Transcript
This week in the parish of bourses and market structure. Well, let's just say it's been a Diverse week. My name is Patrick L. Young. Welcome to the bourse business weekly digest: It's the Exchange Invest Weekly Podcast.
Good day, ladies and gentlemen, this is a very brief reduction of highlights amongst the key headlines from the week in market structure. All the analysis of the week’s many events and happenings can be found in the Exchange Invest Daily subscriber newsletter: the unique guide to the bourse business sent daily to your inbox.
More details at ExchangeInvest.com.
Cool.
Let's begin way back when ...with the myth of innovation, it's in response to news this week, that advisors to the London Stock Exchange Group have racked up 1.1 billion US dollars in fees for the London Stock Exchange Refinitiv deal.
The story told to this day, concerning ingenuity down under may have been embellished, but it remains a pertinent morality tale on the dangers of hubris and exuberance.
In New South Wales many years ago, a man stayed in his shed to build a wondrous new racing car using his own labor. And when the southern hemisphere exited winter, the new machine was proudly shown to his many friends who gathered with a tinny of beer to toast the promise of this splendid new design.
Alas, after all the excitement of those long winter nights, the machine, while looking purposeful did nothing to repay its creator. Testing proved slow and ultimately when raced against its peers, the car delivered no decent results with a trophy cabinet left unfilled.
The car is still with us today in historic racing circles known colloquially as the WOFTAM. It's an acronym inferring that the energy input didn't remotely live up to the end results. London Stock Exchange Group has now spent the better part of $2 billion on fees without completing a deal in recent years to get this latest third deal over the line.
They've sold genuine family silver, and wasted valuable years as the progressive end of the parish ICE, Nasdaq and Hong Kong exchanges have all made palpable progress towards the future while LSEG is still chasing the dream with a flawed concept, even when it was announced. Now, the idea is dated and flawed while clearly overly costly in time spent as well as money expended.
The London Stock Exchange Group management approach simply beggars belief.
WOFTAM will likely prove a generous conclusion.
Elsewhere, one bit of good news for the London Stock Exchange Group; their London clearing house RepoClear subsidiary, welcomed an interesting first clearing member from Luxembourg... None other than ClearStream, a subsidiary of Deutsche Boerse. Of course, obviously Clearstream being a member of LCH RepoClear makes sense on a business level, but it does in and of itself rather demonstrate the vast uphill struggle facing the other DB1 subsidiary in the patch of CCP clearing, EUREX who are trying to of course, take away the Euro CCP business from the LCH itself.
Over in Australia, the competition boss, the ACCC, Rod Sims is threatening to cut the prices of PEXA - PEXA is a property settlement. And somewhat amusingly enough, it happens to have a near monopoly situation in the Australian economy. The upstart is backed by none other than our friends, the Australian Stock Exchange. They...
