| May 03, 2024 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | 
| | | | | | Lead Stories | | | Cboe posts higher profit as market volatility boosts options trading
Pritam Biswas and Laura Matthews - Reuters
Cboe Global Markets (CBOE.Z), opens new tab reported a rise in first-quarter profit on Friday, as strong demand for hedging products amid shifts in market volatility helped boost the exchange operator's options trading volumes.
Geopolitical risks and macroeconomic uncertainties have fueled volatility in the markets, prompting investors and portfolio managers to hedge their positions.
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Hedge Funds Buying Protection With Defensive Stocks, Goldman Says
Natalia Kniazhevich - Bloomberg
Hedge funds are turning increasingly defensive as uncertainty around geopolitics and the path of interest rates, as well as the stock market's April swoon, has investing pros spooked.
Positioning data shows that hedge fund added defensive equity positions to their portfolio in April at the fastest pace in eight months, while still being net sellers of global stocks, according to figures compiled by Goldman Sachs Group Inc.'s prime brokerage desk. That snaps a four-month streak of buying. Health care saw the biggest inflows, while consumer discretionary stocks had the largest net selling in seven months, according Goldman's data.
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Société Générale defends risk controls after unauthorised trading incident
Sarah White - Financial Times
Société Générale has played down an incident involving unauthorised derivatives trading in Hong Kong last year, saying its risk controls had worked, as the French bank posted a smaller than expected profit drop thanks to a strong equities trading performance in the first quarter.
Slawomir Krupa, SocGen's former investment bank head who was appointed chief executive nearly a year ago, on Friday said the unauthorised trading in Hong Kong was ultimately detected by risk control systems and had caused no losses.
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Global hedge funds chase Hong Kong stocks rally, UBS says
Summer Zhen - Reuters
Global hedge funds that use an equities long-short strategy are growing increasingly bullish on China, evidenced by the heavy pick-up in their purchases of Hong Kong-listed shares, UBS Group said in a note. Hong Kong's stock markets, which closely mirror China's struggling performance, have recovered since March as Beijing rolled out economic support measures. The Hang Seng Index rose more than 7% in April, marking its best monthly gain since January 2023 and outperforming most major markets.
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Tremblant conversion marks growing hedge fund interest in ETFs; The ETF version of its long-only Tremblant Tax Efficient Fund strategy will have lower fees and taxes
Will Schmitt - Financial Times
A US hedge fund manager has taken the rare step of launching an exchange traded fund in a move that could herald a broader move by the asset class into the booming active ETF market. Tremblant Capital, which was founded by Brett Barakett in 2001 and has roughly $1bn in assets under management, plans to launch the Tremblant Global ETF (TOGA), a concentrated, long-only portfolio with about 40 holdings.
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Point72's Drossos Says Japan Disrupting One-Way Bets Against Yen; Volatility is 'too much right now for investors to stomach'; If payrolls strong Friday, then yen may need more support
Anya Andrianova - Bloomberg
By one measure, according to Point72's Sophia Drossos, Japan's intervention to prop up the yen has achieved a key objective: Preventing the market from piling into lopsided bets against the currency. The economist and strategist at the asset-management firm said the moves have made investors wary of wagering that the currency will keep weakening - given the risk of being caught offsides if officials swoop in to start buying the currency again.
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| | | | | | Exchanges | | | Cboe Global Markets reported significant achievements in their 2023 annual report, highlighting record options trading volume and successful technological migrations in Australia and Japan. The company also introduced a unique listings offering aimed at helping corporates and ETFs access global capital markets, alongside continuous innovation in client-driven products, exemplified by the launch of DSPX. In 2024, Cboe aims to enhance the interconnectedness of its markets globally, assist more individuals worldwide in achieving their financial goals, expand the accessibility of market data and related tools, and increase trading activity to generate more data. ~JJL
Cboe Global Markets Reports Results for First Quarter 2024
Cboe Global Markets
Cboe Global Markets, Inc. (Cboe: CBOE) today reported financial results for the first quarter of 2024. "During the first quarter, Cboe delivered record quarterly net revenue and strong adjusted earnings1, led by the strength of our Derivatives and Data and Access Solutions categories," said Fredric Tomczyk, Cboe Global Markets Chief Executive Officer. "These results build on our strong 2023 trends, as overall net revenues grew 7% year-over-year and adjusted EPS1 increased by 13% as compared to the same period in 2023. Importantly, the adjusted EBITDA margin1 for the quarter increased by 1.4% year-over-year to 67.2% during the quarter, marking clear progress in our efforts to drive greater margin efficiencies across our businesses. Last week, we announced plans to refocus our digital asset business to leverage our core strengths in derivatives, technology and product innovation while realizing operating efficiencies for both Cboe and our clients. The second quarter is off to a strong start, and I look forward to building on that momentum going forward."
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Focus: India's exchanges spar for dominance in hot derivatives market
Jayshree P Upadhyay - Reuters
India's top stock exchanges are luring investors with new products and lower fees as they battle for a share of the hot but fledgling derivatives market, in turn fuelling a surge in trading activity that is drawing regulatory scrutiny.
The larger National Stock Exchange of India and its older rival BSE (BSEL.NS), opens new tab are wrestling for dominance in derivatives, particularly the raging options market spurred by the introduction last year of short-term contracts that can be traded with borrowed funds.
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| | | | | | Regulation & Enforcement | | | IRS says audits for rich people and corporations are about to hit a whole new level. Buckle up.
Andrew KeshnerFollow - MarketWatch
The Internal Revenue Service is getting specific about how many more audits it wants to spring on rich taxpayers and businesses, as the tax collector absorbs billions of dollars in funding in order to toughen tax compliance at the top.
By the time people file their 2026 taxes, the IRS wants a 50% jump in the audit rate for households with incomes of $10 million and up, the agency said in a report Thursday. It's also seeking to nearly triple the rate of corporate audits.
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SEC charges firm that audits Trump's Truth Social with 'massive fraud' affecting hundreds of filings
Lukas I. Alpert - MarketWatch
The auditing firm used by Donald Trump's Truth Social media company has been charged with "massive fraud" by the Securities and Exchange Commission for work done for hundreds of companies on more than 1,500 regulatory filings.
The regulatory agency said that hundreds of audits done by BF Borgers CPA PC contained "deliberate and systemic failures" that included false documentation to make it appear its reports complied with standards set by the Public Company Accounting Oversight Board.
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| | | | | | Strategy | | | Wild Moves
Cboe (Video)
This week, the Fed met on Wednesday and the jobs report came out today. So what are some key market updates to know about? Find out from @AngieMiles in the #RUTreport.
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| | | | | | Events | | | The FIA is hosting a webinar on Tuesday, May 7, 2024 to review the first quarter 2024 trends in exchange-traded derivatives (ETD) volumes. The session will focus on global listed derivatives markets, in particular examining equity index derivatives in India, the US, and Europe; interest rate futures and options in the US and Europe; and shifts in the global commodity futures and options markets. Guest speakers Davesh Dubal and Giovanni Martelli from UBS will provide insights into algorithmic electronic trading and ETD voice execution. The webinar is hosted by Will Acworth, senior vice president of publications, data & research at FIA. ~JJL
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| | | | John Lothian News (JLN) is the news division of John J. Lothian & Company, Inc. (JJLCO). The online media and financial services firm is staffed by derivatives industry, journalism and technology professionals. | | | | | | | John Lothian News Editorial Staff: | | | John Lothian
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Editor-in-Chief
| | | Jeff Bergstrom
Editor
| | | Asma Awass
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