June 29, 2005

 

Lead Stories

 

CME approaches CBOT with plan that would create biggest futures exchange

By Jeremy Grant in Chicago and James Politi in New York

The Chicago Mercantile Exchange has approached the Chicago Board of Trade about a combination of the two that would create the world's biggest futures exchange and pose a formidable threat to Europe's derivatives exchanges.

http://news.ft.com/cms/s/99954312-e83a-11d9-9786-00000e2511c8.html

 

CME approaches CBOT about deal - source

CHICAGO (Reuters) - Chicago Mercantile Exchange Holdings Inc. (CME.N: Quote, Profile, Research) has approached CBOT Holdings, parent of the No. 2 U.S. futures exchange, about a potential deal, according to a person familiar with the matter.

http://news.reuters.com/newsArticle.jhtml?type=topNews&storyID=8929308

 

Merc making bid for rival CBOT

BY DAVID ROEDER Business Reporter

The market for owning the Chicago Board of Trade has opened, and the Chicago Mercantile Exchange is ready to bid.  The Merc has started talks with the CBOT about a merger or acquisition, two sources with knowledge of the discussions said Tuesday. Such a deal would bring a transformation to the city's futures trading industry, which has been built around an ingrained rivalry between the two marketplaces.

http://www.suntimes.com/output/business/cst-fin-cbot29.html

 

CBOT: received interest in 'combination'

By Ros Krasny

CHICAGO (Reuters) - CBOT Holdings, fresh off a shareholder vote giving the green light for an initial public offering, said on Tuesday it has received "unsolicited, nonbinding expressions of interest in a business combination."

http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=8919361

 

CBOT in Play

http://www.fow.com/articles/foweek_article.asp?storyCode=3507

 

**** I am just not sure if this play is a comedy or tragedy.

 

CBOT Combination (Membership and Stock) Prices

Check the latest bid, offer, and last sale prices for combinations of the various series of Class B memberships in the Chicago Board of Trade (CBOT) and restricted Class A Common Stock of CBOT Holdings. For more information on CBOT memberships, please refer to http://www.cbot.com.

Prices as of June 29, 1:14 PM (CDT)
Class	Bid	Ask	Last Sale	Date
B-1 (Full) With ERP With Stock	1,900,000	1,995,000	1,900,000	6/29/2005
B-1 (Full) Without ERP With Stock	0	2,200,000	NA	6/20/2005
B-2 (Associate) With Stock	577,000	700,000	635,000	6/28/2005
B-3 (GIM) With Stock	181,000	375,000	300,000	4/28/2005
B-4 (IDEM) With Stock	61,000	81,000	79,000	6/21/2005
B-5 (COM) With Stock	145,000	185,000	165,000	6/28/2005

http://www.williamblair.com/pages/ist_cbot_grid.asp

 

NYSE Revises Records Set For Daily Share Volume, Crossing Session II Volume First 3 Billion-Share Day

http://www.nyse.com/press/1119955015618.html

 

Pacific Exchange to Add Penny

By Cynthia Schreiber Dow Jones Newswires

The Wall Street Journal

The Pacific Exchange, whose parent PCX Holdings is being acquired by Archipelago LLC, said yesterday it plans to start quoting and trading options in pennies by the fourth quarter of this year.

The proposed change, which requires regulatory approval, would make the San Francisco market the first U.S. options exchange to quote and trade in individual cents rather than nickels and dimes. The exchange said it will submit a rule filing to the Securities and Exchange Commission soon and that it hopes to receive expedited approval.

www.wsj.com

 

Reuters/Jefferies CRB Contract To Launch July 12th

http://www.nybot.com/releases/pressRelease.asp?releaseID=896

 

Jefferies: Chicago Merc. may be worth $344 w/ COBT deal

http://biz.yahoo.com/cbsmb/050629/64c2e66c7dc74f00b3ea249eb95d49d8.html?.v=1

 

SEC eases 'quiet period' rules

Companies selling stock to the public will be allowed to talk more freely under a rule approved on Wednesday in a unanimous vote by the U.S. Securities and Exchange Commission.

http://news.yahoo.com/news?tmpl=story&u=/nm/20050629/bs_nm/financial_sec_quiet_dc_1

 

Chicago Merc Stock Up on Merger Speculation

CHICAGO -- Shares in Chicago Mercantile Exchange Holdings Inc. soared as much as 11 percent to an all-time high Wednesday amid rumors the futures market might merge with its crosstown rival, the Chicago Board of Trade.  Long-simmering speculation about a merger surfaced publicly a day earlier with a terse statement by the Board of Trade's parent company that it had received "unsolicited, non-binding expressions of interest in a business combination." CBOT Holdings Inc., already poised to take the exchange public, said its board of directors was considering the proposal and cited the possibility of an "acquisition, sale or other transaction."

http://www.newsday.com/business/nationworld/wire/sns-ap-chicago-exchanges-merger,0,2973719.story?coll=sns-ap-business-headlines

 

Traders, You May Not Have A Job Here Anymore

NEW YORK - Wall Street's embrace of technology has put tarnish on the once-glamorous job of stock trading.  Demand from hedge funds and other institutions for electronic-trading services and special strategic trading programs is forcing broker firms to reorganize their equities groups. Goldman Sachs (nyse: GS - news - people ) joined that camp Tuesday, when it fired 30 equities and convertible-bond traders and reassigned four other traders to sales positions.   Though it is less than 10% of Goldman's trading staff (including the traders at Goldman's stock-exchange specialist Spear Leeds & Kellogg), it marks a shift in Goldman's business model, a spokesman said. Indeed, all those sacked are Goldman traders and represent a larger percentage of Goldman's own traditionally gold-plated trader population.

http://www.forbes.com/work/2005/06/29/goldman-traders-sacked-cx_lm_0629trading.html

 

 

 

OMX And Orc Software Partner To Deliver New Front Office Trading Platform

http://www.exchange-handbook.co.uk/news_story.cfm?id=53701

 

Dubai Exchange Opens for Membership

The Dubai Gold and Commodities Exchange (DGCX), the first electronic multi commodity derivatives exchange in the Middle East, has taken a big step towards the start of operations, announcing that it is open for membership.

http://www.idexonline.com/start.asp

 

The Clearing Corporation and Exchange Systems Technology Announce Plan for integrated Clearing and Back Office System

Chicago/London, June 29, 2005  The Clearing Corporation (CCorp) and Exchange Systems Technology Ltd (ExchangeSys) announce today that that they have signed an agreement in principle to provide derivatives market places with an integrated state-of-the-art back-office clearing, settlement and risk management system.  CCorp intends to sell and support the ExchangeSys Eclipse back office solution on an exclusive basis in North America.  CCorp will also link Eclipse to its ECS platform to offer complete straight through processing for the global futures & options markets and OTC derivatives cleared at CCorp.

www.clearingcorp.com

 

Environmental Trading News

 

Chicago Climate Futures Exchange SO2 Allowance Cash and Futures Market Prices Survey Report                           Wednesday, June 29, 2005 11:45 a.m. Central Time Report

SO2 Allowance Cash Market Survey

Vintage               Bid       Offer    Last

2005 (or earlier)   $740            $760        $745  ( June 28)

2006                    $735            $755

Cash Market Price Survey Overview The SO2 cash market price information provided above reflects central values of price ranges gathered from randomly selected market participants from energy, brokerage and financial firms. The 9:30 a.m. Central Time report is based on information gathered between 9:10 and 9:25 a.m. Central Time. The 11:45 a.m. Central Time report is based on information gathered between 11:25 and 11:40 a.m. Central Time.

 

www.chicagoclimateexchange.com

Exchange & ECN News

 

Heat Wilts U.S. Crop Ratings But W. Wheat Harvest Jumps

The three major crops conditions to fall on this week's update.

http://www.cbot.com/cbot/pub/cont_detail/0,3206,1027+29114,00.html

 

Independence Day Holiday Schedule-Monday, July 4, 2005 

http://www.cme.com/clearing/clr/clradv/13745.html

 

CORPORATE EVENT: Vertitas Software Corp. & Symantec Corp. Merger 

http://www.cme.com/clearing/clr/clradv/13767.html

 

Shortened Trading Hours at NYMEX Europe Facility on July 1 and July 4; NYMEX Operational Details for July 4, 2005

http://www.nymex.com/jsp/shareholder/notice_to_member.jsp?id=ntm258&archive=2005

 

DLO Deutsche Logistik Outsourcing Goes Public on the Frankfurt Stock Exchange

http://deutsche-boerse.com/dbag/dispatch/en/listcontent/gdb_navigation/press/10_Latest_Press_Releases/Content_Files/13_press/pm_news_290605_freiverkehr.htm

 

NYSE trading commissions show steady decline since degulation: report

Institutional investors paying less

http://www.investmentexecutive.com/client/en/News/DetailNews.asp?Id=29437&IdSection=15&cat=15

 

Canada Day Holiday Closures

http://www.tse.com/en/mediaNews/newsreleases/6-27-2005_TSX-CanadaDayHolidayClosures.html

 

PHLX to Begin Trading Three New Options

http://www.phlx.com/news/pr2005/05pr062805a.htm

 

OneChicago To List Campbell Soup Co., Raytheon Co. and Masco Corp. July 1 

http://www.onechicago.com/

 

Tokyo Commodity Exchange Market Commentaries Now Available

http://www.exchange-handbook.co.uk/news_story.cfm?id=53700

 

 

Regulatory News

 

The SEC News Digest

The SEC News Digest provides daily information on recent Commission actions, including enforcement proceedings, rule filings, policy statements, and upcoming Commission meetings.

http://www.sec.gov/news/digest/dig062805.txt

 

CFTC and the CESR Publishes Final Communiqué on Common Work Program to Facilitate Trans-Atlantic Derivatives Business 

http://www.cftc.gov/opa/press05/opa5090-05.htm\

 

NASD Fines 20 Firms $1.65 Million for Municipal Trade Reporting Violations

http://www.nasd.com/web/idcplg?IdcService=SS_GET_PAGE&nodeId=5&ssSourceNodeId=5

 

SEC Charges Individuals with Fraudulent Scheme to Obtain Stock in NewAlliance Bankshares IPO

http://www.sec.gov/news/press/2005-93.htm

 

MFDA launches investor protection fund

Coverage starts July 1

The Mutual Fund Dealers Association of Canada today announced the establishment of the MFDA Investor Protection Corp

http://www.investmentexecutive.com/client/en/News/DetailNews.asp?Id=29447&IdSection=8&cat=8

 

Citigroup fined by U.K. regulator

FSA says trading strategy disrupted bond markets

http://www.investmentexecutive.com/client/en/News/DetailNews.asp?Id=29431&IdSection=8&cat=8

 

FSA publishes 2004/05 Annual Report

http://www.fsa.gov.uk/pages/Library/Communication/PR/2005/074.shtml

 

U.K.'s FSA Chief Executive Tiner Gets 15% Pay Raise (Update1)

U.K. June 29 (Bloomberg) -- John Tiner, chief executive of the U.K's Financial Services Authority, received a 15 percent pay increase after his first year of heading the British regulator.

http://www.bloomberg.com/apps/news?pid=10000102&sid=ancGqsJ2oLMU

 

Managed Futures - Managed Funds

 

Jana's Rosenstein opens MARHedge mid-year conference

June-28-2005 - Activism investing remains a lucrative hedge fund strategy, particularly as other strategies flounder amid lackluster returns, according to Jana Partners' Barry Rosenstein...Read More

http://www.marhedge.com/news/Cover.Hedge.asp?s=HedgeH-2005-06-28-17-39-15p1.htm

 

Names hold key to wealth, Barclays claims

Forget hard work and good ideas, your name holds the key to your earning potential, according to a survey by Barclays bank.  Calling your child David or Susan could put them on track to a six-figure salary, it claimed today, just like high-earning stars David Beckham and Sue Barker who apparently have their parents to thank for their cash, rather than any sporting ability.  The "research" looked at 60,000 customers of Barclays premier banking service - catering for people earning over £100,000. It revealed a preponderance of the name Dave on its books, with the next most common male names John and Michael.

http://money.guardian.co.uk/news_/story/0,1456,1517475,00.html

 

Risky Business?  Hedge Fund Aims To Gain From Chinese Privatization

Shanghai-based venture capital firm JTU Capital has just launched The China Event-Driven Fund, a hedge fund that aims to take advantage of market inefficiencies as the Chinese government privatizes state-owned enterprises.

http://www.institutionalinvestor.com/default.asp?page=1&SID=521424&ISS=16363&type=7

 

Reports

 

Bond Talk Today's Events

http://www.bondtalk.com/global.cfm?S=todaysevents

 

USDA Today

http://www.usda.gov/nass/PUBS/TODAYRPT/TODAY.HTM

 

Miscellaneous News

 

Citigroup Adds 30+ Staff to Energy Trading Unit

http://www.garp.com/risknews/newsfeed.asp?Category=6&MyFile=2005-06-29-11077.html

 

Operational Risk - Admitting Missteps May Boost Stock Prices

http://www.garp.com/risknews/newsfeed.asp?Category=6&MyFile=2005-06-29-11075.html

 

Thunderhead Announces its XML Adapter for DTCC Deriv/SERV Trade Matching: The Key to Real-Time OTC Derivatives Trade

Thunderhead, the provider of highly usable, multi-channel document generation technology, today announced the launch of its XML transformation tool for OTC derivatives contracts which enables the creation of Financial Products Mark-up Language trade confirmation messages that are compatible with The Depository Trust & Clearing Corporation's format for real-time trade matching.

http://biz.yahoo.com/prnews/050629/ukm003.html?.v=16

 

Mack Courts Morgan Stanley Alumni to Win Support (Update2)

U.S. June 29 (Bloomberg) -- John Mack, who's negotiating his return to Morgan Stanley as chief executive officer, may win the backing of the former bankers who led the effort to oust current leader Philip Purcell.

http://www.bloomberg.com/apps/news?pid=10000103&sid=avkEJmILZcVg

 

Events to Attend – Chicago

 

QWAFAFEW - Chicago & University of Chicago – Finance Roundtable

 

Present:

 

"The Future of Social Security – The Impact on US Markets & the Economy”

Thursday, July 14, 2005, 6PM – 8:30PM

 

Speakers:

Robert Z. Aliber, Professor of International Economics and Finance Emeritus, Graduate School of Business, University of Chicago

Randall Kroszner, Professor of Economics, Graduate School of Business, University of Chicago    

Mark J. Warshawsky, Assistant Secretary for Economic Policy, U.S. Department of the Treasury

 

Event Description:

 

Much of the conversation surrounding the proposed changes in Social Security has centered on the effects on taxpayers and the solvency of the system. However, policy makers should also explore the serious implications for the overall economy and the financial markets. Specifically, what are the macroeconomic effects of the major proposals? What will happen to our banking and investment industries? Finally, will there be changes in saving and spending patterns that could influence interest rates and credit markets?

 

Please join us for a conversation with key thinkers from both the Bush administration and the University of Chicago, Graduate School of Business as we examine the shape and scope of these issues and their potential impact on U.S. markets and the economy.

 

Gleacher Center

Room 621

450 North Cityfront Drive

Map on how to reach Gleacher Center

 

Cost: No Charge but pre-registration is required.

 

Registration: Register Online Or insert in your browser address bar: http://gsbsurvey.uchicago.edu/ViewsFlash/servlet/viewsflash?cmd=showform&pollid=alumni_roundtable!financeregistration

 

John's Comments

 

Recuse or not to recuse?

 

Trading Technologies had a significant announcement yesterday about their deal with Calyon Financial.  It is interesting to note the second sentence “Due to strong hedge fund demand, Calyon Financial has decided to add to its client offering TT's innovative front-end and fast architecture as well as its API and FIX solutions that allow clients to customize their trading systems.”

 

While I was more interested in letting the world know about Russ Rausch’s future at Calyon, and rewrote the headline, I missed highlighting this very strong statement from Calyon about the nature of their decision to put add TT’s trading solutions.  Now you know.

 

http://biz.yahoo.com/prnews/050628/nytu034.html?.v=11

 

**********

 

Brent Crude Watch

 

IPE Brent Volume: 134,058

NYMEX Brent Crude Volume: 7181

NYMEX Percent of Total Volume: 5.08%

 

********

 

Chicago Electronic Trading Scorecard for June 28, 2005

 

Percent Electronic

 

CBOT: 53.24%

CME: 67.51%

CME Eurodollars: 85.35%

CME Live Cattle: 1.02%

CME Currency Products: 82.68%

CBOT Soybeans: 4.71%

 

CBOT Options: 4.24%

CME Options: 7.73%

 

Volume 

 

OneChicago Volume: 1055

Eurex US Volume: 4496

Euronext.liffe Eurodollar Volume: 14,174

CBOE Futures Exchange Volume: 92

 

Market Share

 

CBOT 100 oz. Gold Volume: 1452

NYMEX 100 oz. Gold Volume: 40,520

CBOT Share: 3.46%

 

CBOT 5000 oz. Silver Volume: 701

NYMEX 5000 oz. Silver Volume: 55,781

CBOT Share: 1.24%

 

CBOT Mini Gold Volume: 580

CBOT Mini Silver Volume: 866

 

CME Emini Russell 1000 (100X) Volume: 3490

Eurex US Mini Russell 1000 (100X) Volume: 733

NYBOT Mini Russell 1000 (50X) Volume: 1943

CFE Mini Russell 1000 (100X) Volume: 0

 

CME Emini Russell 2000 Volume: 93,253

Eurex US Mini Russell 2000 Volume: 3327

CFE Mini Russell 2000 Volume: 20

 

Notes: Greed is one of the seven deadly sins.

 

Liffe Eurodollar Over-Under

 

Liffe/Globex: 1.27%

Liffe/CME: 1.04%

 

Regards,

 

John J. Lothian

Publisher

John Lothian Newsletter 

www.johnlothiannewsletter.com

 

Futures Brokerage - Business Intelligence   John J. Lothian President- Electronic Trading Division The Price Futures Group, Inc. 141 West Jackson Blvd., Suite 1340A Chicago, IL 60604 jlothian@pricegroup.com johnlothian@johnlothian.com IM: LothianJohnJ http://www.pricegroupetd.com tel: tel2: fax: mobile: +1 312-264-4350 +1 800-713-0215 +1 312-264-4399 +1 312-203-5515

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Disclaimer: The John Lothian Newsletter is a product of John J. Lothian & Company, Inc.  The opinions expressed are strictly the opinion of John Lothian, and not necessarily those of his employer, The Price Group and its management, and is intended solely for informative purposes and is not to be construed, under any circumstances, by implication or otherwise, as an offer to sell or a solicitation to buy or trade in any commodities or securities herein named. Information is obtained from sources believed to be reliable, but is in no way guaranteed.  No guarantee of any kind is implied or possible where projections of future conditions are attempted.  Security futures are not suitable for all customers.

 

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