First Read
Hits & Takes
John Lothian & JLN Staff
In a move sure to generate ‘discussion’ among Chicago’s prop trading community, CME and Google Cloud announced a plan to build a new private global cloud and colocation facility in Illinois. The Trade has its take on it in this story.
A small observation here: “Glitch” seems to be doing a lot of work in this headline: “Berkshire Stock Glitch at NYSE Cost Interactive Brokers $48 Million.”
Interactive Brokers is also in the news because they are planning to launch a binary prediction market in early July with economy and climate-based contracts. Evidently economic reports are definitely not political.
In other news, in a departure from their usual marketing, AARP is sponsoring an event in Atlanta tonight and calling it a Presidential debate. Nike is rumored to be getting in on the action by sponsoring two new styles of limited-edition velcro shoes for the candidates.
The Bulls draft pick, Buzelis, grew up in Willowbrook. The ‘Burbs got game, apparently.
The Wall Street Journal reports that Some Bed Bath & Beyond Board Members Worried Secrets Were Passed to Ryan Cohen Before His $60 Million Gain. $60 million will buy a lot of Egyptian cotton sheets.
Finally, from Insider: Can the stars predict the stock market? Gen Z thinks so. ChatGPT says this is a bad idea, but CNBC may be exploring adding a weekly segment hosted by Madame Marie. – DK
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
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FIA’s six newest member firms were approved last week ahead of its IDX conference in London: Fieldfisher, MBP3 Solutions, Inc., Morrison Foerster, Robinhood Derivatives, S&P Global Commodity Insights, and Two Sigma, the FIA posted on Twitter. ~SR
A report by Oliver Wyman, the City of London Corporation, and the UK Carbon Markets Forum found that the global carbon dioxide removal (CDR) market could reach $100 billion annually between 2030 and 2035 if barriers to scale are addressed. Without intervention, it may only reach 10% of its potential, the report says. CDR projects, which remove and store atmospheric CO2, are increasingly attracting corporate, investor, and developer interest due to their potential to mitigate greenhouse gas emissions. Over $30 billion has been invested globally in anticipation of market growth, with $32 billion already invested in CDR projects. Current demand for CDR credits needs to increase 3-5 times to support the level of investment and meet requirements for achieving net zero. You can download the report HERE. ~SAED
Our most read stories from our previous edition of JLN Options were:
– India’s options trade faces a less lucrative reset from Reuters.
– Renewed Bullishness Expected After Bitcoin, Ether’s $10B Options Expiry on Friday from Coindesk.
– Google and CME to Build New Facility to Move Trading Into Cloud from Bloomberg. ~JB
Subscribe to the JLN Options Newsletter HERE (it’s free).
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Ken Griffin Makes Largest Gift in Chicago Since Departing for Miami
Miranda Davis – Bloomberg
Ken Griffin is making his biggest donation to a Chicago institution since handing out $130 million just as he left the city for Miami two years ago. The billionaire hedge fund founder announced a $10 million gift to Northwestern Medicine to fund research into esophageal diseases, which include esophageal cancer and gastroesophageal reflux. The donation will enable studies into leveraging artificial intelligence and machine learning to expand one of the top programs in the field globally.
/jlne.ws/4bgWyc0
***** A welcome gift. I know someone who has suffered from some of the above. Griffin may have moved to Florida but it seems he still cares for the city he left. ~JB
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Teens lack financial literacy and maths skills for digital economy, OECD report finds; Study highlights gap in rich countries between access to banking products and an understanding of how finance works
Amy Borrett – Financial Times
Teenagers in rich countries lack the financial literacy and maths skills needed to prepare them for the digital economy, according to an OECD report. Despite growing numbers opening bank accounts and showing an interest in cryptocurrencies, the majority of 15-year-olds in the Pisa study, published on Thursday, struggled to understand key financial terms and a fifth found it difficult to calculate percentages.
/jlne.ws/3zlwJKw
***** Do teens have the financial literacy and math skills to operate in any kind of economy? ~SAED
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Do You Believe in Machine Learning? Yes! Get Ready for NBC’s AI-Generated Al Michaels; The legendary sportscaster signs on for a synthetic double at the Summer Olympics in Paris. Could A.I. Cosell be next?
Jason Gay – The Wall Street Journal
Earlier in the week, I chatted about hockey on the phone with Al Michaels. At least I thought it was Al Michaels. It sure sounded like Al, who has a voice smoother than a cream-colored Cadillac. I asked him a bunch of questions about the Stanley Cup, because “Miracle On Ice” Al loves his hockey, and knows more about it than I ever will. (Low bar to clear, I know. I’m trying!) Meanwhile, Asimovian news was on the verge of dropping: Michaels was about to be formally announced as a correspondent for NBC’s Summer Olympic coverage. But not as the real Al. As robot Al. More specifically, as artificial intelligence Al, or “AI Al,” a nickname amusing to technologists and a nightmare for copy editors.
/jlne.ws/45FPSTF
****AI is not just a nightmare for copy editors.~SR
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Wednesday’s Top Three
Our top story Wednesday was Bloomberg’s The Last 72 Hours of Archegos, subtitled “Bill Hwang’s doomed family office is on trial, but it’s Wall Street that looks terrible.” Second was IEX Cloud closure forces fintech clients to seek data alternatives, from Waters Technology, which was free to read yesterday, as our guest editor David Klotz pointed out. Third was Eurex Clearing Joins Second Wave Of ECB Trials on DLT, from Markets Media.
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Lead Stories
Google Strikes Deal With CME as Exchange Moves to Cloud; 10-year partnership allows CME to move data, markets to cloud; Google also makes $1 billion equity investment in CME stock
Katherine Doherty and Molly Schuetz – Bloomberg
CME Group and Alphabet Inc.’s Google struck a deal to help the derivatives exchange operator with its technology needs and a plan to move all of its operations to the cloud. As part of the agreement, Google also made a $1 billion equity investment in a new series of non-voting convertible preferred stock of CME Group, the companies said Thursday in a statement. The 10-year partnership will allow CME to first move its data and clearing services to Google Cloud, then eventually its trading and other markets.
/jlne.ws/4cDCpxT
The FBI’s Star Cooperator May Have Been Running New Scams All Along; When Gery Shalon, mastermind of the infamous JPMorgan hack, flipped, US law enforcement considered it a triumph. But new evidence suggests that while Shalon was working with the FBI, he built a massive new fraud empire in Europe.
Simona Weinglass, Michael Riley, and Jason Leopold – Bloomberg
On Nov. 10, 2015, Preet Bharara, then the US attorney for the Southern District of New York, stepped behind a podium in the lobby of 1 Saint Andrew’s Plaza in Manhattan and made a stunning announcement. Flanked by agents from the FBI and the US Secret Service, he trumpeted the takedown of “one of the largest cyberhacking schemes ever uncovered.” JPMorgan Chase & Co., a pillar of the global financial system, had been hacked the year before by a gang that also infiltrated other marquee financial companies, including Dow Jones & Co. and ETrade Financial Corp. After months of patient investigation, Bharara said, agents had connected those breaches to a uniquely sophisticated criminal organization, the leaders of which were now in custody.
/jlne.ws/4cjb7x2
Robots, Drones and Driverless Tractors Usher In New Age of Farming; Companies offer high-tech ways to make growers more efficient; Deere is selling tractors that can plow fields without drivers
Michael Hirtzer – Bloomberg
Tractors plow the farm fields without drivers, guided by satellites and iPhones. Solar-powered robots tend to plants on the ground like giant outdoor Roombas, while drones fly overhead spraying the crops. It may sound like science fiction – perhaps Uncle Owen’s moisture farm in Star Wars – but it’s actually the future of agriculture in America, and it’s already being deployed in California vineyards and corn fields in Illinois. Automation and artificial intelligence promise to usher in a revolutionary shift for an industry long averse to change.
/jlne.ws/3zeyZ6c
The new money laundering network fuelling the fentanyl crisis; US officials say Chinese organised crime groups are laundering much of the cash accumulated by Mexican drugs cartels
Joe Miller and James Kynge – Financial Times
In January 2021, US Drug Enforcement Administration agents watched a man drop off a large white bag with “Happy Birthday” written on the side at an office complex in Downey, California. It contained $226,000 in cash. Three months later they witnessed the same man leave a Fruity Pebbles cereal box full of almost $60,000 in cash at a house in Temple City, California.
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US drives rebound in global M&A deals; Uptick in big deals offsets dwindling number of acquisitions
Maria Heeter and Ivan Levingston – Financial Times
Global merger and acquisition deals hit $1.5tn in the first half of 2024 as a surge in US takeovers and an uptick in megamergers offset a declining number of acquisitions. The value of deals struck was 22 per cent higher than a year earlier, according to mid-year data compiled by the London Stock Exchange Group, driven by a 70 per cent rise in big deals worth more than $10bn.
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ETF debuts surge as actively managed offerings gain traction; ETFs overseen by fund managers who pick stocks continue to gain ground on index followers
Will Schmitt – Financial Times
New ETFs are hitting the market at a record pace this year, led by securities overseen by fund managers who decide which stocks to include. At least 236 ETFs have launched so far in 2024, including 166 actively managed ETFs, according to Morningstar. There were 155 active and passive ETFs combined at the same time in 2023.
/jlne.ws/3VYQqk5
The great wealth transfer is coming (but are advisers prepared?) Compared with their parents, children often have different expectations when it comes to managing their money
Faith Glasgow – Financial Times
Things may not be so bad for the Generation X and millennial cohorts after all, despite the financial challenges of inaccessible house prices, crippling student debt and job insecurity. For they – or at least some of them – are set to inherit a staggering amount of money from their ageing baby boomer parents over the coming decades. The wealth of the postwar boomer generation has been underpinned by 20th century economic growth, jobs for life and decades of rising property values, and more than £100bn is now inherited and gifted in the UK each year, according to Demos, a think-tank.
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NYSE trading glitch costs Interactive Brokers $48mn; Retail broker covers customers’ Berkshire Hathaway trades after exchange rebuffs compensation claim
Jennifer Hughes – Financial Times
A trading glitch on the New York Stock Exchange earlier this month has cost Interactive Brokers $48mn after its customers tried to pile into Berkshire Hathaway shares following a 99 per cent plunge. The brokerage on Wednesday said it was considering its options “including any claims at law it could assert against NYSE” but said the hit was not material to earnings. Berkshire Hathaway’s class A shares were among several that plummeted unexpectedly on June 3 because of a technical issue in early trade on the NYSE, which is part of Intercontinental Exchange.
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Want to Bet on the CPI or Jobs Report? A Prediction Market Is Coming to This Brokerage; Interactive Brokers is launching yes-or-no contracts on future economic and climate events
Hannah Miao – The Wall Street Journal
Betting on the latest economic report could be as simple as choosing “yes” or “no.”The trading platform Interactive Brokers Group is launching contracts that allow customers to wager on future events related to the economy and climate. The contracts let users take yes-or-no positions on questions such as whether the consumer-price index will rise above a certain number or if the global temperature will reach a specific level.
/jlne.ws/3zhB01z
On Day of Fatal BP Refinery Blast, 3,712 Safety Alarms and One Unsent Email; The company played down worker concerns ahead of a 2022 explosion that killed two brothers, government investigators find
Jenny Strasburg – The Wall Street Journal
BP supervisors played down workers’ concerns about an Ohio refinery spiraling into chaos, missing multiple opportunities to prevent a September 2022 explosion that killed two brothers, federal investigators found in a new report this week. The findings from a nearly two-year probe by the U.S. Chemical Safety and Hazard Investigation Board provide fresh detail about the accident that killed BP employees Ben and Max Morrissey, both in their 30s.
/jlne.ws/3xyZram
U.S. Recovers Monet Painting, Paris Apartment From 1MDB Fugitive Jho Low; More than $1.4 billion linked to the corruption scandal has been returned to Malaysia
Corinne Ramey – The Wall Street Journal
The family of fugitive financier Jho Low will turn over to U.S. authorities a Paris luxury apartment and Andy Warhol and Claude Monet paintings, the latest in a string of settlements to resolve allegations that Low was the mastermind of the multibillion-dollar 1MDB fraud. The $100-million recovery, announced by the Justice Department on Wednesday, adds to a sweeping, decadelong effort to recover more than $1 billion in similar assets tied to Low and return them to Malaysia. Prosecutors have filed dozens of forfeiture suits to recoup assets allegedly purchased with funds embezzled from 1Malaysia Development Bhd., or 1MDB, a Malaysian sovereign-wealth fund.
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One of the Hottest Trades on Wall Street, an Etymological Study; An informal exploration of ‘synthetic risk transfers,’ one word at a time.
Tracy Alloway – Bloomberg
It’s a truism of Wall Street that you can’t sell something without first figuring out what to call it. Making money requires catchy titles and acronyms that are ideally vague enough to convey importance and desirability without necessarily explaining exactly what’s being sold. Enter synthetic risk transfers, or SRTs, a type of securitization which sees banks offload risk from their balance sheets to other types of investors. By all accounts this business is booming: Apollo’s John Zito said this week that SRTs are “the investment du jour while money manager D.E. Shaw also announced that it’s setting up a second fund dedicated to buying the assets. Bloomberg reports that “investors are lining up to insure hundreds of billions of dollars of bank portfolios.”
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The giant Exxon project that could create the world’s last petrostate; But critics fear the oil bonanza will turn Guyana into a victim of the ‘resources curse’
Jamie Smyth and Joe Daniels – Financial Times
Inside a drab six-storey office block in a residential street in Guyana’s capital Georgetown, a team of ExxonMobil executives are working out how to expand one of the largest offshore oil developments in history. The US energy giant and its partners, Hess and Chinese group Cnooc, have already discovered about 11bn barrels of oil in the Stabroek Block, a vast oil reservoir about 120 miles off the coast of the South American country.
/jlne.ws/3zse3bS
The Petrodollar Is Dead, Long Live the Petrodollar; Talk of pricing oil in anything but greenbacks is greatly exaggerated. Again.
Javier Blas – Bloomberg
The petrodollar died this month — or so I learnt via the financial blogosphere. In the past fortnight, Google searches for “petrodollar” have spiked to a record, and viral posts about Saudi Arabia ditching the greenback have ricocheted throughout commodity and currency trading rooms. Apparently, a cataclysmic event has ended American economic hegemony.
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UBS Creates New Wealth Unit in Khan, Karofsky Strategy Reboot; GWM Solutions to bring various wealth offerings together: memo; Michael Camacho set to join UBS from JPMorgan in September
Jan-Henrik Foerster and Myriam Balezou – Bloomberg
UBS Group AG is reorganizing its global wealth management arm in the first major move by its new leaders Rob Karofsky and Iqbal Khan, pursuing its long-standing aim of bringing more investment services to its ultra-rich client base. As part of the move, UBS will create a new unit – dubbed GWM Solutions – that will bring various wealth offerings under one roof, according to a memo seen by Bloomberg News.
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UBS shakes up wealth business to align more closely with investment bank; Move builds on long-term strategy by Switzerland’s biggest lender to sell more banking services to ultra-rich clients
Owen Walker – Financial Times
UBS has shaken up its wealth management business in preparation for the division’s new co-heads, Iqbal Khan and Rob Karofsky, taking charge next week. The reorganisation, announced to staff on Thursday morning, is designed to make its dominant wealth management business closer aligned to its investment bank and asset management unit.
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Beyond the Data: Hedge funds loving their algos more than ever before; Wesley Bray dives into the latest data from The TRADE’s research desk which saw the overall rating for algorithm performance reach the highest average score on record, demonstrating key improvements across the algorithmic trading landscape, particularly for hedge funds.
Wesley Bray – The Trade
The past year has seen vast improvement across the algorithmic trading space when it came to hedge funds’ strategies, new data from The TRADE has found. In fact, overall, 2024 has proved to be a banner year for algorithmic trading providers, with the overall rating for performance sitting at 5.86 – significantly higher than 2023 and demonstrating the highest survey average from hedge fund respondents since we began tracking their results separately in 2016.
/jlne.ws/4cC6MEX
The buy-side on AI: ‘The fear is real, but the rewards are there’; “AI is really changing just how much a trader can add to the investment process. Not just through execution, but also the selection aspect of what goes into a portfolio,” asserted Rebecca Healey, co-chair EMEA regional committee at FIX Trading Community.
Claudia Preece – The Trade
Fifty industry experts joined the recent FIX Trading Community London Artificial Intelligence (AI) Workshop voicing – among other views – that the upsides of AI are there despite some existing fears. Speaking in a roundup of the findings, executive director of FIX Trading Community, Jim Kaye, explained that “the room didn’t feel that the industry was quite ready yet for full AI in autonomous pre-trade and execution solutions, but did say that it was only a matter of time.”
/jlne.ws/3L3Xaao
State Street Global Advisors and Galaxy Asset Management collaborate on new digital asset-based strategies; Investors will be provided with access to the $2.4 trillion digital asset landscape through manager-directed strategies.
Wesley Bray – The Trade
State Street Global Advisors and Galaxy Asset Management have unveiled a new collaboration aimed at bringing investors digital asset-based strategies, offering key exposure to companies involved in the digital asset space. The agreement, which aims to move beyond cryptocurrencies and bitcoin, will see the two firms provide investors with access to the $2.4 trillion digital asset landscape through manager-directed strategies.
/jlne.ws/4ciDY4B
Ukraine Invasion
After Oil, Russia May Now Be Building a Shadow Fleet for Gas; Little-known Dubai-based firms have been accumulating ships; Move could help Russia boost revenue from lucrative LNG market
Bloomberg News
In the months that followed its invasion of Ukraine and punitive Western restrictions imposed in response, Russia amassed a shadow fleet to ferry its oil around the world. Now there is growing evidence Moscow has begun to do the same for liquefied natural gas.
/jlne.ws/3XAJnPY
Israel/Palestine Conflict
Israel’s push to create a ‘dead zone’ in Lebanon; As Hizbollah and Israel trade cross-border fire, radar data and interviews show attacks have ravaged 5km-wide strip of land
Raya Jalabi, Malaika Kanaaneh Tapper, Chris Cook and Aditi Bhandari – Financial Times
Over nearly nine months of simmering conflict with the Hizbollah militant group, Israel’s military has laid waste to swaths of southern Lebanon. Even as diplomats scramble to prevent a full-scale war that could inflame the region, Israeli attacks have destroyed or badly damaged buildings and infrastructure, farmland and forests, as well as striking Hizbollah military targets. In the scattered villages and towns that dot the frontier, some entire neighbourhoods have been levelled.
/jlne.ws/4czgJmk
Summer heat brings new misery to Palestinians in Israel’s Gaza campaign
Mohammad Salem – Reuters
Sweltering summer weather is worsening conditions in Gaza where nearly all the 2.3 million inhabitants have been driven from their homes by Israel’s military campaign and where there is almost no electricity and little clean water. Families living in tents, in crowded shelters in U.N. schools or crammed into private homes, face the rising summer temperatures without air condition, showers or a functioning health system amid rising rates of malnutrition and disease.
/jlne.ws/45GBZEI
Exchanges, OTC and Clearing
Rapid rise in derivative trading in India could pose several challenges, says central bank report
Reuters
A rapid rise in derivative trading volumes in India could pose several challenges, a central bank report said on Thursday, adding to warnings of the financial stability risks that could emerge from a surge in retail participation in the country’s futures and options market. Retail investors could be exposed to sudden movements in markets without proper risk management if they have large exposure to derivatives, the Reserve Bank of India said in the Financial Stability Report, which is a collective assessment of India’s Financial Stability and Development Council and includes contributions from all key regulators.
/jlne.ws/45FIjML
CME Group and Mayor Johnson Award Star Scholarships to 25 Chicago Students Graduating to Four-Year Institutions
CME Group
CME Group, the world’s leading derivatives marketplace, and Chicago Mayor Brandon Johnson have awarded 25 City Colleges of Chicago graduates with a $5,000 scholarship towards their four-year degrees. This is the eighth consecutive year CME Group is recognizing the academic achievements of Star Scholars at City Colleges of Chicago to increase higher education opportunities for students with diverse backgrounds, building on more than three decades and more than $2 million in support for Chicago students.
/jlne.ws/4cB6Pk9
EEX Press Release – EEX and ECC waive transaction and clearing fees for Nordic power markets for six months
European Energy Exchange
The European Energy Exchange (EEX) and European Commodity Clearing (ECC) will offer a six-months transaction and clearing fee waiver for trading in EEX Nordic Power Futures products, comprising of EEX Nordic Zonal Power Futures as well as EEX Nordic System Price Power Futures. The fee waiver applies between 1 July 2024 and 31 December 2024. Peter Reitz, CEO of EEX, comments: “We are fully committed to our pledge of building liquidity in the Nordic power market, and to underpin this we recently extended our product offering. To further support the trading community, we are now introducing a temporary fee waiver in order to lower the barriers for trading. We strongly believe in the positive outlook for this market.”
/jlne.ws/3XFmNWg
Deutsche Boerse Photography Foundation and German Society for Photography (DGPh) offer prizes for writing about photography
Deutsche Boerse Group
The Deutsche Boerse Photography Foundation and the German Society for Photography (DGPh) are once again jointly announcing the two prizes “Thinking Photography. DGPh Research Prize” and “Writing Photography. DGPh Prize for Innovative Journalism”. The awards are presented every two years. Manuscripts can be submitted for both prizes from July 1 to October 31, 2024. The DGPh research prize “Thinking Photography” recognizes scientific work in the field of photography theory and history and recognizes approaches from the humanities, cultural studies or social sciences that make an exceptional contribution to photography research. In addition to qualification theses (master’s theses, diploma theses or dissertations), the prize can also be awarded for other independent publications that broaden research perspectives on the medium of photography.
/jlne.ws/3VJ7Gsl
ECB makes Boerse Stuttgart Group the only European exchange operator to participate in EU-wide blockchain tests
Boerse Stuttgart Group
Testing of market infrastructure for tokenized securities // Direct settlement on the blockchain with six partner banks and Bundesbank Boerse Stuttgart Group is the only exchange operator in Europe to have successfully applied for the second wave of the European Central Bank’s (ECB) EU-wide tests, in which the settlement of blockchain-based financial transactions against central bank money is being explored.
/jlne.ws/4cmaFya
ESMA Approved TAIFEX’s New Clearing Service in TWD NDF
Taifex
On June 12, 2024, the Taiwan Futures Exchange (TAIFEX) was notified by the European Securities and Markets Authority (ESMA) that the application submitted on June 28, 2023, for the addition of New Taiwan Dollar Non-Deliverable Forward (TWD NDF) clearing service has been officially approved and is effective on the date of notification. In compliance with Article 25 of the European Market Infrastructure Regulation (EMIR), Third-Country Central Counterparties (TC-CCPs) must notify ESMA of any service extensions or reductions. This allows ESMA to review compliance and assess the impact on the EU market. Accordingly, TAIFEX notified ESMA of its plan to extend clearing services on June 28, 2023, and began offering client clearing and TWD NDF clearing services on July 31, 2023. After confirming TAIFEX’s full regulatory compliance, ESMA approved the application on June 12, 2024.
/jlne.ws/3W1DMAM
First Initial Access Document on BME Scaleup from INBEST GPF III, INBEST GPF IV and INBEST GPF VIII
BME
This brings to ten the number of companies that have registered an Initial Access Document to this market. The Market Coordination and Incorporations Committee considers that INBEST GPF III SOCIMI, INBEST GPF IV SOCIMI and INBEST GPF VIII SOCIMI, will meet the requirements to join BME Scaleup. The Boards of Directors of INBEST GPF III SOCIMI, INBEST GPF IV SOCIMI and INBEST GPF VIII SOCIMI have taken as a reference for the commencement of trading of the shares a price of one euro per share, which represents a total initial market capitalization of the companies of 12.9, 55.7 and 19.8 million euros, respectively.
/jlne.ws/45KeRVD
BME participates as a DLT market operator in the Eurosystem’s experimentation program
BME
BME, through Iberclear, has brought together part of the Spanish financial community and will contribute to the proposal its solution for the issuance and settlement of bonds with blockchain technology. The initiative will simulate settlement in Central Bank money issued under DLT technology. Iberpay and Deloitte will collaborate with BME in the program as technical suppliers. BME, through Iberclear, has been admitted to the Eurosystem’s exploratory work as a DLT market operator to conduct experiments on new technologies applicable to the settlement of wholesale operations in central bank money. After a first phase of experimentation already underway, on June 21, the ECB’s Governing Council gave its approval for an additional group of participants to test Distributed Logging Technology (DLT) for the settlement of trades in central bank money, as part of the experimentation program it is maintaining through 2024.
/jlne.ws/4cC0DbR
Transforming the European settlement landscape for cleared repo
Eurex
Fabienne Zamfiresco, Sven Jongebloed, Raul Schwab, and Gael Delaunay discuss how the evolving European market landscape will shape settlement and fragmentation in the region, and impact the Eurosystem. The European repo markets are vital mechanisms for sourcing collateral and securing funding, but the cost of participating in them has often been elevated by a fragmented and complex settlement infrastructure. This can raise capital costs for dealers, and has historically reduced netting opportunities that would alleviate impact on their balance sheets.
/jlne.ws/4blAdd9
The London Tunnels lists on Euronext Amsterdam
Euronext
Market capitalisation of GBP 130 million; 22nd listing on Euronext in 2024; 7th international listing on Euronext in 2024, further strengthening Euronext’s leading position for cross-border listings in Europe. Euronext today congratulates The London Tunnels PLC, established to transform a former World War II tunnel complex in the centre of London into a major tourist attraction, on its successful listing on Euronext Amsterdam (ticker code: TLT). The London Tunnels intends to develop a series of visitor attractions in the Kingsway Exchange Tunnels in central London by restoring, adaptively reusing and bringing the tunnels back to life, offering a combination of historical heritage experiences and a cultural, multi-sensory, digital experience.
/jlne.ws/4cojqaP
HKEX Hosts LME Asia Week 2024
HKEX
Hong Kong Exchanges and Clearing Limited (HKEX) and its wholly-owned subsidiary, the London Metal Exchange (LME), were pleased to successfully host LME Asia Week 2024 in Hong Kong. The events included a kick-off VIP co*cktail reception and the LME Asia Metals Seminar at HKEX Connect Hall, as well as the LME Asia Dinner at the Hong Kong Convention and Exhibition Centre, which concluded today (Thursday).
/jlne.ws/4ckc0Fp
Fintech
CME Group expands Google Cloud partnership to launch new futures and options platform; The plan is to build a new private Google Cloud region to support CME Group’s global trading, offering derivatives traders access to “cloud-based, ultra-low-latency networking and high-performance computing”.
Claudia Preece – The Trade
CME Group has enhanced its partnership with Google Cloud as it plans for a new private cloud region and co-location facility in Illinois aimed at bolstering its markets offering for futures and options. The plan is to build a new private Google Cloud region to support CME Group’s global trading, offering derivatives traders access to “cloud-based, ultra-low-latency networking and high-performance computing”.
/jlne.ws/4cDqRL3
Google And CME Group Partner For Cloud-Based Futures Trading
Shivani Kumaresan – Benzinga
Alphabet Inc’s. Google and financial services provider CME Group Inc. are collaborating to innovate in the financial trading space by constructing a new cloud-computing network. The project aims to transition the futures and options trading of CME into a more modern, cloud-based environment. The partnership will focus on creating cloud and colocation facilities adjacent to CME’s existing data center in Aurora, Illinois. These facilities are expected to enhance trading speeds and efficiency for market participants.
/jlne.ws/3L233Vu
OpenAI Buys Enterprise Startup to Help Customers Sift Through Data; OpenAI has done acquihires, but this deal marks the first time it will be integrating both the technology and staff of the company it’s buying.
Shirin Ghaffary – Bloomberg
OpenAI has bought Rockset, an enterprise search and analytics startup, marking the most significant acquisition to date for the high-profile artificial intelligence company. The ChatGPT maker said Friday that it plans to integrate Rockset’s technology to help business customers and developers make better use of their data on OpenAI’s platform. Some members of Rockset’s team will also be joining OpenAI. Terms of the deal were not disclosed.
/jlne.ws/3zczWw3
The Goldman Sachs MD who was managing hedge fund risk left for a fintech
Sarah Butcher – eFinancial Careers
Another managing director from Goldman’s 2019 vintage is leaving. Unlike Joseph Anastasio, he’s not going to Citi but is joining a fintech. Atul Pawar is going to fintech firm Clear Street as chief risk officer according to a press release issued yesterday. Pawar said he’s delighted with his new job and that Clear Street is, “challenging the status-quo by building a modern, cutting-edge, centralized technology platform unlike any other available on the street. I look forward to contributing to the Company’s expansion plans and continued success.”
/jlne.ws/4cojpUj
Goldman Sachs Deploys Its First Generative AI Tool Across the Firm; It started by centralizing all its proprietary AI technology on an internal platform, which CIO Marco Argenti said might have slowed it down at first but is now paying off
Isabelle Bousquette – The Wall Street Journal
Goldman Sachs will finish rolling out its first generative artificial intelligence tool-for code generation-to thousands of developers across the company by the end of the month. Chief Information Officer Marco Argenti said the company’s approach to generative AI involved centralizing all proprietary uses of the technology on an internal platform, and restricting them elsewhere. “It might have slowed us down initially, but then we definitely gained a lot of velocity afterwards,” Argenti said.
/jlne.ws/4bilZK5
Amazon Leans Into Generative AI to Manage Its Finances; One of the world’s largest online retailers is looking to wring new efficiencies and cost savings out of greater reliance on the technology
Mark Maurer – The Wall Street Journal
Amazon.com is stepping up its use of generative artificial intelligence throughout its finance teams, as many companies look for ways to effectively move from testing and experimenting with the technology to prime time. The e-commerce giant initially adopted rules-based systems, one of the earliest forms of AI that use a set of rules to solve problems and make decisions, in its finance organization, which it then augmented with machine learning. Generative AI now assists finance employees with more complex analyses. Its finance teams are turning to generative AI in areas such as fraud detection, contract review, financial forecasting, personal productivity, interpretation of rules and regulations, and tax-related work, moves in part aimed at reducing costs, boosting efficiencies and increasing accuracy, company executives said. These use cases are in a mix of experimentation and implementation stages.
/jlne.ws/3VFZBVu
Cybersecurity
SEC Publishes Five C&DIs Covering Cybersecurity Incident Disclosures Pursuant to Item 1.05 of Form 8-K
Kerry E. Berchem, John Patrick Clayton, Garrett A. DeVries, Natasha G. Kohne, Rosa A. Testani, Michael S. Miller, Patricia M. Precel – Akin
On June 24, 2024, the U.S. Securities and Exchange Commission (SEC) published five new Form 8-K Compliance and Disclosure Interpretations (C&DIs) expanding the agency’s interpretations of cybersecurity incident disclosures pursuant to Item 1.05 of Form 8-K. In July 2023, the SEC adopted final rules with respect to cybersecurity incidents that generally require public companies to disclose (i) material cybersecurity incidents within four business days after determining the incident was material and (ii) material information regarding their cybersecurity risk management, strategy and governance on an annual basis. We wrote about the final cybersecurity disclosure rules here.
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New ASU institute to create national cybersecurity hub; DARPA funding will help develop master’s program in AI applications for computer security
ASU News
Inspired by the exploits of an 18th-century French thief-turned-law-enforcement-trailblazer, Yan Shosh*taishvili, an associate professor of computer science and engineering in the School of Computing and Augmented Intelligence, part of ASU’s Ira A. Fulton Schools of Engineering, has developed an innovative cybersecurity training program that will be put to work in the new American Cybersecurity Education, or ACE, Institute.
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AI arms race: Cybersecurity defenders in the age of evolving threats
Neal Bradbury – Security
As web application cyberattacks surge, defenders are on the frontline of an ever-evolving battlefield. With adversaries leveraging artificial intelligence (AI) to sharpen their assaults, defenders face unprecedented challenges. However, AI isn’t just empowering attackers – it’s also emerging as a crucial ally for defenders. Organizations can use AI’s capabilities and implement strong security training to identify and neutralize threats.
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Atos in Rescue Talks With Creditors After Onepoint Consortium Pulls Out; Despite efforts to reach a definitive agreement on Atos’s financial restructuring, conditions weren’t favorable for what it said was a lasting solution, Onepoint said
Pierre Bertrand – The Wall Street Journal
Atos is in talks with bondholders and banks after a consortium that included shareholder Onepoint withdrew its rescue proposal, the latest setback for the struggling French IT firm as it seeks to turn around its finances. Negotiations between Atos and the Onepoint consortium ended Tuesday in a blow to the company grappling with persistently high debt and sapped investor confidence. Atos, the cybersecurity provider for this summer’s Paris Olympics, had earlier this month agreed to work with the Onepoint consortium to reach a definitive financial-restructuring agreement to be implemented next month.
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Cryptocurrencies
Crypto Exchange Bybit Grabs Global Spotlight in Void Left by FTX
Ryan Weeks – Bloomberg
A crypto exchange run by Bybit Fintech Ltd. has surged to second spot globally by trading volume after targeting former clients of the defunct FTX platform as well as users in Europe and Russia. Dubai-based Bybit’s growth has been spurred by plugging the gap left by FTX with a service that allows digital tokens to be used as collateral for margin trading, co-founder and Chief Executive Officer Ben Zhou said in an interview.
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State Street, Galaxy Digital to Develop Active Crypto Trading Products; Galaxy Digital inked a similar deal with DWS last year for the European market.
Pariksh*t Mishra, Omkar Godbole – CoinDesk
State Street Global Advisors and Galaxy Asset Management said they are working together to build crypto products that offer exposure to crypto companies as well as spot and futures-based exchange-traded funds (ETFs). State Street Global Advisors, a unit of financial services giant State Street (STT), filed an application with the U.S. Securities and Exchange Commission (SEC) to register a crypto-based fund called the SSGA Active Trust. Galaxy will be responsible for the day-to-day management of the fund’s investments, according to the filing. The company is affiliated with Galaxy Digital (GLXY), a financial services company that specializes in digital assets.
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MiCA set to accelerate investment in surveillance for crypto trading firms
Eventus via PR Newswire
The European Union’s Markets in Crypto Assets Regulation (MiCA) is set to accelerate ongoing investment in surveillance systems for cryptocurrency trading, a report from Acuiti has found. The report, The Impact of MiCA on Crypto Market Surveillance: Insights and Challenges, which was commissioned by Eventus and based on a survey and series of interviews with senior executives at 68 firms engaged in crypto trade across the buy-side, sell-side and exchanges, found that a move to establish market surveillance systems is underway across the industry. MiCA represents one of the first comprehensive regulatory frameworks for crypto trading to be developed in a major financial jurisdiction, and its adoption will increase requirements for market participants in a range of areas.
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US Boosts Reward for Information on ‘Cryptoqueen’ to $5 Million; Alleged OneCoin mastermind Ruja Ignatova was indicted in 2017; Ignatova is on FBI’s list of 10 most-wanted fugitives
Chris Dolmetsch – Bloomberg
US authorities have increased a reward for information leading to the arrest and conviction of the alleged mastermind behind the massive OneCoin cryptocurrency fraud to $5 million. The State Department on Wednesday said it was increasing the payout for any details about the whereabouts of OneCoin co-founder Ruja Ignatova. The reward was initially set at $100,000 when she was added to the Federal Bureau of Investigations’ list of the 10 most-wanted fugitives in June 2022.
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Politics
A Debate Cheat Sheet for Business; Tax policy, inflation, the economy and markets will be some key issues for corporate America and Wall Street in tonight’s showdown between President Biden and Donald Trump.
Andrew Ross Sorkin, Ravi Mattu, Bernhard Warner, Sarah Kessler, Michael J. de la Merced, Lauren Hirsch and Ephrat Livni – The New York Times
Talking points. All eyes will be on CNN at 9 p.m. Eastern, when President Biden and Donald Trump face off in their first debate since 2020. Among the keenest watchers will be executives and investors looking for signs about how the candidates might handle the economy and business in a second term. There will be plenty to scrutinize in the 90-minute, audience-free debate, including what the candidates say and how they say it. Here’s what we will be looking out for. (And, for a lighter take, check out our debate “bingo card” further below.)
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‘Volatile and Unpredictable’: Why Fast-Money Traders Like Trump
Liz Capo McCormick and Ruth Carson – Bloomberg
Donald Trump’s from-the-hip style may start making financial markets volatile again – and that’s just fine for a breed of global fast-money traders who thrive on that. With he and President Joe Biden running neck-and-neck ahead of their first debate Thursday night, investors have already been trying to game out how the Republican’s return to the White House could affect everything from the electric-vehicle industry to the direction of long-term interest rates.
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Fortune 100 CEOs ‘despise’ Trump, critic claims – but an insider close to the former president says he’d rather win the hearts of small businesses
Eva Roytburg – Fortune
None of the Fortune 100 CEOs-a group that has historically leaned Republican-have donated to former President Donald Trump’s 2024 reelection campaign, Yale School of Management Professor Jeffrey Sonnefeld told Fortune.
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Regulation
Infosys CEO settles Indian regulator’s charge of lacking controls to prevent insider trading
Reuters
Infosys CEO Salil Parekh settled charges for failing to place adequate internal controls to prevent insider trading at India’s No.2 IT services exporter during a 2020 contract, the country’s markets regulator said on Thursday. Parekh agreed to pay 2.5 million rupees (around $30,000) to settle the markets regulator’s charge, which related to a contract for Infosys to provide U.S. financial firm Vanguard with a cloud-based record-keeping platform. Infosys publicly disclosed the deal in 2020, but the Securities and Exchange Board of India said “certain information which was unpublished price sensitive information (UPSI) had not been considered as such by Infosys”.
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SEC Obtains Judgments Against Participants in International Microcap Fraud Schemes
SEC
On June 20, 2024, the U.S. District Court for the District of Massachusetts entered judgments against Canadian residents Mike K. Veldhuis, Paul Sexton, Jackson T. Friesen, Zhiying Yvonne Gasarch, and Courtney Kelln for their roles in fraudulent schemes that collectively generated hundreds of millions of dollars from unlawful stock sales and caused significant harm to retail investors in the United States and around the world. Among other relief, these defendants were collectively ordered to pay more than $48 million in disgorgement and civil penalties.
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Court appoints independent party to verify payments made from the Shield Master Fund
ASIC
The Federal Court has appointed Jason Tracy and Lucica Palaghia of Deloitte to have full control of the bank accounts of the Shield Master Fund (Shield). The 26 June 2024 Court orders prevent Keystone Asset Management Ltd (Keystone), the responsible entity for Shield, from selling, transferring, or dealing with Shield’s assets, other than to make certain payments that must first be approved by Deloitte.
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A legal threat overhanging London market’s revival bid; Court of Appeal to hear test case for widening use of class action lawsuits
Matthew Vincent – Financial Times
Shareholders have a right to be angry about corporate malfeasance and institutional incompetence. But should they, automatically, have a right to much more? Take the case of the London-listed outsourcer Serco and security group G4S from July 2013. Shares in the two fell heavily when they were accused of overcharging the government by millions of pounds for the electronic tagging of offenders. Serco had £236mn wiped off its market value in a day, after it was found to have billed for tagging criminals who were still in prison, still at large, or still very much dead. G4S lost £167mn of its value on the same day, having demanded payments for guards so diligent that they strapped an ankle tag to a prosthetic leg. Serco was later fined £19mn, and G4S £44mn, following a Serious Fraud Office investigation.
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FCA urged to block Shein London listing over forced-labour concerns; Human rights group launches campaign to press regulator to halt potential blockbuster IPO
James Kynge – Financial Times
A UK-based human rights group has launched a legal campaign to stop the online fast-fashion group Shein from securing a blockbuster listing on London’s Stock Exchange. Stop Uyghur Genocide, which alleges minority Uyghur people are being used as forced labour in Shein’s cotton supply in China’s north-western Xinjiang region, this week urged the Financial Conduct Authority, the UK financial regulator, to block Shein’s application, challenging the potential listing on legal grounds.
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Putting customers at the centre of banking
ASIC
Speech by ASIC Chair Joe Longo at the Australian Banking Association (ABA) Conference, 27 June 2024.
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Teamwork: A Smart way to tackle financial crime
Speeches First published: 26/06/2024 Last updated: 26/06/2024
FCA
Speech by Steve Smart, joint executive director of enforcement and market oversight, delivered at the Financial Services Investigations and Enforcement Summit.
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The Council of Experts Concerning the Follow-up of Japan’s Stewardship Code and Japan’s Corporate Governance Code
FSA
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MAS Expands Industry Collaboration to Scale Asset Tokenisation for Financial Services
MAS
The Monetary Authority of Singapore (MAS) today announced the expansion of initiatives to scale asset tokenisation for financial services. This includes partnering with global industry associations and financial institutions to drive common asset tokenisation standards in fixed income, foreign exchange (FX) and asset & wealth management. MAS, with international financial institutions, also announced the successful completion of the first phase of the Global Layer One (GL1) initiative and plans to develop standards, market practices and governing principles of foundational digital infrastructure for tokenised assets.
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SFC and HKMA conclude annual updates to Financial Services Providers list under OTC derivatives regulatory regime
SFC
The Securities and Futures Commission (SFC) and Hong Kong Monetary Authority (HKMA) today issued joint consultation conclusions on the annual updates to the list of Financial Services Providers (FSP List) (Note 1) under the over-the-counter (OTC) derivatives clearing regime.
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Investing and Trading
Top-rated European commercial mortgage bonds set for first losses since credit crisis
Euan Healy and Joshua Oliver in London – Financial Times
Investors in several European commercial mortgage bonds that were originally sold with top credit ratings look set to suffer losses, say analysts, the first time since the global financial crisis that the safest tier of this debt has been hit. Among those set for losses are holders of the most senior bonds in a commercial mortgage-backed security that originally made a loan to Oaktree Capital Management to finance three UK shopping centres. The recently agreed sale of the underlying properties is expected to raise less than the value of the outstanding debt.
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BP halts hiring, slows renewables roll-out to win over investors
Ron Bousso – Reuters
BP’s new CEO Murray Auchincloss has imposed a hiring freeze and paused new offshore wind projects as he places a renewed emphasis on oil and gas amid investor discontent over its energy transition strategy, sources at the company said. The moves, which have not previously been reported, are part of a decision by Auchincloss to slow down investments in big budget, low-carbon projects, particularly in offshore wind, that are not expected to generate cash for years, said several sources at BP who declined to be named.
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Environmental, Social and Corporate Governance
Exclusive: US Treasury, USAID call in development banks for urgent talks on extreme heat
David Lawder – Reuters
The U.S. Treasury and the U.S. Agency for International Development are calling leaders of multilateral development banks into an urgent meeting on extreme heat and its devastating impact on developing countries, according to Treasury officials. The private, virtual meeting on Thursday morning – the first of its kind – is aimed at finding ways to shift more resources to help countries build climate resilience and adaptation to reduce extreme heat damage amid a summer of record temperatures globally, the Treasury officials told Reuters.
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Global carbon removal market could reach $100 billion/yr from 2030-35, report says
Susanna Twidale – Reuters
The global market for carbon dioxide (CO2) removal credits could reach up to $100 billion a year between 2030 and 2035 from $2.7 billion last year if barriers to its growth are addressed, a report by management consultancy Oliver Wyman said on Thursday. Worsening climate change and inadequate efforts to cut emissions have led U.N. scientists to estimate billions of tons of carbon must be removed from the atmosphere annually by using nature or technology to meet global climate goals.
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Drought Gripping Morocco Is Bad Omen for Global Food Supplies; The nation’s unrelenting dry spell is ushering in record wheat imports and risking fruit and vegetable sales abroad.
Souhail Karam – Bloomberg
Mohamed Sadiri has farmed the same 3 hectares in western Morocco since 1963, and he’s never seen the land this parched. Wheat yields plummeted last year to 1 ton per hectare (2.5 acres), his smallest harvest ever, as the worst drought period in three decades envelops the North African nation. The 25-foot-deep well on Sadiri’s plot dried up, and he can’t afford to dig any deeper. So now he’s trying barley, a more resilient crop.
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Europe’s largest renewable producer scales back plans for wind and solar plants; Statkraft forced to cut growth because of lower electricity prices and higher costs
Rachel Millard and Mari Novik- Financial Times
Europe’s largest renewable power producer is scaling back plans to build new wind and solar plants because of lower electricity prices and higher costs.Statkraft chief executive Birgitte Vartdal, who took over in April, has pledged to “sharpen” strategy to cope in a tougher environment.
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Visualized: the parts of the US where summer heat has risen the most; More than a third of Americans endure summers at least 1.5C hotter than the 1895 average, analysis shows
Oliver Milman – The Guardian
An onslaught of record-breaking heat across much of the US has provided yet another indicator of a longer-term issue – summers are progressively getting hotter for Americans in all corners of the country. The US climate scientist Brian Brettschneider has analysed almost 130 years of federal data and it shows that from New York to Los Angeles summers have got significantly hotter in that time compared with the average levels of warming brought about by the burning of fossil fuels.
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Recycling to kick in as long-term solution to EU rare earths challenge
Eric Onstad – Reuters
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BSI to launch global standard for credible net-zero targets; The British Standards Institution (BSI) has kick-started an 18-month process to develop a new, independently verifiable standard to assure the credibility of net-zero targets from businesses and other organisations.
Sarah George – edie
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Analysis: A mountain of asset sales loom after oil megamerger era
Shariq Khan, Sabrina Valle and Arathy Somasekhar – Reuters
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Lawsuits Targeting ‘Climate Washing’ Becoming More Frequent; New report says climate litigation on rise in Global South; Some 233 new environmental claims were filed worldwide in 2023
Katharine Gemmell and Karin Matussek – Bloomberg
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Canada Finds It’s Cheaper to Ship Oil Via Stop in California; Diversion south makes for longer but cheaper journey to Asia; Exports to China, India from Trans Mountain have soared
Robert Tuttle – Bloomberg
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How Denmark Is Nudging the Nation to Cut Back on Meat; Wealthier countries need to consume less meat to tackle climate change – and one nationwide experiment to encourage plant-based diets may show a way forward.
Sanne Wass – Bloomberg
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LGIM to sell some Glencore shares on concerns over coal production; UK asset manager’s decision underlines fierce debate on cutting carbon emissions
Harry Dempsey – Financial Times
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Rayner refuses to rule out scrapping landmark North Sea oil project
Michael Bow – The Telegraph
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Opinion: Britain’s wilful destruction of its oil and gas industry is beyond belief
Jeremy Warner – The Telegraph
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Institutions
Bankers Say 2024 M&A Is Just Good When ‘It Should’ve Been Great’
Michelle F. Davis and David Carnevali – Bloomberg
A flurry of megadeals early in the year failed to translate into a sustained recovery in mergers and acquisitions, after the momentum was stymied by skittish central banks and geopolitical unease. The value of deals globally stands at roughly $1.4 trillion at the halfway stage, according to data compiled by Bloomberg. While that’s up 14% on the same period in 2023, it still lags the 10-year average for a first half by more than $300 billion, the data show.
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Ex-BNP Lawyer Fired for Racial Slur Loses EUR1.5 Million Suit; Paris employment tribunal backs dismissal for gross misconduct; Faure expressed regrets but said emails were a private matter
Gaspard Sebag – Bloomberg
A former BNP Paribas SA equities lawyer lost his fight for a EUR1.5 million ($1.6 million) payout after being fired for using a racial slur to describe a colleague, likening another to Cambodian dictator Pol Pot and calling his boss a vulgar name. The Paris employment tribunal on Wednesday backed the dismissal of Benoit Faure for gross misconduct and rejected his claim for compensation and bonuses, a clerk said by phone. Fuller details won’t be available for weeks.
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What our survey revealed about wealthy investors and their advisers; In the wake of Consumer Duty, the UK’s wealth managers aim to meet clients’ heightened expectations
David Barks – Financial Times
In an era of stringent regulations, the UK’s wealth management industry is at a pivotal juncture, with the Financial Conduct Authority’s Consumer Duty setting a new bar for investor relations. Savanta’s latest surveys of 25 of the UK’s leading wealth managers and 500 millionaire investors provides a snapshot of the sector’s evolution and its implications for investors.
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Goldman Signals End of an Era in Private Equity With a Big Hire
Sridhar Natarajan – Bloomberg
A long era of easy profits in private equity is gone, and Goldman Sachs Group Inc. is digging in deeper for the harder work ahead. That’s the message from Marc Nachmann, the head of the Wall Street firm’s money-management arm, adding his voice to the chorus of industry leaders declaring the buyout business has passed a critical juncture. A period of profits driven by financial engineering and “multiples expansion” is over, Nachmann said in an interview.
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Jefferies Q2 profit beats estimates on dealmaking rebound
Lananh Nguyen and Pritam Biswas – Reuters
Jefferies Financial on Wednesday beat analysts’ estimates for second-quarter profit as the bank earned higher fees from advising on deals as well as underwriting stock and bond sales. Its earnings, viewed as an early indicator of results at major investment banks such as Goldman Sachs and Morgan Stanley, underscore the strong recovery in the corporate dealmaking space.
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Citigroup’s head of risk data leaves in latest senior exit
Tatiana Bautzer and Elisa Martinuzzi – Reuters
Citigroup’s head of risk data, analytics, reporting and tech Peter Cai has left the bank, a spokesman said on Wednesday, the latest senior departure since its reorganization began in September. Risk and data have been key issues for Citi in recent years following consent orders by the Federal Reserve and Office of the Comptroller of the Currency to address long-term deficiencies in risk management, data governance and internal controls.
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Nomura hands British banker record $12mn pay award; Christopher Willcox earned over 3 times the amount made by the Japanese bank’s chief executive
David Keohane in Tokyo – Financial Times
Nomura has handed a British banker a record pay package for an executive officer at the Japanese group after the business he heads helped it recover from one of the most turbulent periods in its history. Christopher Willcox, who has led Nomura’s wholesale banking division since October 2022, was paid $12mn in the year ending in March, more than triple the amount made by the bank’s chief executive Kentaro Okuda in the same period.
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Nikko AM picks up equity stake in Tikehau Capital as firms finalise strategic partnership; As well as the acquisition of an equity stake, the partnership also encompasses a distribution agreement and a joint venture.
Claudia Preece – The Trade
Nikko Asset Management is set to pick up an equity stake in global alternative asset manager Tikehau Capital as the firms finalise their strategic partnership in Asia. The firms confirmed that this stake will remain below the first applicable statutory disclosure threshold.
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ETF debuts surge as actively managed offerings gain traction; ETFs overseen by fund managers who pick stocks continue to gain ground on index followers
Will Schmitt in New York – Financial Times
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BlackRock Muscles Into Private Assets Market for Wealth Clients
Silla Brush – Bloomberg
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Work & Management
RTO Mandates Are Killing the Euphoric Work-Life Balance Some Moms Found; The dream is over or ending, and it’s not entirely clear why.
Claire Suddath – Bloomberg
On days when Ellen went into the office, her mornings started around 6 a.m. She woke up with her 3-month-old baby and nursed him. Then she got him dressed. She got ready, too, and put on makeup. She packed a lunch, her breast pump, milk storage bags and anything else she needed. She said goodbye to her husband and son and drove 45 minutes in Austin traffic to get to her office.
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Empty Offices Risk Wiping Out $250 Billion in Commercial Property Value; US office vacancy rate is forecast to hit a peak of 24% by 2026.
Matthew Boyle – Bloomberg
Nearly one-quarter of all US office space will be vacant by 2026 as working from home persists, slicing commercial-property values by as much as $250 billion, according to a report from Moody’s. Office-vacancy rates are expected to rise to 24% from 19.8% in the first quarter of this year in the US, reducing revenue for office landlords by between $8 billion and $10 billion when combined with the impact of lower rents and lease turnovers, the authors of the report said. That, in turn, could translate into “property value destruction” in the range of a quarter-trillion dollars, Todd Metcalfe, Moody’s associate director of commercial real estate (CRE) forecasting, and Tom LaSalvia, Moody’s head of CRE economics, said in a separate analysis that’s not contained in the report.
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At 54, where do I start looking for a new job? The trouble is, my CV looks a bit schizophrenic
James Max – Financial Times
A six-figure hole has been gouged from my finances. Two revenue streams have dried up. A three-year term as chair of a property company ended and my work at a TV station was canned. I’m 54 years old – so what do I do next? Do I even need a new job? I am, after all, still quite busy: I have the radio show, TV appearances and this column. Then there’s my role on the governing council of the Royal Albert Hall and let’s not forget that I’m chair of the Frinton-on-Sea Lawn Tennis Club. It’s quite a roster. But the last two are unpaid. Voluntary positions are like garden bindweed: untended, they will fill any void you might have.
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It Has Never Been Harder, or More Essential, to Have a Work Best Friend; Some do’s and don’ts for finding a worthy ally in a hybrid workplace.
Rachel Dodes and Lauren Mechling – The Wall Street Journal
Katherine Tester, a management consultant in Minneapolis, started her job in 2021, when everyone at her company was working remotely. “You hear all the time how it gets harder and harder to make friends as you get older-and then the pandemic happened and it was like: Boom!” the 39-year-old says. But on a Zoom conference call she felt a sudden connection with Abbie Stuckey, a 33-year-old account manager. “I just knew I liked her,” Tester recalls.
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Wellness Exchange
Contraception Is Free by Law. So Why Are a Quarter of Women Still Paying for It? Senator Bernie Sanders of Vermont has called on a government watchdog to investigate. Here’s what you need to know.
Alisha Haridasani Gupta – The New York Times
Last week, Senator Bernie Sanders of Vermont, chair of the Senate health committee, called on a government watchdog to investigate why insurance companies are still charging women for birth control – a move that thrust access to contraceptives back into the spotlight.In a letter to the Government Accountability Office, the senator noted that insurance companies were charging Americans for contraceptives that, under federal law, should be free – and that they were also denying appeals from consumers who were seeking to have their contraceptives covered. Some experts estimate that those practices could affect access to birth control for millions of women.
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To cure disease, AI needs more of our data; Information about patients remains ‘liquid gold’ when it comes to enriching medical research
John Thornhil – Financial Times
Machines have already outsmarted humans at playing chess, identifying birdsong and predicting complex protein structures. But when it comes to the really clever and intuitive stuff, like original scientific research, we humans like to think that we still have the advantage.
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Regions
Revival Gathers Speed Except in Europe: Bloomberg Trade Tracker
Claire Jiao, Michelle Jamrisko, Chloe Whiteaker and Cedric Sam – Bloomberg
A string of indicators suggest a recovery in trade is taking hold almost everywhere outside of Europe, whose biggest economy is beset by a grim business outlook. Bloomberg’s Trade Tracker showed the best reading in years, with nine of the 10 key measures of global commerce back in “normal” territory in June. Shipping volumes bounced back in Hong Kong’s ports, while export orders out of the US increased. An upturn in the tech sector, driven by the swift expansion of AI, ensured chips and electronics makers like Singapore, Taiwan and South Korea maintained their momentum.
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Japan’s new banknotes might have come too late; An army of vending machines is defying the drive to cashlessness but recalibrating them will be expensive
Leo Lewis – Financial Times
Next week, Japan will introduce three new banknotes for the first time in 20 years, adorning them with a heavyweight trio from the stratospheres of science, higher education and raw, unbridled capitalism. But this is no straightforward or low-cost switch. It was never going to be in a country that has 3.9mn cash-ingesting vending and ticketing machines, acute labour shortages and government targets for pushing the country towards cashlessness. The redesigned notes could either drive inflation or suppress it and few seem sure which will happen.
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India set for billions of dollars of inflows as bonds join JPMorgan index; Inclusion of country’s debt in major benchmark could fuel market volatility, analysts warn
Chris Kay in Mumbai – Financial Times
India is set to welcome billions of dollars of foreign inflows when JPMorgan adds the country’s sovereign debt to its emerging markets index on Friday, a move that some analysts say will leave it more vulnerable to fickle flows of hot money. The inclusion of India marks the first time the bonds of the world’s fastest-growing large economy have been included in a major benchmark and is the latest move to open up a once closed-off market. It was only in 2020 that India removed foreign ownership restrictions on some rupee-denominated debt.
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India’s Quant Mutual Fund investors pull out “small” $167 million amid regulatory probe
Reuters
India’s Quant Mutual Fund said on Thursday that its investors withdrew about 13.95 billion rupees ($167 million), a “small” figure”, in the three days since the market regulator reportedly started a probe over allegations of “front running”. Local news media had on Sunday reported that the Securities and Exchange Board of India (SEBI) was investigating allegations of “front running”- or dealing on price-sensitive information before its general release – at the mutual fund.
/jlne.ws/4cfXvm4
India Credit Seen Benefiting From Index-Related Bond Flows
Khushi Malhotra and Divya Patil – Bloomberg
The capital flowing into India as it joins global bond indexes will gradually trickle into company notes, according to one of the few women to run a firm in the country’s $2 trillion fixed-income market.
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Macquarie Foresees Risk of Wider Yuan Trading Band in China
Tania Chen – Bloomberg
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Ex-Two Sigma Researcher Becomes Big Winner of China Quant Quake
Bloomberg
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Iceland’s Debut Gender Bond Sets Template for Other Governments; Great interest from investors in gender bonds: BNP Paribas; Others can follow Iceland’s lead, finance minister says
Greg Ritchie and Ragnhildur Sigurdardottir – Bloomberg
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Miscellaneous
Production of Cocaine Ingredient Falls in World’s No. 2 Producer; Area planted with coca dips in Peru for first time since 2015; Government touts latest figures as a win in its drug fight
Marcelo Rochabrun – Bloomberg
The area planted with the raw ingredient used to make cocaine in the world’s No. 2 producer fell for the first time in years, Peruvian authorities said Wednesday. Peru is second only to Colombia when it comes to growing coca, the plant that can be processed into cocaine, according to the United Nations.
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The Shadowy Judicial System That Controls the Fate of WSJ’s Evan Gershkovich; Defense of falsely accused reporter faces immense hurdles in Russian court that produces few acquittals
Matthew Luxmoore and Thomas Grove – Financial Times
On Wednesday morning, Wall Street Journal reporter Evan Gershkovich entered a Yekaterinburg courtroom at the start of his secret trial. Television cameras crowded around him as he stood in a cage surrounded by bulletproof glass, his head newly shaved due to prison rules. Then the media was ushered out, leaving him with his defense team, the state prosecutor and one or more judges. Neither U.S. Embassy personnel nor the reporters’ friends or fellow journalists were allowed to remain.
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