

Want to buy shares of American companies? At the current level of the Standard & Poor’s 500 index, every dollar invested in stocks buys you about 5.5 cents of corporate earnings, down from 7.4 cents two years ago — and lower than just before the global financial crisis in 2007-8.

 

Markit Heads to IPO Market, Wall Street BrokerDealers All Smiles

Posted on by admin

wsj logoBelow BrokerDealer.com blog news extract courtesy of the Wall St. Journal.

One of the biggest financial service industry IPOs of the season (as well as any other industry initial public offering of the season) is scheduled to launch on Thursday, and, as noted by the WSJ, Wall Street’s biggest banks are in line for a payday of up to a billion dollars from Markit Ltd.’s share float, as they cash out part of their stakes in the financial-data firm and divvy up the underwriting fees.

The 12 financial institutions that rank among the London company’s top shareholders expect to raise as much as $1.02 billion selling shares Wednesday at as much as $25 apiece, a rare bit of good news at a time of sluggish revenue, soft trading activity and regulatory scrutiny. The largest sellers are expected to be Bank of America Corp. BAC 0.00% , Citigroup Inc. C +0.29% and Deutsche Bank AG DBK.XE +0.49% , with Bank of America selling seven million shares to raise up to $176 million, according to filings.

The firm’s largest holders—an employee-benefits trust, private-equity firm General Atlantic and Singapore state-owned investment company Temasek Holdings Pte Ltd.—aren’t selling their shares, according to regulatory filings. The Canada Pension Plan Investment Board is considering buying $450 million worth of the shares, the filings said.

The offering, which begins trading Thursday, could give the financial-information company a $4.5 billion market value, highlighting Markit’s evolution in the years since the financial crisis and investors’ thirst for data on derivatives, bonds, loans and foreign-exchange markets.

“Markit started with a great idea, which was to create a central pricing service in what were at the time very rapidly growing credit markets,” said Mark Beeston, a former board member and founder of financial-technology venture-capital firm Illuminate Financial Management.

At the same time, the banks that have backed Markit since its founding more than a decade ago have been jockeying for position in selling the offering to the public. The deal is expected to raise as much as $1.1 billion altogether.

The company and the banks are discussing a fee pool of about 4% on the IPO, which would amount to as much as $45 million if the deal is priced at the top of the range, people familiar with the matter said.

The banks skirmished over their roles as the IPO was in its planning stages, according to some of the people familiar with the matter.

For the full story, please click here to visit the WSJ.

A Chinese Menu of Deals Drives Venture Capital Guru East; BrokerDealer.com spotlight

Posted on by admin

Investing in China and sourcing private equity, venture capital and deal opportunities is getting better every day.

BrokerDealer.com blog extract is courtesy of New York Times Dealbook

SHANGHAI – James W. Breyer, the venture capitalist who made a fortune with an early bet on Facebook, is putting some of his winnings to work in China, partnering with Beijing-based venture capital firm to invest in Chinese technology start-ups.

IDG Capital Partners said on Wednesday that Mr. Breyer, a longtime partner at Accel Partners in Palo Alto, Calif., would advise and invest alongside a $586 million IDG fund that closed June 3. The fund is expected to make early stage investments in Chinese technology, media and telecommunication companies.

The announcement comes as interest soars in Chinese technology companies after two years of frenzied deal-making, much of it involving China’s Internet giants: Alibaba, Baidu and Tencent. Those three companies alone have spent more than $10 billion buying up start-ups and rivals during the last few years.

And with other technology highfliers here, including JD.com, the Chinese e-commerce company that recently raised $1.78 billion in its New York public listing, China has rapidly become a prime destination for the world’s biggest venture capital and private equity firms. Among the biggest and most active in China are Sequoia Capital, Qiming Ventures, SAIF Partners, IDG Capital Partners and Northern Light Venture Capital.