Exchange Invest Weekly Podcast 027

Transcript In the wake of the Golden Globes, the new year is underway. And indeed thanks to Ricky Gervaiss epic hosting, Anything I say about the business of bourses will appear like the apotheosis of the politically correct. Welcome to Podcast 27: Exchange Invest Weekly, the first edition of 2020.   Thanks for listening, My name is Patrick L. Young founder of Exchange Invest, here's a review of some major stories over the festive period on the first week of 2020, which have been making headlines in our daily newsletter devoted to the business of bourses.    Reuters hailed an exciting exclusive, just as the New Year was dawning: China holds British stock link over political tensions. They said according to sources. Of course, it was tough immediately not to suffer some degree of schadenfreude and indeed schadenfreude was fully eclipsing my inbox at that juncture, given the evidence can be discerned that a major exchange is saddled with management tending to the myopic, having refuted the excellent Hong Kong exchanges bid last year with a haughty “Our Connect is cuter“ defense, LSE finds itself outmaneuvered on all fronts as suddenly China un friends LSEG or so it seems. Geopolitically, the LSEG “C” suite looks plotting. If not, I'd right clods.   They've already wasted vast amounts on big data but don't seem to be able to process the data which ought to have been clear to them given their impeccable analog anachronistic -  dating back to monopoly times - links to the UK Government. And let's face it, those links to the UK government are quite sublime, Fast Track mobile lines to the Prime Minister are commonplace when you're the boss of the London Stock Exchange group. Nevertheless, they didn't seem to see this coming in terms of what the Chinese might be doing to their Connect.    Ironically, some of the jingoistic protectionist lamebrains masquerading as the UK financial media, were eager to suggest home Kong Exchanges was a territorial risk for LSEG. Looks like the truth was quite the opposite. I have made a suggestion in one of my last podcasts before Christmas: we may have seen the high watermark for LSEG stock. Sadly, even in the micro short term, the Chinese government left London's legacy bourse business adrift in Asia. Instead of building the ultimate Trans Pacific Tiger from London to China via Hong Kong, LSEG has started the year on a self inflicted defensive tack in what promises to be a tough year for the group as the reality of the unreformable Refinitiv sinks in.    Of course, that was day one. By the time we got today two things had become well altogether more complex. It seemed perhaps the link was still open according to certain parties at the Chinese regulator the CSRC in China.   So it doesn't really matter: the headlines are then being written: the Wall Street Journal. “The Shanghai London Stock link is a financial white elephant.” “politics are behind the London Shanghai Stock linkage” said the Gulf News. Really truthfully Ladies and gentlemen, whether the London Shanghai Connect is open or shut, and indeed, even when it's open, it's proven a remarkably anemic link so far, users are now going to avoid the linkage in favor of the more stable Hong Kong Exchanges - China mainland links amidst the perception that LSE is a hapless passenger hostage in the UK - Sino realpolitik, Whatever the truth of the matter is somewhere along the line, somebody badly damaged the LSE’s aspirations in China. Who's going to risk paying all the money for a secondary listing when there's the possibility that the plug is being pulled, has been pulled or could be pulled, albeit as th...