To find an international brokerdealer to help you invest in this huge new IPO, click here.

China National Nuclear Power Corp., one of the top two state nuclear-power giants, will raise as much as $2.16 billion in what is set to be the country’s largest domestic initial public offering in five years.

CNNPC plans to sell up to 3.89 billion new shares, or a quarter of its total, in the sale, according to its IPO prospectus, filed to the Shanghai Stock Exchange on Monday. The offering’s expected launch date is June 2.

The share float is poised to be the largest in the domestic market since China Everbright Bank Co. raised $2.6 billion in Shanghai in August 2010, according to data provided by Dealogic.

China National Nuclear Group holds a 97% stake in CNNPC. About 40% of China’s total nuclear energy is generated by operators controlled by CNNPC. Excluding issuance-related fees, the firm will raise 13.4 billion yuan ($2.16 billion), according to the prospectus. CNNPC will allocate 4.18 billion yuan of the raised capital to replenish its holdings of cash, and will invest the rest in the construction of projects in Fujian, Zhejiang, Hainan and Jiangsu provinces. Citic Securities, UBS AG and China Securities are the underwriters for the deal.

To continue reading about this explosive new IPO about to hit the markets, click here.

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To continue reading about the international fraud scheme, Depalo’s charges, click here

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Vikram Chopra spent the past three years building an online furniture-shopping site for Indian consumers that was funded mainly by annual capital injections from a German technology incubator.

But during the past few months, investor interest in the site, FabFurnish.com, has soared, said the 32-year-old entrepreneur, who is based in the New Delhi suburb of Gurgaon. Several global venture-capital firms and hedge funds have said they are interested in investing, and Mr. Chopra is now considering another round of funding that would exceed the $20 million raised so far—even though he doesn’t expect FabFurnish to be profitable for another two years and doesn’t yet need the cash.

“A few years ago, everybody wanted to see profitability upfront,” said Mr. Chopra. “Today, it is more like how much money you need to curb the competition [and] kill everyone else.”

Global money is flooding into Indian startups as investors search for a successor to Alibaba Group Holding Ltd., the Chinese e-commerce company that raised a record $25 billion in its initial public offering last year.

To read the entire article from the Wall Street Journal, click here.

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Houlihan Lokey Inc., known for advising companies on midsize mergers and acquisitions and big bankruptcies, is gearing up for a deal of its own.

The firm is planning for an initial public offering of stock this year, according to people familiar with the matter, which would make it the latest independent investment bank to cash in on increasing client and investor demand. A Houlihan IPO could raise more than $200 million, the people said. Based on valuations of similar firms, Houlihan could be worth more than $1.5 billion.

The firm, founded in 1972, has been investigating a possible IPO since last year, and recently decided to move forward with one, the people said. Houlihan is discussing the plan with banks interested in arranging the deal, including Goldman Sachs Group Inc. and Bank of America Corp., though any share sale isn’t expected until the second half of the year, the people added.

To read the entire article on the Wall Street Journal’s website, click here.

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The private-equity-firm J.C. Flowers & Co has worked continuously to find ways that allow that allows the company to work on client deals and recently secured a brokerdealer license for the company.

Private-equity-firm J.C. Flowers & Co is eyeing opportunities in mergers and acquisitions advisory work, securing U.S. regulatory approval that allows the company to work on client deals.

The firm, founded by former Goldman Sachs Group Inc., M&A banker J. Christopher Flowers in 1998, has registered an entity as a broker dealer with the Financial Industry Regulatory Authority.

The recently-secured broker dealer license will allow Mr. Flowers and other executives at the firm to perform advisory work for their clients on an “ad-hoc” basis, according to a person familiar with the matter. The move allows executives to advise clients at their request and does not represent a push into a new business line, two people familiar with the matter said.

The new broker dealer, J.C. Flowers Securities Co. LLC, is authorized to work on investment advisory services and private placements, according to Finra documents. James Christopher Flowers is listed as the owner of 75% or more of the firm.

J.C. Flowers Securities Co. will likely work on mandates that J.C. Flowers & Co., the buyout arm, would not invest in, thereby mitigating potential conflicts of interest, one of the people added.

Since starting J.C. Flowers & Co. in the late 1990s, Flowers has at times been asked to look at potential deals by clients, perform due diligence and provide advice, said one of the people. This move formalizes that work.

The former Goldman Sachs partner spent two decades at the U.S. bank, where he started working on M&A in 1979.

At the height of the financial crisis in 2008, Mr. Flowers helped to advise Bank of America on its purchase of Merrill Lynch. Ken Lewis, then-chairman and chief executive of Bank of America, said at the time that Mr. Flowers, who had invested heavily in the financial services industry and considered a potential joint bid for Lehman Brothers, “had looked at the marks very comprehensively, so this allowed us to have him and his team as an adviser, and just update the information they had”.

The decision to pursue broker dealer status comes at the end of a strong year for M&A, with the global deal volume surpassing $3 trillion for the first time since 2007, according to Dealogic.

But M&A advisory work has at times proved rocky terrain for private-equity firms to navigate because of the potential for conflicts of interests.

In October, Blackstone announced plans to spin off its financial advisory business, merging it with ex-Morgan Stanley banker Paul Taubman’s independent firm PJT Partners. At the time, the alternatives giant said it had not been able to grow the advisory unit “out of concern for potential conflicts”.

For the original story from The Wall Street Journal, click here.

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For broker-dealers, investment bankers, and those following the investment strategies of private equity and venture capital firms, this is one of the better plain-speak summaries profiling the current climate of investing in private companies. The recent outsized valuations during 2014 have caused greybeard investors to scratch their heads…as the outsized pre-IPO valuations are counter-intuitive to traditional investment analysis of private companies, particularly given the assortment of “lower-than-last-private round” post IPO valuations that these same companies are being given in the public marketplace.

For private companies that wish to network with deep-pocketed angel and/or institutional investors, Brokerdealer.com provides an investor forum that connects start-up entrepreneurs with those who can see the forest through the trees.

Below please find excerpts of Liam Denning’s reporting..

Buying a stock, with all its attendant filings, analyst coverage and forecasts, still can be a gamble. So imagine getting excited about one isolated price signal on a private company with all the disclosure of the Air Force’s Area 51.

Yet that is what is setting pulses racing as 2015 dawns. Xiaomi, a closely held Chinese smartphone maker, recently raised $1.1 billion at an implied valuation of more than $46 billion. That puts it ahead of Uber Technologies, the unlisted ride-booking application developer that got new funding in December valuing it at $41 billion. Both numbers also are higher than the market capitalizations of roughly three-quarters of the S&P 500’s members.

In theory, such startup valuations matter little to anyone but a relative handful of founders, employees and venture capitalists. The average investor doesn’t get a seat at the table or more than an occasional glimpse of what even is on the table.

In practice, news of such amazing, and seemingly unobtainable, investments stoke bullish sentiment, leaving individual investors potentially vulnerable.
Venture capitalists and other insiders usually do extensive due diligence before committing to the likes of Uber. But their basis for valuation differs from the approach of mainstream investors buying stocks, with venture funds also considering exit timelines, the cash needs of a startup to keep expanding and maintaining incentives for management and owners as equity stakes get parceled out. They also can, of course, just get things wrong.

Ordinary investors also must consider the wider context. In a world thirsting for yield amid ultralow interest rates, money has sought riskier corners of the market. Almost $24 billion of new commitments flowed to U.S. venture funds in the first nine months of 2014, according to the latest data from Thomson Reuters and the National Venture Capital Association. That is more than in each of the preceding five years in their entirety and sets up 2014 to have been the biggest year for new venture money since before the financial crisis.

This raises the risk of dollars being deployed into questionable businesses, which then eventually find their way into the wider market via initial public offerings, which are priced off the back of those high startup valuations.

For the entire WSJ story, please click here.

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An instant-messaging software company that has drawn investments from Goldman Sachs Group Inc. and other big banks signed a deal to buy a chat business from a potential rival.

Symphony Communication Services LLC acquired an arm of Markit Ltd., a financial-data firm that went public earlier this year, the companies said.

The purchase, Symphony’s first since a group of 14 banks and money managers helped start it in October, underlines how Wall Street has quickly coalesced around the Silicon Valley startup as a solution to one of the industry’s most pressing technology challenges: finding a way for employees to communicate with one another, instantly and securely.

It also represents an exit for Markit, which a year ago had launched its own messaging initiative for bankers and traders. The sale isn’t expected to have a material effect on Markit’s results. Fewer than 20 Markit employees are relocating to Symphony as part of the sale of the unit, known as Collaboration Services, a person familiar with the deal said. Terms aren’t expected to be disclosed when the deal is formally announced Tuesday.

David Gurle, Symphony’s chief executive, said in an interview that the company had considered building its own directory before reaching out to Markit in recent weeks to discuss a potential deal. In buying Markit’s business, Mr. Gurle said Symphony probably saved 18 months of development time. “They had a capability we would have ordinarily had to build ourselves,” Mr. Gurle said.

The transaction includes the software that powers Markit’s directory service, which functions as a centralized “phone book” for financial firms that can be customized to meet compliance rules.

Symphony’s emergence may help loosen Bloomberg LP’s grip on the securities industry. The financial-data company’s chat services remain ubiquitous on trading floors. But the price of a Bloomberg terminal, about $20,000 a year, has grated on some finance executives.

If Symphony’s platform spreads quickly through Wall Street, bank executives have said, it could pressure Bloomberg to relent. A Bloomberg spokesman didn’t immediately respond to a request for comment. Bloomberg’s news service competes with Dow Jones & Co., publisher of The Wall Street Journal.

On Monday, Mr. Gurle said the messaging platform is still on track to launch in July.

Led by Goldman, a group of financial firms invested $66 million in Symphony. The group, in turn, acquired Perzo Inc., a Palo Alto, Calif., company founded in 2012 by Mr. Gurle. Goldman, which led the investment among the financial firms, contributed its own internal messaging developments to the venture.

Founded more than a decade ago, Markit had drawn investments from financial firms such as J.P. Morgan Chase & Co., Bank of America Corp. , Deutsche Bank AG and Goldman. All four of those banks were among the firms that have backed Symphony.

Markit sought to allow financial firms’ in-house messaging platforms to communicate with one another, he said. Symphony and its backers are betting that financial-services firms need a better system than they could develop on their own.

To read the complete coverage, please visit the WSJ via this link.

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A hedge-fund manager says an unusual culprit contributed to his firm’s demise: high-frequency traders.

Rinehart Capital Partners LLC, which had been backed by hedge-fund veteran Lee Ainslie and specialized in emerging-markets stock-picking, is closing, according to a letter viewed by The Wall Street Journal.

In the letter, Rinehart founder Andrew Cunagin aligned himself with those who have been critical of the rise of fast-moving traders.

“This is a circus market rigged by HFT and other algorithmic traders who prey on the rational behavior of warm-blooded investors,” Mr. Cunagin wrote, referring to the high-speed traders who have attracted wide attention this year for the alleged advantages they hold over more traditional investors.

Mr. Cunagin, 43, said in an interview from Cape Town, South Africa, where he was scouting potential future investments, that there was “clear evidence of penetration” by high-frequency traders in the stock markets of South Korea and Mexico, among other areas.

“You can see the evidence of dark pool trading…you’ll see half the day’s trading volume occur in the last seconds of trading,” he said. “There’s just evidence that this is not a level playing field.”

Rinehart, based in Nashville, Tenn., had less than $100 million under management this summer. It joins other stock-picking hedge funds that have thrown in the towel in recent months, such as Emrys Partners LP, managed by financial-crisis star Steve Eisman, and an effort from private-equity giant KKR KKR +0.09% KKR & Co. L.P. 

Many hedge-fund managers, particularly those that bet on global economic trends, have criticized stock prices they believe to be out of whack and a lack of trading volatility, which they say doesn’t suit their style. Stock prices have risen for five consecutive years, helped by low interest rates and central-bank stimulus programs.

Continue reading the rest of the story at WSJ.com

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According to the proposal, which is “expected to be submitted imminently” to the U.S. Securities and Exchange Commission in connection with IEX’s plan to move from its current status as an ECN (electronic communications network) and towards becoming a full-blown stock exchange, broker-dealer orders would receive priority in the IEX order book, meaning those orders would jump to the top of the order book if the price to buy or sell a stock was at least equal to the prevailing orders entered by non broker-dealers aka buy-side investors that include high-frequency trading firms, mutual fund firms and retail investors. In addition to brokerdealer orders being provided priority over other same-priced orders sent to the platform by non BD’s, broker-dealers would be able to execute commission-free.

In a move that is purposefully intended to disrupt the current market structure status quo and challenge the viability of loosely-regulated and so-called “dark pools,” in which pricing transparency is purposefully hidden so as to mitigate gaming of orders submitted by large institutions, IEX is embracing an approach that has become widely-embraced in Canada’s equity marketplace, whose primary equities trading is administered by TMX Group, that country’s largest stock-exchange provider. Noted TMX Group CEO Thomas Kloet, “The virtue of having more bids and asks consolidated in a few order books, rather than scattered across dozens of venues [such as what takes place in US markets) makes markets more transparent and provides for greater price efficiency.”

The IEX proposal comes close on the heels of recent events in which dark-pool operators have been accused by regulators and law enforcement agencies of various charges, including accusations filed against Barclays PLC by New York State Attorney General which alleges Barclay’s misleads its clients about the way its dark pool favors high-tech “high frequency traders.” Barclay’s system “Barclays LX” was the industry’s largest dark pool used by a broad universe of investors and competing banks, until those charges were filed last month. Since that time, Barclay’s has supposedly experienced a large exodus of clients using their platform, presumably because of concerns they too will be on the receiving end of New York AG subpoenas.

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Investors are piling into the shares of small, risky companies at the fastest clip on record, in search of investments that promise a chance of outsize returns.

The investors are buying up so-called penny stocks—shares of mostly tiny companies that aren’t listed on major U.S. exchanges—at a pace that far eclipses the tech boom of the late 1990s. Those include firms that focus on areas from medical marijuana and biotechnology to fuel-cell development and precious-metals mining—industries that are perceived by some investors as carrying strong growth potential.

Average monthly trading volume at OTC Markets Group Inc., OTCM 0.00% which handles trading in shares that aren’t listed on the New York Stock Exchange or Nasdaq Stock Market, NDAQ +0.25% has risen 40% this year in dollar terms from a year ago, to a record $23.5 billion.

The renewed interest in a market that used to be known as the pink sheets—because of the colored pieces of paper once used to record prices for unlisted stocks—shows investors are ramping up risk in a bid to boost returns as U.S. stock indexes are hovering near highs and stock valuations have risen above historical norms.

For the complete story from the Wall Street Journal, please click here

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