Exchange Invest Weekly 014

This was the week when the HKEX - LSE bid was brutally repudiated by a rather haughty LSE while CCP clearing was in the spotlight as the CFTC-EU spat broke out again with broad mistrust over Europe...   Transcript (links below) Ladies and gentlemen, welcome to the business of bourses, all the news that's fit to pith in a podcast. It's the Exchange Iinvest Weekly with me Patrick l Young.   Leading the news in the burse business this week. It was obviously all about Hong Kong exchanges and the London Stock Exchange group: that potential bid which was being rebuffed. And just as we were recording the previous episode of this weekly review,   The London Stock Exchange, they have rejected the Hong Kong's $39 billion takeover, albeit it's quite interesting. I mean, you take some of the analysis by the likes of Berenberg, they're talking about 82 pounds per share being essentially a fully valued, integrated definitive, in parentheses. Anybody who can fully integrate definitive is a better man than me, I suspect and indeed a better man than several generations of management at Reuters, Thomson Reuters and Refinitiv all of whom have failed at this task. And the London Stock Exchange, it has to be said aren't even very good at actually integrating their purchases. Nevertheless, of $39 billion, we were talking about something like 82 pounds: Berenburg values at 83 pounds. What's the difference? Ladies and gentlemen, I suppose it's going to be the element of cash. That's presumably why we've got the Hong Kong exchanges making a lot of moves around London at the moment. They're going to visit all of the different investors they can possibly see. And why we have had one or two investors suddenly come out and slam the deal instantaneously. In parentheses. Would you trust a man with your due diligence who actually tells you that the deal is rubbish before he's even talked to the person making the bid? I don't think so. At the same time, much is going on beneath the scenes. I laid out a lot of the well, political and indeed the basis of the deal in a post for CapX That's the central Policy Studies website, last Monday. Blocking Hong Kong's bid for LSE would be a disaster I said I'm I still fully stand by that opinion. Indeed, the Hong Kong exchange may yet be forced to go hostile. And indeed, in terms of going hostile, it's actually fair to say that the people who went hostile first were the London Stock Exchange Board themselves. In a very measured statement last weekend, “the Board of Hong Kong exchanges had hopes to enter into a constructive dialogue with the board of LSE to discuss in detail the merits of its proposal and are disappointed that LSE has declined to properly engage.” That was in response to something that seemed like well, frankly, it wasn't quite that scene in “Downfall” where the hitler character starts stabbing the map and blaming all and sundry. But nonetheless, the London Stock Exchange did absolutely nothing to demonstrate their gravitas or their history through what was actually a rather snarky sniping, aloof, arrogant and unreasonable statement. Amongst the many things they said the chairman Don Robert and his letter stated there was “no strategic merit.” Really? Frankly, for someone who's only been in the job a few months, it would be fair to say that might be a neophytes view of the stock exchange business, but clearly doesn't demonstrate a great understanding of actually the bourse parish and the many dynamics that are underpinning it. The concept that the deal would be a significant “backward step,” as the LSE also asserted: was just unnecessary language from LSE. It was a sharp and unjustified rebuke, which did not become a regulated entity, let alone a very large, multinational regulated entity with a history like the London Stock Exchan...