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Could Members Exchange Up-End Nasdaq and NYSE?

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A new stock exchange is springing up to compete with the Nasdaq and the New York Stock Exchange (NYSE). In total, nine organizations have joined together to form the Members Exchange, MEMX. These include retail brokerages, banks, financial services firms, and market makers: Bank of America Merrill Lynch (BAC), Charles Schwab (SCHW), Citadel, ETRADE (ETFC), Fidelity, Morgan Stanley (MS), TD Ameritrade (AMTD), UBS Group (UBS), and high-frequency trader Virtu Financial (VIRT). MEMX will be owned and operated solely by its founding members, and intends to cater to retail and institutional investors. MEMX is preparing to file an application with the SEC for final approval.

MEMX is being founded to increase competition, improve efficiency, and reduce cost. The cost of trades for individual investors should also drop. Historically, stock exchanges were self-regulated, not-for-profit entities owned by their broker members. These financial utilities were essentially in helping U.S. companies raise capital. By the 1990s, the exchanges started becoming companies, eventually listing themselves. Members Exchange could be a catalyst for stock exchanges to return to its roots. The world of U.S. stock trading can be summed up into three major exchanges, one independent exchange, and a plethora of alternative-trading systems and dark pools. Can MEMX make a dent? Two of the MEMX members are Virtu and Citadel, who control a large piece of order flow in U.S. stock markets.

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Qatar Steps Up for Lebanon, Plans $500 Million Bond Purchase

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Qatar Sheikh Tamim bin Hamad Al Thani appeared at an Arab economic summit and it was revealed that Qatar plans to purchase US$ 500 million of Lebanese government bonds. Earlier, there was speculation Qatar was going to deposit US$ 1 billion in Banque du Liban (Bank of Lebanon), which was never confirmed by the bank.

Lebanese officials in January revealed the possibility of a debt restructuring. The International Monetary Fund calculated that public debt in Lebanon is at over 160% of gross domestic product this year and could raise to around 180% by 2023.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Turkey Wealth Fund Could Provide Support to Credit Card Debt Market

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Recep Tayyip Erdoğan, the President of Turkey, has a new reform to jump start the consumer debt-laden economy, and it involves Turkey’s sovereign wealth fund. His strategy is to offer money to those facing overwhelming credit card debt. Ziraat Bank (Türkiye Cumhuriyeti Ziraat Bankası) will allow borrowers to apply for debt rescheduling and secure lower interest rates. Erdogan announced that “Any retail client from any bank can apply.” Credit card debt is a monstrous problem in the country. Consumer credit has exploded due to low rates, government assistance, and easy credit availability. Last summer, non-housing debt reached US$ 97 billion. Half of this is credit card debt. Over US$ 30 million is non-performing. The debt was accumulated in foreign currencies, because they used to provide the lowest interest rates. Unfortunately, as the Turkish lira’s exchange rate cratered, much of the debt became impossible to service. The lira is among the world’s weakest currencies. Erdogan expects a smooth transition, “They will pay off their debt with a loan from Ziraat, and will pay it back according to the level of their monthly earnings.” Ziraat Bank is managed by Turkey’s sovereign wealth fund, which is chaired by President Erdoğan.

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KIC Sells City of London Office to South African Investor

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Investec Structured Property Finance, part of Investec, provided a £107 million loan to a South African investor being represented by London-based Pembrey Asset Management Ltd to acquire an office in London at One Bartholomew Lane. The Korea Investment Corporation (KIC) is the ultimate owner of the office and is selling it through Hines UK, part of Hines. BNP Paribas Real Estate acted on behalf of Pembrey Asset Management and CBRE acted on behalf of Hines.

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