John Lothian: Stocks Trade for 390 M inutes a Day. Increasingly, Only 10 Matter; Indian Bourse’s Shares Tank as $20 Million Sought in Option Fees

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1 year ago

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Hits & Takes

John Lothian & JLN Staff

We had a problem with the administrator of our JohnLothianNews.com website and it was down over the weekend. The issue has been resolved and the website should be up this morning. Since this newsletter pulls images from the website to format it, we had to create a new format on the fly, which is why it looks different this morning. Also, the images for our sponsor logos are not dynamic this morning, meaning there are no links connected to the images. We apologize for the inconvenience. Things should be back to normal tomorrow.

Intercontinental Exchange, Inc. (ICE) announced that as of April 24, 2024, it has achieved a record open interest (OI) of over 94 million contracts across its futures and options markets, representing a 26% increase year-over-year. This includes a record 66.3 million contracts in commodities and a 62 million contract record in energy, marking a 30% increase in the latter. The surge in open interest was particularly notable in ICE's global oil markets and Brent options, with the latter reaching a new high of 3.5 million contracts on the same day, a 51% jump from the previous year. Additionally, ICE’s Low Sulphur Gasoil options and global natural gas markets also hit record open interests, with notable increases in ICE’s Henry Hub and TTF natural gas futures. The overall growth in ICE’s environmental complex open interest by 43% since the start of the year underlines the robust price signals and liquidity essential for companies transitioning to alternative energy sources.

https://jlne.ws/4dfKGct

Former Financial Times reporter Jeremy Grant chimed in on LinkedIn about the current challenge to the CME Group's dominance in the US Treasury futures market. He highlights Howard Lutnick's third effort and notes similar past attempts by Eurex in 2002 and other entities like ELX and BrokerTec. Grant argues that such efforts likely fail due to two main reasons: the difficulty in shifting liquidity and open interest from established exchanges due to cost and regulatory barriers, and the entrenched "vertical silo" model where an exchange controls both the trading and clearing of contracts. Despite the recurring challenges, the main motivation behind these attempts is to reduce monopolistic pricing power and introduce competition to lower prices, as demonstrated by past efforts in equities trading in London.

https://jlne.ws/4bfkX1R

CFTC Commissioner Christy Goldsmith Romero is set to participate in a virtual roundtable focused on the intersection of derivatives and climate change, hosted by the MSCI Sustainability Institute. The event is scheduled for Monday, April 29, 2024, and will take place from 9:00 a.m. to 12:00 p.m. GMT, aligning with 4:00 a.m. to 7:00 a.m. EDT for those joining from the USA. This roundtable will be held at MSCI's London office located at 10 Bishops Square, London.

https://jlne.ws/49TD8Jt

Adam Bradley, former general manager at ASX for its technical services business unit and head of sales for trading services has started a new business called Prospect he announced on LinkedIn.

https://jlne.ws/4aPLNhk

My hometown newspaper, The Patch, reported that two Elmhurst residents fell victim to a bitcoin scam where they were tricked into depositing money into bitcoin machines. The first victim, living on South Stratford Avenue, was misled by a false hacking alert on his laptop, while the second, from West Brush Hill Road, was deceived by a fake virus notification on her computer. Both residents were instructed to withdraw money and deposit it into a bitcoin machine following the fraudulent guidance. The exact amount of money lost was not disclosed, but similar incidents in nearby Western Springs involved losses up to $11,000, with scammers impersonating local authorities and company representatives.

https://jlne.ws/3UgdCsd

Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL

*****

Nature Action 100, a global investor-led initiative to address nature and biodiversity loss, has unveiled benchmark indicators for assessing corporate ambition and action on nature. The Nature Action 100 Company Benchmark measures progress toward the initiative’s Investor Expectations of Companies. The Benchmark, based on the initiative’s investor expectations of companies and developed in consultation with investors, comprises six indicators. These are: ambition, assessment, targets, implementation, governance, and engagement. The launching investor group includes BNP Paribas Asset Management. Learn more HERE. ~SAED

Our most read stories from our previous edition of JLN Options were:

Rooting for Trump to fail has made his stock shorters millions from Yahoo Finance. Financial analysts discuss growth of options, derivatives in the crypto market from TheStreet. Cboe Global Markets Realigns Digital Asset Business, Leveraging Strength and Expertise in Derivatives and Clearing from Cboe. ~JB

Subscribe to the JLN Options Newsletter HERE (it's free).

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ICE Redefines Mortgage Servicing for Industry Professionals with New Intelligent, Conversational Interface; ICE launches MSP Digital Experience, giving servicing professionals a more intuitive, dynamic and conversational approach to working in MSP, the industry’s leading system of record for mortgage servicing

Intercontinental Exchange, Inc.

Intercontinental Exchange, Inc. (NYSE: ICE), a leading global provider of technology and data, today officially introduced the MSP Digital Experience (MSP DX). MSP DX is a new conversational interface for working in MSP, ICE’s mortgage loan servicing system. MSP DX is an intuitive way of interacting with the full power of the MSP servicing system. It is designed to streamline workflows, increase efficiencies, and ease the training of servicing team members. ICE launched this new interface with escrow, historically one of the most-costly aspects of mortgage servicing. This functionality was previewed at ICE Experience 2024 and received positive reviews by leaders in the mortgage servicing industry.

https://jlne.ws/3WiMICq

****** Now if ICE could only make rates go lower.~JJL

Biden Calls for Release of WSJ Journalist Evan Gershkovich; President also mocks Trump at annual Washington dinner celebrating press freedom

John McCormick - The Wall Street Journal

For the second year in a row, President Biden called on Vladimir Putin to release Wall Street Journal reporter Evan Gershkovich from a Russian jail during a black-tie gala Saturday evening in Washington that celebrates press freedom. “Putin should release Evan,” he said at the White House Correspondents’ Association dinner. “We are doing everything we can.”

https://jlne.ws/3UAbYD4

****** Smart man doing the right thing for the second year in a row. FREE EVAN NOW!!!~JJL

Friday's Top Three

Our top story Friday was the Wall Street Journal's 30 Unique Gifts for the Mom Who Doesn’t Want Anything, including a $139 mug, a $200 massage gun, and a $70 pint of personalized ice cream. Second was Futures Exchanges Are for Traders, a Bloomberg opinion piece from Matt Levine. Third was California investor buys distressed office building near Willis Tower at fire-sale price, a Crain's Chicago Business story from April 18th.

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SGX Simplifies Access to Asian Markets, Launches New Futures Amid Growing U.S. and European Interest

John Lothian News

The theme for SGX at this year's FIA Boca conference was 'Asia Simplified.' Pol de Win, SGX's Senior Managing Director of Global Sales & Origination, said the group is "providing access to markets that are not easily accessible in a simplified and trusted manner, and in US dollars." He was interviewed by John Lothian News at the FIA International Futures Conference in Boca Raton, FL in March for the JLN Industry Leader video series, sponsored by Wedbush. Discussing the diverse range of products offered by SGX, which includes equity indexes, iron ore, rubber, and dairy, de Win remarked, "Because Asia is so diverse, it provides significant opportunities to explore various types of markets, each with its own unique dynamics today."

Watch the video here

Lead Stories

Stocks Trade for 390 Minutes a Day. Increasingly, Only 10 Matter; A third of all S&P 500 trades now occur just before the close; European research points to price distortion, liquidity issues

Justina Lee - Bloomberg

The regular market for US equities runs for 390 minutes on a standard trading day. But at the rate things are going, eventually the last 10 might be the only ones that matter. About a third of all S&P 500 stock trades are now executed in the final 10 minutes of the session, according to data compiled by BestEx Research, a developer of trading algorithms. That’s up from 27% in 2021. Now fresh evidence emerging from Europe — where the pattern is similar — suggests the trend may be hurting liquidity and distorting prices.

https://jlne.ws/4bcDGLy

Indian Bourse’s Shares Tank as $20 Million Sought in Option Fees; Regulator SEBI has sought higher fees for derivative contracts; BSE shares tank as much as 19%, biggest slump since 2017 debut

Ashutosh Joshi - Bloomberg

Shares of BSE Ltd. plunged as much as 19% on Monday, their biggest intraday decline on record, after India’s markets regulator requested it pay back-pay fees charged on derivatives contracts. The Securities and Exchange Board of India has asked BSE, the country’s second biggest exchange operator after privately-held National Stock Exchange of India Ltd., to pay as much as $20 million in fees. The additional charges are being calculated on the notional turnover of derivative contracts instead of the value of the premium paid against such wagers, according an exchange filing.

https://jlne.ws/3xRb7Vw

AI Faces Its ‘Oppenheimer Moment’ During Killer Robot Arms Race; Civilian, military and technology leaders convene Vienna talks; Artificial intelligence weapons defy traditional arms control

Jonathan Tirone - Bloomberg

Regulators who want to get a grip on an emerging generation of artificially intelligent killing machines may not have much time left to do so, governments were warned on Monday. As autonomous weapons systems rapidly proliferate, including across battlefields in Ukraine and Gaza, algorithms and unmanned aerial vehicles are already helping military planners decide whether or not to hit targets. Soon, that decision could be outsourced entirely to the machines.

https://jlne.ws/3UBSwWp

Hong Kong stock exchange fights to regain investors’ faith; New team faces steep challenge as high-profile listings sink

Chan Ho-him and Cheng Leng and Jennifer Hughes - Financial Times

If Carlson Tong is lucky, he may just have picked the right time to take over as chair of the Hong Kong stock exchange and try to revive animal spirits in the city that likes to bill itself as Asia’s financial centre. In the week in which the board endorsed his appointment, Hong Kong’s benchmark Hang Seng index rose 8.8 per cent, its best weekly performance since late 2011.

https://jlne.ws/3JCKzdm

New York Must Fight to Compete With Cities Worldwide, Dimon Says

Hannah Levitt - Bloomberg

New York City is “obviously the financial center of the world,” but needs to stay competitive to keep that title, according to JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon. “No one has the right, in my view, to think they have a divine right to success,” Dimon said Tuesday at the Economic Club of New York. “You’ve seen it with cities, you’ve seen it with governments, you’ve seen it with countries — people go the wrong way.”

https://jlne.ws/44oqnFQ

ICE Reports Record Open Interest of Over 94 Million Contracts across Futures and Options including Record Open Interest in Energy and Commodities

Intercontinental Exchange, Inc.

Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of technology and data, today announced that its global futures and options markets reached record open interest (OI) of over 94 million contracts on April 24, 2024, up 26% year-over-year (y/y), including record OI in commodities of 66.3 million and record energy OI of 62 million, with energy up 30% (y/y). “ICE has been focused on building a global commodities and energy trading platform for over two decades, designed to serve the needs of an evolving commercial customer base,” said Trabue Bland, SVP, Futures Exchanges at ICE. “The record depths of liquidity truly highlight the benefit our clients are finding in the contracts we provide, that allow for both flexibility and precision hedging across our benchmark derivatives products.”

https://jlne.ws/4dfKGct

World War II History Haunts Attempts to Seize Russian Assets; Berlin has emerged as an opponent of plans to seize frozen Kremlin funds for reconstruction and military support of Ukraine

Bojan Pancevski and Laurence Norman - The Wall Street Journal

The specter of World War II is haunting Western attempts to seize Russian assets and funnel them to Ukraine’s defense against Moscow. Berlin has emerged as one of the fiercest opponents of the U.S.-led push to commandeer some of the nearly $300 billion of Russian central-bank assets that were frozen at the start of Russia’s war on Ukraine. Germany fears that seizing, rather than freezing, the funds could create a precedent and inspire new claims against them for WWII-era crimes.

https://jlne.ws/3Qq1y6t

How Europe solved its Russian gas problem; The bloc has avoided an energy crisis, but the short-term solutions could harm competitiveness and the green transition down the line

Alice Hancock and Shotaro Tani - Financial Times

Wilhelmshaven has long been a strategic port for Germany, initially a stronghold for 14th-century pirates and later a major trade and naval base. However, in 2022 the North Sea coastal town took on a new role. It became home to Germany’s first floating gas terminal, a vital artery for gas supplies to keep power flowing both at home and across Europe at a time when the continent was coming perilously close to running out. The infrastructure for the terminal was constructed in just 10 months as Russia slashed pipeline gas supplies to the EU after its invasion of Ukraine, threatening shortages and blackouts. It receives natural gas cooled to its liquid form, regasifies it and then sends it into mainland Europe’s sprawling network of gas pipelines.

https://jlne.ws/49YWHQw

Traders Snared in Yen ‘Bingo’ as Manic Swings Ruin Japan Holiday; Trading volumes surged to around five times more: Capital.com; Yen has rebounded strongly after sliding past 160 earlier

Ruth Carson and Yumi Teso - Bloomberg

Kyle Rodda was on the 34th floor of the Capital.com office in Melbourne when the yen suddenly plunged to around 160 per dollar early in the Asia day. The trading floor exploded. “It was much like a game of bingo — everyone shouting 160 all of a sudden,” said Rodda, a strategist who was sitting among six dealers who saw yen trading volumes surge to around five times more than normal. “Everyone was trying to buy the dip for the next push and trading was going both ways — it was pretty wild.”

https://jlne.ws/4aTdshf

Why UK Giants Should Think Twice Before Ditching London Listing; Switching to New York is expensive and complicated, and there’s no guarantee of a higher stock price.

Marcus Ashworth - Bloomberg

The sorry state of Britain's equity markets has been well-documented. Across all UK indexes there have been just three initial public offerings so far this year after over 100 de-listings in 2023. The noise that this is only the beginning is getting louder. As my Bloomberg Opinion colleague Javier Blas wrote recently, there's a real threat of Shell Plc, with the highest market capitalization on the UK gauge, exiting, with other giants possibly following. US equity valuations make it hard to argue for staying put.

https://jlne.ws/44hvBDd

Scotland’s offshore wind ambitions are at a crossroads amid global competition - Jeremy Grant; A Scot kicked off the renewables revolution but the rest of the world is catching up, says Jeremy Grant

Jeremy Grant - The Scotsman

Next month, a blue plaque commemorating James Blyth will be unveiled in a village set in the rolling fields of Aberdeenshire. Blyth was an electrical engineer who developed the first turbine capable of producing electricity from wind power, and his home in Marykirk became the first building to be powered by wind-generated electricity in 1887.

https://jlne.ws/3y4FFmK

A Market Lesson: ‘To Sell to Somebody Else, It's Got to Be Irresistible’; In uncertain markets, Peter Borish of Computer Trading watches the ‘seven Cs’ of commodities

David Westin - Bloomberg

The problem with averages. Global Wall Street was focused on inflation again this week, particularly after economic data pointing to more inflation than we thought and lower growth. Peter Borish of Computer Trading thinks the Fed is boxed in by rising prices (including for commodities) and a potentially weak consumer. He keeps a close eye on the prices of the “seven C’s”: cattle, coffee, corn, copper, crude, cotton and cocoa. And though he notes that the S&P 500 averages a 10% drop each year, he’s mindful of the old adage about “the 6-foot man that drowns in water an average height of 5 feet.”

https://jlne.ws/3JEKu8Y

Shell earns $1 billion a year from US crude trading, court filing shows

Arathy Somasekhar and Ron Bousso - Reuters

Financial details of Shell's vast oil and gas trading business are some of the company's closest-held secrets. Documents in a lawsuit filed by a former employee, however, revealed its U.S. crude trading regularly earns around $1 billion every year. Testimony by a former head of Shell's U.S. crude trading division filed in a Texas state court has offered a rare look at the huge profits of its trading operations and the multi-million dollar bonuses bestowed on traders.

https://jlne.ws/3JCseNF

Goldman to Bankers: No Sneaky Trips to Paris During Olympics; Bankers must get approval for Paris trips in summer months; French capital to lure more than 15 million sport enthusiasts

Denise Wee and Alexandre Rajbhandari - Bloomberg

For Goldman Sachs Group Inc. staff looking to set up meetings in Paris to stealthily catch the Olympics — the bank is on to you. The Wall Street giant has told employees in an email that any trips to the French capital city between July 24 and Aug. 14 must first get approval from its finance department. Managers aim to nix any meetings set up so bankers can attend the plethora of sporting events with the firm picking up part of the tab.

https://jlne.ws/44iDHeA

MicroStrategy’s Saylor Reaps a Stock Windfall During Bitcoin’s Record Run; Bitcoin proxy has outperformed the cryptocurrency this year; The firm is ‘a retail magical belief stock,’ Campbell says

Olga Kharif and Tom Contiliano - Bloomberg

Michael Saylor’s decision back in 2020 to start buying Bitcoin has paid off in spades this year for the co-founder and executive chairman of MicroStrategy Inc. Saylor has garnered an estimated $400 million or so from pre-planned daily sales of about 5,000 shares of the enterprise software company from January through last week, based on data compiled by Bloomberg. The share sales follow the exercising of options awarded in 2014 that were set to expire. The stock has doubled this year to around $1,280, surpassing the record-setting gains of the original cryptocurrency during the same period. At the end of 2014, MicroStrategy was trading at around $160.

https://jlne.ws/3QpwyDI

Supreme Court Rejects Musk’s ‘Twitter Sitter’ Appeal in SEC Win

Greg Stohr - Bloomberg

The US Supreme Court rejected an appeal from Elon Musk in his “Twitter sitter” case, leaving intact his agreement with the Securities and Exchange Commission to have an in-house lawyer pre-approve his social media posts about Tesla Inc. The justices, without comment, refused to hear contentions from the Tesla chief executive officer that the accord he signed in 2018 now violates his constitutional free speech rights.

https://jlne.ws/3UgfRM9

Oil Producers Flush With Cash Cut Reliance on Funding Markets; Demand for bank loans fell in 2022 and again in 2023; The drop occurred after two years of rising oil prices

Tim Quinson - Bloomberg

Last year, the demand for loans from fossil-fuel companies fell 6% year-on-year and that followed a decline of 1% in 2022. From a climate perspective, this may sound like good news because the drop in bank lending to oil, gas and coal companies should mean less investment and less production over time.

https://jlne.ws/3Wf2Rcf

Ukraine Invasion

News about the invasion of Ukraine by Russia and its military, economic, political and humanitarian impact

Putin is using 'nuclear blackmail' — and Russia defeating Ukraine could spark global chaos and economic disaster, Jamie Dimon warns

Theron Mohamed - Business Insider

A Russian victory in Ukraine could throw the world into disarray, transform the global economy, and trigger nuclear proliferation and further conflicts, Jamie Dimon warned. "It could be a potential disaster," the JPMorgan CEO told The Wall Street Journal this week. Dimon emphasized that Russia has invaded a free, democratic nation and threatened nuclear war to deter resistance.

https://jlne.ws/49VvBdd

US buys 81 Soviet-era combat aircraft from Russia's ally for less than $20,000 each, report says

Rebecca Rommen - Business Insider

The US has purchased 81 Soviet-era combat aircraft from Kazakhstan for $1.5m, the Kyiv Post reports. Kazakhstan, a historic ally of Russia, is engaging more with Western nations. The planes may be used for spare parts or deployed as decoys in conflict regions.

https://jlne.ws/4aTprM1

Ukrainian 'Grandpa' leads over-60s unit fighting Russian forces for free

Serhiy Chalyi - Reuters

Oleksandr Taran's mobile artillery unit isn't officially part of Ukraine's military, but that hasn't stopped his men from destroying Russian targets on their own dime. "We ... get by thanks to the pension fund," the 68-year-old commander - whose call sign is "Grandpa" - said with a chuckle. Taran's all-volunteer unit, the Steppe Wolves, is comprised of dozens of Ukrainian men mostly over 60 years old who are considered too old to be drafted but still want to fight.

https://jlne.ws/4bbxNhJ

Western banks in Russia paid eur 800mn in taxes to Kremlin last year; Figure represents a fourfold increase on prewar levels and comes as profits jump at European lenders still in the country

Euan Healy and Anastasia Stognei - Financial Times

The largest western banks that remain in Russia paid the Kremlin more than eur 800mn in taxes last year, a fourfold increase on prewar levels, despite promises to minimise their Russian exposure after the full-scale invasion of Ukraine. The seven top European banks by assets in Russia — Raiffeisen Bank International, UniCredit, ING, Commerzbank, Deutsche Bank, Intesa Sanpaolo and OTP — reported a combined profit of more than eur 3bn in 2023.

https://jlne.ws/4dh564Q

Russian GPS jamming threatens air disaster, warn Baltic ministers; Interference with navigation signals blamed on Moscow has forced two Finnish flights to turn around mid-journey

Richard Milne - Financial Times

Baltic ministers have warned that GPS jamming blamed on Russia risks causing an air disaster after the interference with navigation signals forced two Finnish flights to turn around mid-journey. The foreign ministers of Estonia, Latvia and Lithuania all warned separately at the weekend of the dangers of GPS jamming across the Baltic Sea region, which has increased in recent weeks.

https://jlne.ws/4aWiQ3g

Ukraine-Russia war live: Putin’s troops advance amid North Korea concern at US giving Kyiv long-range missiles; Ukrainian troops have fallen back from three villages as fierce fighting continues

Namita Singh, Maryam Zakir-Hussain - Independent

Kyiv’s troops have been forced back amid intense fighting in eastern Ukraine as Vladimir Putin’s soldiers advanced along the frontline. Oleksandr Syrsky, commander-in-chief of Ukraine’s armed forces, said troops had retreated from three villages to new positions west of Berdychi and Semenivka, both north of Avdiivka.

https://jlne.ws/49WU7dS

Ukraine Bets on Long-Range Drones, Raising Costs of War for Russia; The country is doubling down on a campaign of strikes on Russian oil refineries, airfields and logistics

Isabel Coles - The Wall Street Journal

Inside a hangar tucked away in western Ukraine, dozens of workers in protective clothing mold fiberglass mesh and assemble the pieces into potent weapons: long-range drones. With a range of up to 500 miles, the drones made here are designed to meet surging demand as Ukraine ramps up a campaign of strikes deep inside Russian territory in the third year of the war.

https://jlne.ws/3QiBmKP

ISRAEL/HAMAS CONFLICT

News about the recent (October, 2023) conflict between Israel and Hamas

Israel Appears to Soften Stance in Cease-Fire Talks

The New York Times

Israel has reduced the number of hostages that it wants Hamas to free during the first phase of a new truce in Gaza, according to three Israeli officials, offering a hint of hope for cease-fire negotiations that could restart as soon as Tuesday. For months, Israel had demanded that Hamas release at least 40 hostages - women, older people and those who are seriously ill - in order to secure a new truce. Now the Israeli government is prepared to settle for only 33, according to the officials, who spoke on condition of anonymity in order to discuss the sensitive matter.

https://jlne.ws/3JFNL7Y

What We Know About the Mass Graves Uncovered in Gaza

Jason Kao, Raeedah Wahid - Bloomberg

United Nations officials are calling for independent investigations after hundreds of bodies were recovered earlier this week from mass graves within two Gaza hospitals. Following the withdrawal of the Israeli military in early April, more than 400 bodies have been found at multiple grave sites near the Nasser Medical Complex in Khan Younis, in southern Gaza, and at Al-Shifa Hospital in Gaza City, according to the Palestinian Civil Defense and the UN.

https://jlne.ws/4bf5X47

EXCHANGES, OTC & CLEARING

Top news from exchanges, clearing, settlement and trade execution facilities

Australia’s largest stock exchange could list approved spot bitcoin ETFs by end of 2024: Bloomberg

Danny Park - The Block

Australia’s ASX stock exchange is expected to list its first approved batch of spot bitcoin exchange-traded funds by the end of 2024, according to Bloomberg. Its report, citing sources familiar with the matter, noted that several issuers, including VanEck and local firms BetaShares and DigitalX, have already submitted their ETF applications earlier this year.

https://jlne.ws/4bg8w5Q

Eurex to strengthen European green bond segment with new GC Pooling Green Bond Basket

Eurex and Deutsche Boerse

The new GC Pooling Green Bond Basket allows standardized re-use of green bonds for secured funding. Offering will further strengthen the increasing market for green bonds in the European Economic Area (EEA). On 29 April 2024, Eurex launched an additional Green Bond Basket in its GC Pooling segment. This will increase liquidity and efficiency in the European repo market for green bonds, thus strengthening the green bond segment.

https://jlne.ws/3y7llkE

ICE to Provide OTC Derivatives Pricing and Risk Management Solution to Multinational Mining and Metallurgy Company Eramet S.A.

Intercontinental Exchange

Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of technology and data, today announced that Eramet S.A., a leading French multinational mining and metallurgy company, has selected ICE’s Portfolio Analytics platform to support pre-trade price discovery, end of day valuation for derivatives, and foreign exchange (FX) risk management. “By using ICE’s Portfolio Analytics offering for derivatives, we are able to analyze holdings at both a single security and portfolio level, which can help support informed decision-making and risk mitigation strategies,” said Nicolas Noel, Group Treasury and Financing at Eramet S.A.

https://jlne.ws/4a2fgDs

FINTECH

A roundup of today's market tech news and a look at tomorrow's disruptors

Apple’s iPad Hit by EU’s Digital Dominance Crackdown; Company has six months to comply with raft of new rules; Apple’s mobile iOS, App Store and Safari already targeted

Samuel Stolton - Bloomberg

Apple Inc.’s iPad has been added to a list of Big Tech products and services hit by strict new European Union rules aimed at stopping potential competition abuses before they take hold. The move means Apple has six months to make sure its tablet ecosystem complies with a raft of preemptive measures under the EU’s flagship Digital Markets Act.

https://jlne.ws/3y6metN

Exchange Data International Introduces the Dividend Calendar

Exchange Data International

Exchange Data International (EDI), a leading provider of financial data solutions, announces the launch of its Dividend Calendar, an essential tool designed to empower investors with timely and comprehensive dividend tracking capabilities.

https://jlne.ws/3WjrPav

The Financial Times and OpenAI strike content licensing deal; Agreement comes as Microsoft-backed start-up seeks data from reliable sources to train latest artificial intelligence models

Madhumita Murgia - Financial Times

The Financial Times has struck a deal with OpenAI to train artificial intelligence models on the publisher’s archived content, in the latest agreement between the Microsoft-backed start-up and a global news publisher. Under the terms of the deal, the FT will license its material to the ChatGPT maker to help develop generative AI technology that can create text, images and code indistinguishable from human creations.

https://jlne.ws/4bdqJBh

Unicorns-Backed Norrsken22 Bets on Africa’s Fintech Boom; Fund plans to back 20 African companies by next year from six; Expects surge in foreign capital into Africa’s startups

Adelaide Changole - Bloomberg

Africa’s technology and startup firms are becoming too attractive for international investors to ignore, according to a partner at a fund focused on investments in the continent. “We’re already seeing some investors, especially I would say even in the first quarter of this year, really looking at investing large tickets in Africa businesses,” said Lexi Novitske, a general partner with Norrsken22, a $205 million Africa-focused fund. “It’s because they’re seeing healthier numbers in a lot of these companies than they’re seeing in their own market,” she told Bloomberg.

https://jlne.ws/44n8M12

Investors Are Showering AI Startups With Cash. One Problem: They Don’t Have Much of a Business; Some startups are raising hundreds of millions of dollars before having a product or revenue

Berber Jin - Bloomberg

Artificial intelligence startup Imbue has hoodies branded with its circular orange logo, an office in the heart of San Francisco and marquee investors who lavished the company with more than $210 million. Work and life blend together for its few dozen employees, who share their emotions with one another at a weekly event called “Feelings Friday” to build trust and connection.

https://jlne.ws/3UBKxsp

In Race to Build A.I., Tech Plans a Big Plumbing Upgrade; The spending that the industry’s giants expect artificial intelligence to require is starting to come into focus — and it is jarringly large.

Karen Weise - The New York Times

If 2023 was the tech industry’s year of the A.I. chatbot, 2024 is turning out to be the year of A.I. plumbing. It may not sound as exciting, but tens of billions of dollars are quickly being spent on behind-the-scenes technology for the industry’s A.I. boom. Companies from Amazon to Meta are revamping their data centers to support artificial intelligence. They are investing in huge new facilities, while even places like Saudi Arabia are racing to build supercomputers to handle A.I. Nearly everyone with a foot in tech or giant piles of money, it seems, is jumping into a spending frenzy that some believe could last for years.

https://jlne.ws/3WloTtY

Apple Intensifies Talks With OpenAI for iPhone Generative AI Features; The iPhone maker has also been holding discussions with Google; Negotiations center on powering AI chatbot in iOS 18 update

Mark Gurman - Bloomberg

Apple Inc. has renewed discussions with OpenAI about using the startup’s technology to power some new features coming to the iPhone later this year, according to people familiar with the matter. The two companies have begun discussing terms of a possible agreement and how the OpenAI features would be integrated into Apple’s iOS 18, the next iPhone operating system, said the people, who asked not to be identified because the deliberations are private.

https://jlne.ws/44mQVqH

Should Government Be Allowed to Regulate AI?

John Edwards - Information Week

Governments regulate lots of things. The list is almost endless: radio spectrum allocations, firearms, property use, pharmaceuticals, factory emissions, nuclear power, and on and on and on. In the US, a government leader even talks about regulating food product package sizes. So, should AI be next on the regulation list? Expert opinions vary.

https://jlne.ws/4byr2XF

CYBERSECURITY

Top stories for cryptocurrencies

Vomiting frogs and other ‘dust’ prove vexing for US bitcoin ETFs; Several funds have received valuable tokens that they did not buy and cannot sell

Will Schmitt - Financial Times

US exchange traded funds that invest directly in bitcoin are building up stores of digital assets they did not buy and cannot sell after inadvertently receiving them as “gifts” attached to their cryptocurrency purchases. Digital artworks of frogs vomiting rainbows and other cartoonish imagery have shown up in bitcoin wallets run by ETF providers, including Cathie Wood’s Ark Investment Management and Bitwise Asset Management, according to analysis from blockchain analytics group Arkham Intelligence and a review of their holdings by the Financial Times. Arkham says it has also tracked more than $20,000 worth of non-bitcoin tokens that have made their way to wallets associated with BlackRock’s bitcoin ETF.

https://jlne.ws/4bccxsb

Russian Duma considers exchange ban as Beribit clients demand crypto, receive chocolate

Zack Abrams - The Block

The troubles began with reports of a raid by Russian authorities on the offices of crypto exchange Beribit at the end of March, allegely in connection to the Crocus City Hall terrorist attack. Then, Beribit, which is an officially licensed exchange in Russia, announced on Telegram that during a change in leadership, discrepancies in the company's financials were found and an audit had to be undertaken. Now, tensions appear to have boiled over, with more than fifty Beribit clients occupying the exchange's offices, demanding over $4 million of their funds back, according to Russian-language news site Gazeta.Ru. Videos circulating on social media show customers being given chocolate instead, alongside promises that deposits would be resolved within 1-15 days.

https://jlne.ws/3UEagkf

Internet Computer founder says crypto has 'snake-oil’ problem

RT Watson - The Block

Dfinity Foundation's Dominic Williams doesn't pull any punches when asked to give his thoughts on the world of crypto and blockchain, an area he's been working in for roughly a decade. "It's gotten to a place where people actually invest in snake oil. Like, 'who's got the best snake oil, I'm going to invest in that because their marketing is better,'" Williams recently told The Block. "Today there's a lot of confusion and people are just buying into these narratives. And I think that's the biggest challenge facing the industry today.”

https://jlne.ws/3JBFj9Q

Bernstein says slowing Bitcoin ETF flows are a 'short-term pause,' maintains $150,000 price target

James Hunt - The Block

Analysts at research and brokerage firm Bernstein aren’t worried about the slowing spot bitcoin exchange-traded fund flows, expecting the trend to be a “short-term pause” before bitcoin resumes its bull run toward their $150,000 target by the end of 2025.

https://jlne.ws/3UCViuE

Bitcoin ETF Bandwagon Heads to Australia After $53 Billion Haul in US; Australia’s top exchange expected to approve the ETFs in 2024; Self-managed pension assets could flow into the new products

Richard Henderson - Bloomberg

Australia is set for a wave of Bitcoin exchange-traded fund launches, following in the footsteps of the US and Hong Kong, as issuers like Van Eck Associates Corp. and BetaShares Holdings Pty line up for listings. ASX Ltd., which handles around four-fifths of the country’s equity trading, is expected to approve the first spot-Bitcoin ETFs for the main board before the end of 2024, according to people familiar with the matter, who asked not to be identified as the information is private.

https://jlne.ws/3UBIfJM

Franklin Templeton lists Ethereum ETF on DTCC; The DTCC listing does not guarantee SEC approval of Franklin’s spot Ether ETF application.

CoinTelegraph

Asset management firm Franklin Templeton has listed its spot Ether exchange-traded fund (ETF) — the Franklin Ethereum TR Ethereum ETF (EZET) — on the Depository Trust and Clearing Corporation (DTCC) website, a significant platform for securities transactions in the United States. The DTCC website’s “Create/Redeem” column lists the ETF, indicating its availability for creation and redemption. The listing of the Franklin Templeton Ethereum spot ETF on the DTCC website does not mean Franklin's spot Ether ETF application to the United States Securities and Exchange Commission (SEC) will be approved.

https://jlne.ws/3w3EtQd

REGULATION & ENFORCEMENT

Stories about regulation and the law.

Will Government Regulate U.S. Hydropower to Death? Electricity demand is spiking.

WSJ opinion

Your editorial “Texas Gets a Spring Energy Scare” (April 16) underscores the need for a diversified energy grid. The January cold snap in the Pacific Northwest revealed the pivotal role of hydroelectric power in maintaining grid reliability. As wind turbines froze and solar panels went dark, the region’s hydropower prevented a potential grid collapse.

https://jlne.ws/3UBVV7A

SEC Charges Former BP Employee With Insider Trading on TravelCenters Deal

Ben Glickman - The Wall Street Journal

The U.S. Securities and Exchange Commission on Friday charged a former BP employee with insider trading related to the company's acquisition of TravelCenters of America, the second charge related to the deal. The SEC alleged that Kevin Crotty, a Chicago-area resident who was formerly a senior manager at the oil company, bought shares of TravelCenters after learning of BP's $1.3 billion buyout from a colleague.

https://jlne.ws/3y4NWah

Cancelled - CFTC Open Meeting for April 29

CFTC

The Commodity Futures Trading Commission Open Meeting scheduled for Monday, April 29, 2024 has been cancelled. The matters under consideration are being resolved through the Commission’s seriatim process.

https://jlne.ws/3JJwHxO

Federal Court Orders Unregistered Pool Operator and its President to Pay Over $11 Million for Forex Fraud

CFTC

The Commodity Futures Trading Commission today announced Judge Linda V. Parker of the U.S. District Court for the Eastern District of Michigan issued an order of default judgment and a permanent injunction against Darren Robinson, a former resident of Miami, Florida, and his firm The QYU Holdings Inc. (QYUHI), a Wyoming corporation with a purported principal place of business in Dallas, Texas. The order bans Robinson and QYUHI from trading in any CFTC-regulated markets and registering with the CFTC. It also requires them to pay, jointly and severally, $5,923,515.37 in restitution to defrauded victims and a $5,923,515.37 civil monetary penalty in connection with a fraudulent foreign currency (forex) scheme.

https://jlne.ws/4bhqiGd

ASIC releases summary document for identifying and supporting First Nations consumers experiencing financial abuse

ASIC

ASIC has published a summary document on building an understanding of First Nations consumers experiencing, or at risk of, financial abuse following a virtual workshop hosted on 14 March 2024. The workshop with financial services industry representatives explored how industry can adopt community led solutions to support consumers.

https://jlne.ws/3JCWSGA

POLITICS

An overview of politics as it relates to the financial markets

Wall Street Has Spent Billions Buying Homes. A Crackdown Is Looming; Lawmakers say investors that scooped up hundreds of thousands of houses to rent out are driving up home prices

Will Parker - The Wall Street Journal

Wall Street went on a home-buying spree. Now, more lawmakers want to stop it from ever happening again. Democrats in the U.S. Senate and House have sponsored legislation that would force large owners of single-family homes to sell houses to family buyers. A Republican’s bill in the Ohio state legislature aims to drive out institutional owners through heavy taxation.

https://jlne.ws/3JFpyPi

How TikTok Lost the War in Washington; Combination of coordinated efforts by its critics and missteps by the company led to the law forcing a sale or ban of the popular app

Georgia Wells and Kristina Peterson - The Wall Street Journal

TikTok spent the past four years trying to fend off a U.S. ban, but it never figured out Washington. The law signed by President Biden on Wednesday requiring a sale or ban of the popular app was in part the product of tectonic shifts in U.S.-China relations and coordinated, stealthy efforts by its critics on Capitol Hill.

https://jlne.ws/3WkJ9fk

Harvard, Yale Students Shout ‘Divest!’ at Unyielding Universities; Schools reject calls to sever financial ties with Israel; Students demand disclosure on endowment holdings as first step

Janet Lorin, Eliyahu Kamisher, Katia Porzecanski, and Maxwell Adler - Bloomberg

A cause celebre is ringing out across Harvard Yard, Columbia’s South Lawn, Yale’s Beinecke Plaza and UC Berkeley’s Sproul Plaza: Disclose and divest. And university students say they won’t stop protesting against Israel until that demand is met. “We’re willing to risk suspension, expulsion and arrest, and I think that that will put pressure,” said Malak Afaneh, a law student at University of California, Berkeley, and a protest organizer.

https://jlne.ws/3UC3YBt

Biden Strategy to Tame Gas Prices Is in Peril as Iran Sanctions Pressure Mounts; The cost of gas at the pump is already up 18% this year, but Congress is urging tougher sanctions enforcement.

Jennifer A Dlouhy and Ari Natter - Bloomberg

With only six months to go before the election, President Joe Biden’s strategy to lower gasoline prices is in jeopardy. The administration’s soft approach to sanctions on oil from Iran, Russia and Venezuela has been key to its efforts to tame fuel costs. But that leniency is becoming politically riskier: Iran’s attack on Israel has intensified pressure on Biden to crack down on crude exports from the Islamic Republic. The OPEC member produces approximately 3 million barrels a day, equivalent to about 3% of global supply. And though Iranian crude might not find its way into US gasoline tanks, its presence generally helps to limit price gains.

https://jlne.ws/3JGA20E

Europe and the UK Need to Be on a Full War Footing; Relying on the US for the defense of NATO is short-sighted.

Martin Ivens - Bloomberg

The ink was barely dry on US President Joe Biden’s signature of a long delayed Congressional bill to aid Ukraine when artillery and air-defense interceptors were hurriedly dispatched to Kyiv at the beginning of the week. This new consignment represents a stay-of-execution for Ukraine’s Volodymyr Zelensky and his European allies, but it’s unlikely to turn the tide against numerically superior Russian invaders. American presidents since John Kennedy have railed against Europe’s meager contribution to its own defense. Donald Trump, however, really seems to mean it. Europe needs to swiftly start taking its military responsibilities more seriously — and not just because of the risk of the former president retaking the White House in November.

https://jlne.ws/4aUg8LP

EU to probe Meta over handling of Russian disinformation; Regulators set to express concern over insufficient moderation of political ads that risk undermining electoral process

Javier Espinoza - Financial Times

Brussels is set to open a probe into Meta’s Facebook and Instagram as soon as Monday over concerns the social media giant is failing to do enough to counter disinformation from Russia and other countries. Regulators suspect that Meta’s moderation does not go far enough to stop the widespread dissemination of political advertising that risks undermining the electoral process, the European Commission is expected to say on Monday, two people with knowledge of the matter said.

https://jlne.ws/3xToyEp

Nine accused of violent coup plot face treason trial in Germany; Case in Stuttgart highlights threat to democracy from far-right extremists

Guy Chazan - Financial Times

Nine men went on trial in Stuttgart on Monday charged with high treason and plotting a violent coup d’état, in a case that has highlighted the threat posed to Germany’s democratic institutions by far-right extremists. The case in Stuttgart is the first of three mammoth trials of 27 people in total. They are accused of conspiring to overthrow the German government, install the aristocrat Heinrich XIII Prince Reuss as national leader and declare martial law.

https://jlne.ws/3UiH3tI

Russia Extends Mandatory FX Sales Through April 2025

Bloomberg News

Russia has extended mandatory FX sales for major exporters by one year, a decision the government said will help to maintain a stable ruble. The Russian government has kept the main parameters broadly unchanged: requirements still apply to 43 groups of exporter companies, which are obliged to credit at least 80% of FX proceeds to the accounts at Russian banks within 120 days of receiving the funds.

https://jlne.ws/3xWyI7z

INVESTING & TRADING

Today's top stories from equities, indices and FICC (fixed income, currencies and commodities)

The crippling home insurance crisis hitting America; While climate is changing, the model for insurance has not

Rana Foroohar - Financial Times

It’s no secret that there’s a housing crisis in America. Shelter has accounted for the bulk of core inflation over the past couple of years. But even if you can afford a home, you may not be able to insure it. The cost of homeowner’s insurance in the US rose 23 per cent from January 2023 to February 2024, even as coverage in many places is decreasing. In hurricane-prone Louisiana, premiums were up 63 per cent. States such as Florida are becoming uninsurable, as providers pull out of the market altogether.

https://jlne.ws/4aSoHXy

Vedanta Seeks Deals With Traders to Help Fund Zambia Copper Mine; Firm is also said to weigh sale of minority stake in Konkola; Zambia agreed last year to resolve legal dispute with Vedanta

Archie Hunter and William Clowes - Bloomberg

Vedanta Resources Ltd has approached trading houses as it seeks to raise capital to revive the Konkola copper mining and smelting complex in Zambia. Billionaire Anil Agarwal’s Vedanta has discussed tolling and prepayment facilities with commodity traders, including Mercuria Energy Group, for output from Konkola Copper Mines Plc, according to people familiar with the matter. It’s also examining the sale of a minority stake in KCM as it explores ways to pay off creditors and invest in the mines that entered provisional liquidation in 2019, the people said, asking not to be identified because the talks are private.

https://jlne.ws/3QmZvQI

Japan Opts to Keep Traders in Dark on Whether It Intervened; Sharp strengthening of yen prompts chatter of intervention; Move comes after yen hit 160 against dollar earlier Monday

Erica Yokoyama and Kyoko Shimodoi - Bloomberg

Japan’s top currency official opted to keep market players in the dark over whether Tokyo had intervened in the currency market Monday following a sharp move in the market that sliced 2% off the dollar-yen exchange rate. “I have nothing to say about whether or not Japan had intervened in the market,” said Masato Kanda, vice minister for international affairs, when asked by reporters if authorities had stepped into markets to prop up the yen.

https://jlne.ws/44rVRuz

Say Goodbye to Potatoes Being as Cheap as Chips; And say hello to sogflation. Poor weather conditions in Europe are hurting humble crops such as the spud.

Lara Williams - Bloomberg

Last year, the word to describe much of the spike in food prices would have been “heatflation,” as drought and high temperatures affected crop yields around the world, from olive oil in Spain (much to my colleague Javier Blas’s despair) to cabbage in South Korea. This year we’re facing a different concept, still undeniably linked to the climate crisis. Let’s call it “sogflation.” If heatflation refers to price increases as a result of excessively high temperatures, sogflation is borne out of extreme precipitation.

https://jlne.ws/4bhbRSe

De Beers Has the Diamond. Could It Find a Bride? Mining company Anglo American is considering offloading its storied diamond unit. It won’t be an easy sell.

Andrea Felsted - Bloomberg

A diamond is forever. But perhaps not for De Beers’ owner Anglo American Plc. Facing a $39 billion bid from mining giant BHP Group Ltd, the London-listed company is considering offloading the diamond unit, the Wall Street Journal reported last week. Like marketing a stone without the requisite color or clarity, this wouldn’t be an easy sell.

https://jlne.ws/3UzZz1Q

BHP Mega Bid and $10,000 Copper Expose Mining’s Biggest Problem; Spending on new copper mines has declined in recent years; CRU says more than $150 billion is needed to plug supply gap

Mark Burton - Bloomberg

Copper’s surge to $10,000 a ton just days after the bombshell news that BHP Group is trying to buy Anglo American Plc is highlighting a core disconnect at the heart of the industry: miners just aren’t building enough mines. The biggest producers all want to increase copper output to take advantage of rising demand in electric vehicles, grid infrastructure and data centers. BHP has made its $39 billion proposal to buy Anglo American in large part because the world’s biggest miner wants to grow in copper.

https://jlne.ws/3wd0Hzb

Forget Moonshots. Investors Want Profit Now; CEOs might resist the new investor mantra of Show Me the Money—but if they do, their share price is likely to suffer

James Mackintosh - The Wall Street Journal

Elon Musk got the market’s memo. Mark Zuckerberg missed it. Cathie Wood ignored it. The message: Stop shooting for the moon, and focus on making money. Last week brought home what any competent CEO should already know about what investors want, as Tesla shares soared 12% after disappointing first-quarter results and Meta Platforms shares plunged 11% after decent first-quarter results.

https://jlne.ws/4bck8XJ

It’s Not Just the Fed Driving Up Your Mortgage Rate; Credit scores and other factors have a growing impact on borrowing costs

Ben Eisen - The Wall Street Journal

Mortgage rates are back above 7%, sending home buyers in search of ways to trim the cost of their loans. Buyers this spring say they are resigned to the fact that the Federal Reserve won’t give them a helping hand by lowering rates. The central bank, which meets this week, is likely waiting for inflation to ease first. Mortgage rates tend to track the 10-year Treasury yield, which has risen for four straight weeks.

https://jlne.ws/4aRgdje

Muni Regulator Flags Risks of Buying Build America Bonds; Refinancings can saddle investors with losses as bonds called; MSRB says a number of the bond issues trading above par value

Nic Querolo and Amanda Albright - Bloomberg

The municipal-bond market’s regulator published a note highlighting the risks of buying Build America Bonds that are trading at more than 100 cents on the dollar, which expose investors to potential losses as governments increasingly buy them back under refinancings. The securities were sold in 2009 and 2010 through a federal program that was aimed at helping to pull the economy out of its slump by increasing state and local government spending on infrastructure. The federal government subsidizes some of the interest bills on the bonds instead of making the interest tax-exempt, as is the case with traditional municipal securities.

https://jlne.ws/3xYHemr

Environmental, Social and Corporate Governance

Stories about environmental, social and governance investing

Calstrs reveals problems calculating carbon footprint of its $331bn portfolio; Giant retirement scheme delays publication of 2023 climate report after discovering major data issues

Josephine Cumbo, Brooke Masters and Sun Yu - Financial Times

Calstrs, one of the world’s largest pension plans, has had to delay publication of its 2023 climate report after discovering inaccuracies in the way it was calculating the carbon footprint of its $331bn portfolio. The giant California public pension plan has now said it will not release its 2023 carbon emission data until 2025.

https://jlne.ws/3UBKtc6

Push for plastic waste credits at UN treaty talks; Campaign groups raise concerns that schemes will fund damaging solutions after complaints over plant involving Danone

Madeleine Speed and Adrienne Klasa - Financial Times

Companies are lobbying for credits for the reduction of plastic pollution to be allowed in the first legally binding UN plastics treaty, despite concerns by environmental groups that it will fund solutions such as the burning of waste. Danone, which owns bottled water brands Evian and Volvic, is one of the consumer groups that has explored the use of plastic credits to pay for the recovery of tens of thousands of tonnes of plastic in Indonesia, aided by the environmental offsets registry and certification group Verra.

https://jlne.ws/4dbYq8d

In the Heart of a Global Methane Hotspot, Signs of Progress; Satellite observations show the amount of gas burned at Turkmenistan’s Gates of Hell crater have fallen roughly 50% since August, according to a new analysis.

Aaron Clark - Bloomberg

Roughly half a century ago geologists exploring for hydrocarbons accidentally shattered the roof of a huge underground gas deposit opening a crater 60-meters (197-feet) wide. Rather than let the potent methane fumes leak uncontrollably, engineers eventually lit the gas on fire, presumably on the theory that it would quickly burn off. It didn’t and the site is believed to have burned continuously ever since.

https://jlne.ws/49WSLzO

Private Equity Sees the Coral Crisis as an Investment Opportunity; A portion of the UN’s Global Fund for Coral Reefs, run by Pegasus Capital, aims to raise $500 million for investments that reduce threats to coral reefs.

Coco Liu - Bloomberg

Stocks. Gold. Real estate. These are typical targets for financial professionals seeking a return on investment. But for Dale Galvin, a veteran private equity investor with millions of dollars at his disposal, the next big opportunity isn’t mainstream. It’s coral reefs. Coral reefs provide food, work and coastal protection for an estimated 1 billion people around the world. They also support economic activity worth trillions of dollars a year, including $36 billion in tourism, according to a study by the Global Coral Reef Monitoring Network. All of that is under threat as high ocean temperatures plunge the world’s corals into crisis. https://jlne.ws/3Wjoh8b

Unthinkable Revival of Nuclear Plants Is a Reality in US Shift; Restart of Michigan’s Palisades plant could lead to more reopenings.

Will Wade - Bloomberg

https://jlne.ws/49Y0RIB

Sodium Batteries From Michigan to Challenge Lithium’s Grip; Natron Energy’s batteries boast cheap materials, fast response.

David R Baker - Bloomberg

https://jlne.ws/44ooWXY

Sergey Brin-Backed Carbon Removal Startup Nears Firing Up Its New Plant; 280 Earth CEO John Pimentel will appear at Bloomberg Green Festival in July. In his first comments since taking over, he explains why he’s aiming for a moonshot.

Michelle Ma - Bloomberg

https://jlne.ws/49ZWpJp

BANKS, BROKERS & MANAGED FUNDS

The latest from banks, brokers, hedge funds and managed futures

Banks pay savers more as ‘higher-for-longer’ rates hit interest income; US lenders are having to fight to keep depositors from leaving with no Fed rate cuts in sight

Stephen Gandel - Financial Times

Deposit costs at the largest US banks rose more than interest revenue last quarter for the first time since the Federal Reserve began raising rates two years ago, as savers demanded lenders share the benefits. Wells Fargo paid nearly $594mn more in fees to depositors in the first quarter of this year than it did in the previous three months. That was far more than the $1mn the bank took in additional interest from its loans and investments in the same period.

https://jlne.ws/3WleoXA

Deutsche Bank Merger Ends Numis Dealmakers’ Boutique Freedom; London broker’s analysts are moving into new parent’s office; Some bankers say they lost advantage in fight for clients

Leonard Kehnscherper, Swetha Gopinath, and David Hellier - Bloomberg

When Deutsche Bank AG announced its takeover of the British investment bank Numis last April, some in the City of London wondered whether their cultures would mesh. A year on, changes are becoming visible. Among the deal’s biggest consequences are tighter restrictions on how Numis bankers can interact with their firm’s stock analysts.

https://jlne.ws/4dk5OOy

China’s Mega Banks Post Rare Profit Drops on Margin Squeeze; Margins shrink as banks called on to dole out cheaper loans; China’s mega banks are struggling to support the economy

Bloomberg News

Industrial & Commercial Bank of China Ltd., the nation’s largest lender, reported its first decline in quarterly profit in more than a year as margins continue to contract. Net income fell 2.78% to 87.7 billion yuan ($12.1 billion) in the first quarter, the Beijing-based bank said in an exchange filing on Monday. Its net interest margin narrowed to 1.48% from 1.61% at the end of 2023.

https://jlne.ws/44iPzgQ

PBOC Expands Warning on Bond Investments to Regional Banks; Some lenders were asked to avoid excessive long-bond holdings; Regulatory scrutiny fear has sparked correction in long debts

Bloomberg News

China’s central bank has advised some regional lenders to curtail their ultra-long bond investments to mitigate risks, people familiar with the matter said. City and rural commercial banks in at least two eastern provinces were instructed in recent weeks to avoid significant exposure to these securities, the people said, asking not to be identified as the information is private.

https://jlne.ws/3JED7yh

UBS Weighs Synthetic Risk Transfer Amid Capital Boost Proposals

Esteban Duarte, Carmen Arroyo and Myriam Balezou - Bloomberg

UBS Group AG is considering bringing a synthetic credit risk transfer to the market, according to people with knowledge of the matter, amid Swiss reform proposals that could see the bank face higher capital requirements. The lender is still assessing the type of collateral that could be used in any SRT, the people said, asking not to be identified because the matter is private. UBS may use one of the platforms that it inherited after it took over Credit Suisse last year to put together the transaction, some of the people said.

Capital levels are a poor predictor of bank failure; Regulators should be embracing much more sophisticated measures of lenders’ health

Simon Samuels - Financial Times

What do Silicon Valley Bank, Credit Suisse, Citigroup and Royal Bank of Scotland all have in common? If you guessed the answer as “they failed and had to be rescued by their competitors or by their governments” then you would be correct. But there was one other thing they had in common; strong capital ratios at the time of their failure, well above the level their regulators demanded. This is a useful reminder that for all the talk about how much capital banks need, a great deal of the discussion simply misses the point.

https://jlne.ws/4aSWBeN

Jupiter to retain £500mn of departing star manager’s fund; Merlin ‘fund of funds’ will keep half of money managed by Ben Whitmore

Emma Dunkley - Financial Times

Jupiter will retain a near £500mn in funds run by its star stockpicker Ben Whitmore who is leaving later this year, in a boost to the FTSE 250 asset manager which is facing a wave of customer withdrawals. Jupiter’s Merlin range, which operates its strategy at arm’s length from the group, has decided to keep the money invested in Jupiter Global Value when Whitmore departs at the end of July, the asset manager has confirmed.

https://jlne.ws/3UhsG8N

The trio of problems dogging Deutsche Bank's Postbank arm

Tom Sims - Reuters

Deutsche Bank has warned a protracted lawsuit claiming it underpaid for Postbank could cost Germany's largest lender up to 1.3 billion euros ($1.39 billion). Deutsche acquired the no-frills Postbank during the financial crisis seeking to broaden its reach in Germany and a steady income stream after years of rapid international expansion. Instead, Postbank has become a source of consumer complaints, regulatory scrutiny, labour strife and now, a possibly costly lawsuit.

https://jlne.ws/4djkDkz

Northern Trust Upgrades Cloud-Based Insurance Accounting and Analytics Application; Leveraging SAP S/4HANA to enable advanced data analytics and offer valuable insights for informed decision-making by insurance clients

Northern Trust

Northern Trust (Nasdaq: NTRS) announced today the successful upgrade of its SAP Financial Asset Management application to SAP S/4HANA, which further enhances its Insurance Investment Accounting and Analytics Services solution, developed to support the full spectrum of investment accounting and regulatory reporting needs for U.S. insurance companies and corporate and endowment markets.

https://jlne.ws/3xZp2Jq

Big asset managers adopt ‘vulture’ tactics in distressed debt fights; Loosening credit agreements mean traditional investors who once could avoid messy legal battles are having to evolve

Sujeet Indap and Harriet Clarfelt - Financial Times

When Invesco bought the largest chunk of $620mn of apparently low-risk loans issued by heater and air conditioner parts maker Robertshaw in 2018, it seemed just like many investments the US asset manager had made before. As a traditional, mainstream investor, Invesco was looking for debt that was likely to be repaid in full, or “par”, at maturity while also delivering an attractive coupon — unlike the more aggressive “vulture” investors that typically buy debt at knockdown prices with the intention of getting involved in complex legal fights.

https://jlne.ws/3y4rgXK

BlackRock’s Fink Set to Corral Investors at Saudi Summit; US firm is hosting event alongside the Saudi Finance Ministry; PIF governor, energy minister set to attend exclusive event

Archana Narayanan, Matthew Martin, and Silla Brush - Bloomberg

BlackRock Inc. is set to host a gathering of top corporate executives and government officials in Riyadh, marking the US firm’s first event on this scale in the Saudi capital and bolstering the kingdom’s efforts to lure foreign investment. The US firm is hosting the event alongside the Saudi Ministry of Finance, according to people familiar with the matter, who asked not to be identified discussing private information. The goal is to showcase investment opportunities and provide an overview of progress on the kingdom’s trillion-dollar Vision 2030 program, the people said.

https://jlne.ws/3wnwDkl

WORK & MGMT

Stories impacting work and more about management ideas, practices and trends.

Jamie Dimon says to get a job at JPMorgan, what you study in college ‘almost doesn’t matter’

Paolo Confino - Fortune

Any soon-to-be college grads looking to land a job at JPMorgan Chase need not worry about what they major in. Those instructions come directly from the company’s CEO Jamie Dimon. In an interview earlier this week, Wall Street Journal editor-in-chief Emma Tucker asked Dimon what a young person who wanted to work at the $556 billion financial firm should study.

https://jlne.ws/49YP8cO

McKinsey Seeks to Pump Up Partner Morale With Rap and Rock; Sternfels told partners that 2024 is a ‘turn the page’ moment; The firm is facing unprecedented challenges on multiple fronts

Ambereen Choudhury and Amy Bainbridge - Bloomberg

McKinsey & Co. sought to rally its partners with upbeat declarations and blasts of rock and rap music in Copenhagen earlier this month, attempting to boost morale during a tumultuous period for the giant consulting firm. Global Managing Partner Bob Sternfels told his fellow partners at the mid-April event that McKinsey is expecting a good 2024 after its challenges of the past 18 months. He called it a “turn the page” moment, a person familiar with the matter said.

https://jlne.ws/3WppZF7

Q&A: Thousands of American Climate Corps Jobs Are Now Open. What Will the New Program Look Like? Short answer: A lot like FDR’s Civilian Conservation Corps, one of the New Deal’s most popular programs, which put millions to work—but much more diverse.

Aynsley O’Neill - NPR Living on Earth

At an Earth Day event in Virginia just outside of Washington, D.C. this week, President Biden announced the official start of his new climate-focused jobs program. “It’s patterned after the Civilian Conservation Corps, the Peace Corps and AmeriCorps. Like them, it brings out the best in young people to do what’s best for America,” Biden said at the event. “We will put tens of thousands of young people to work at the forefront of our climate resilience and energy future, clean energy future. Today, I’m proud to announce that Americans across the country can now apply to become the first members of the American Climate Corps.”

https://jlne.ws/49W4gYj

Exxon Traders Rejecting London Move Face Job Cuts, Unions Say; Oil giant wants Brussels traders to relocate to the UK; Protests planned outside Exxon’s Belgium office Tuesday

Laura Hurst, Kevin Crowley, and Jack Wittels - Bloomberg

Some traders working for Exxon Mobil Corp. are set to lose their jobs because they don’t want to move from Brussels to London, according to a statement from its unions. The majority of Brussels-based trading staff at the oil giant said in an internal union-led survey that they won’t move to the British capital because of “uncompetitive” pay and a “lack of flexibility,” according to a joint statement from the unions. As many as 37 trading employees will get fired as a result, it added.

https://jlne.ws/3WCEiGv

WELLNESS EXCHANGE

An Exchange of Health and Wellness Information

Philips shares surge after $1.1bn settlement over sleep apnoea devices; Cost of settling litigation in US over faulty machines is less than what market had expected

Ian Johnston - Financial Times

Dutch group Philips has agreed to settle litigation linked to its machines that treat night-time breathing problems for $1.1bn, ending a long-running legal battle and sending its shares up as much as 37 per cent on Monday. The Amsterdam-listed group said it had reached a deal with plaintiffs in the US to end “uncertainty” from the litigation, without admitting liability in personal injury claims and a medical monitoring class action suit.

https://jlne.ws/3UF9Ytn

Hajj Pilgrims Get Health Boost in Bill Gates-Supported Disease Control Effort in Saudi Arabia; Gates Foundation says it will open regional office in Riyadh; Saudi Arabia commits $500 million to polio eradication program

Jason Gale - Bloomberg

Hajj pilgrims heading to Saudi Arabia in June will get a health boost under a Bill & Melinda Gates Foundation-supported disease control drive that’s part of a broader effort to eradicate polio The Gates Foundation said Sunday it will open a regional office in Riyadh to coordinate a new partnership with Saudi Arabia’s Ministry of Health to improve disease surveillance and sanitation, and assist with the manufacturing of lower-cost vaccines to improve the health and safety of millions of Muslims attending one of the world’s largest religious mass gatherings.

https://jlne.ws/3xYw1ST

Singapore Bank Fires Workers Over Misuse of Medical Claims: CNA; Hundreds of employees allegedly involved in investigation; Employees were dismissed last week, media reports say

Ishika Mookerjee and Chanyaporn Chanjaroen - Bloomberg

Bank of Singapore Ltd., the private-banking arm of Oversea-Chinese Banking Corp., has fired up to 40 employees over the misuse of medical benefits, according to a CNA report. Hundreds of employees were involved in an investigation that began last year into the misuse of insurance claims, which extended to ineligible items such as skincare products, supplements, toothbrushes and bird’s nest — a Chinese delicacy, people familiar with the matter told CNA. The news was first reported by eFinancialCareers, which said the staff were fired last week.

https://jlne.ws/44mY8qI

Start Mass Testing Dairy Workers for Bird Flu; H5N1 has spread stealthily among cows. Could it also be spreading silently in humans?

F.D. Flam - Bloomberg

Given how devastating another global pandemic would be, the US should start mass testing of dairy workers for the bird flu virus that’s spreading fast through cows. If necessary, either the Centers for Disease Control and Prevention or the US Department of Agriculture should pay people to get tested. The USDA’s recent call to test more cows isn’t going far enough. This week, scientists announced they’d found viral fragments in milk on supermarket shelves, with an alarming 58 of 150 samples testing positive. Scientists initially thought that milk from infected cows was always thick and discolored, but these results show it can look deceptively normal.

https://jlne.ws/4deYMe7

REGIONS

Stories of local interest from the Americas, EMEA and Asia-Pacific regions

Dreyfus Tops Olam With Sweetened Bid for Australia’s Namoi; Trader raises offer for outstanding shares to A$0.60; Louis Dreyfus already owns 17% of cotton processor’s shares

Keira Wright - Bloomberg

Agricultural commodities trader Louis Dreyfus Co. has sweetened its offer for Namoi Cotton Ltd. with a takeover bid that, excluding an announced dividend, values the Australian processor at A$123 million ($81 million), topping a rival proposal from a unit of Olam Group last month.

https://jlne.ws/3WiDVQW

China’s New Plan to Boost Hong Kong IPOs Faces Major Hurdles; Low valuations, lack of big listings are clouding the outlook; Beijing wants to bolster Hong Kong’s role as a finance hub

Filipe Pacheco and Manuel Baigorri - Bloomberg

China’s vow to encourage the nation’s leading companies to list in Hong Kong is helping spur a rare surge in the $5 trillion stock market, but dealmakers aren’t ready to turn optimistic. The Hang Seng Index jumped about 9% last week for its best gain since 2011 after China’s securities regulator said on April 19 that it will support initial public offerings in Hong Kong. Bourse operator Hong Kong Exchanges & Clearing Ltd. was among the biggest winners, rallying 17%.

https://jlne.ws/3xRb3Fg

Indonesian Miner Eyes Nickel Assets as it Shifts Focus From Coal; Harum sees half of its revenues coming from the metal in 2024; The firm announced a deal with China’s Tsingshan Holding Group

Eddie Spence and Fathiya Dahrul - Bloomberg

Indonesian coal company PT Harum Energy is looking to buy more nickel mines as it ceases further investment in fossil fuels in order to prepare for the energy transition. The miner plans to avoid further spending in its coal operations beyond the level required to sustain current output, President Director Ray Antonio Gunara said in an interview on Friday.

https://jlne.ws/4dlyAOT

Heavy Rains Threaten China’s Rice as Extreme Weather Grips South

Hallie Gu - Bloomberg

China is forecast to get more heavy rain in the coming days, raising concerns that early rice crops in some areas of the world’s biggest producer and consumer might get damaged. Precipitation in parts of southern China, the top growing region where rainfall has already affected plants, is likely to double normal levels in the next 10 days. Low-lying fields face the risk of floods, which could affect growth of spring crops, the weather bureau said Monday.

https://jlne.ws/3UjOYqv

Fidelity Sees Rupee as Top Carry Trade Pick on RBI’s Tight Grip; Central bank has built near-record high pile of FX reserves; Combination of high carry, low volatility appeals to investors

Ronojoy Mazumdar - Bloomberg

The Indian central bank’s tight grip on the rupee is boosting the allure of the currency for carry trades, according to Fidelity International. The rupee rewards investors with a high yield than regional peers, and together with low volatility, makes it “arguably one of the most attractive currencies on the planet,” Paul Greer, a money manager at Fidelity in London, said in an interview.

https://jlne.ws/3xYwpAR

BHP’s bid for Anglo American chips away further at London’s reputation; Company’s exit would deal another blow to City’s status as home to listed mining groups

Oliver Ralph - Financial Times

If you want diamonds, head down to London’s Hatton Garden. For musical instruments, you need to go a mile or so further west to Denmark Street. And if you want to invest in a mining company, the London Stock Exchange has historically been one of world’s top destinations. For years, the market built its reputation as the home of an array of global natural resources companies. The likes of Rio Tinto, Anglo American, Fresnillo and Antofagasta have been among the mainstays of the mining offering, while BP and Shell have led the way for the oil & gas sector.

https://jlne.ws/3UCVYjE

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