Chief executive officer Mark Thompson told The Globe and Mail that the firm was targeting U.S. institutional investors.Andrei Tchernov/The Globe and Mail
DEAL OF THE DAY: Concordia's big share sale oversubscribed
Concordia Healthcare Corp.'s public offering is almost in the bag, according to an investment banking source. On Monday, the Oakville, Ont.-based pharma company said it intended to sell eight million new shares in a public offering to help pay for its recent $2.1-billion (U.S.) acquisition of Amdipharm Mercury Co. Ltd. The source said that the offering is now oversubscribed and should be priced by Friday. Full story
FINANCINGS
Scribble Technologies raises $35-million to make acquisitions
Scribble Technologies Inc., a Toronto-based content marketing software company, has raised $35-million (U.S.) in a Series D financing round to add to its sales and marketing staff and to acquire other startups. Press release
Blue Jeans Network gets financing
Blue Jeans Network, a cloud-based video collaboration services, announced that has secured $76.5-million (U.S.) in new funding led by venture capital firm New Enterprise Associates with participation from previous investors including former Yankee star Derek Jeter. Press release
Zscaler closes $110-million financing round
The latest recipient in a spate of cybersecurity investments is Zscaler, a cloud security company that raised $25-million (U.S.) from Google Capital, the search giant's equity investment arm for late-stage financing. The investment is an add-on to an oversubscribed $85-million round Zscaler raised in August. Full story
MERGERS AND ACQUISITIONS
First Niagara jumps after report of possible sale
Shares in First Niagara Financial Group Inc. climbed the most in more than six years following reports that the lender is exploring a possible sale or other opportunities. First Niagara jumped 12 per cent early Wednesday in New York trading, the biggest intraday increase since April, 2009. The Buffalo, N.Y.-based bank hired JPMorgan Chase & Co. to advise on possible moves, people briefed on the matter said late Tuesday. Toronto-Dominion Bank, New York Community Bancorp and Huntington Bancshares Inc. have all been rumoured to be potential suitors. Full story
BBA Aviation proposes to buy Landmark Aviation
British aircraft services company BBA Aviation PLC said it proposed to buy U.S. competitor Landmark Aviation for $2-billion (U.S.), a deal that would make the combined entity the biggest fixed-base operator in the world. The proposed deal would merge BBA Aviation's Signature Flight Support business, which has the highest number of fixed base operations in the United States, with Landmark's, which has the third highest, in a market that continues to remain highly fragmented. Full story
Pine Cliff surges on ConocoPhillips speculation
Pine Cliff Energy Ltd. rose to the highest in two months on speculation the company is set to buy some of the Western Canadian natural-gas-producing properties that ConocoPhillips is selling. Full story
BAY STREET MOVERS
Janice Fukakusa's power ranking
Janice Fukakusa, chief financial officer at Royal Bank of Canada, has been tapped by American Banker as one of the 25 most powerful women in banking for the third consecutive year, and her profile will probably head higher after RBC closes its $5.4-billion (U.S.) acquisition of Los Angeles-based City National Corp. later this year. Full story
INSIGHT & ANALYSIS
One for the trading geeks: High- and low-touch melding into one
The lines between "high-touch" and "low-touch" electronic trading are becoming increasingly blurred in the United States. That's according to a report released Wednesday by Greenwich Associates, a Stamford, Conn.-based research firm. Greenwich conducted interviews with investors between November, 2014, and February, 2015.
"Most of the 300 U.S. institutional equity investors that were surveyed are now willing to accept single coverage across high-touch and electronic trades," wrote Craig Viani, vice-president of market structure and technology practice.
In other words, traders are willing to deal with one individual who handles both high– and low-touch trading, instead of two specialists.
"Low-touch" or electronic trading is when a buy side trader doesn't need to get another human involved to execute a trade. He simply executes a trade using a terminal with his broker's trading software installed.
In a "high-touch" trade, the buy side trader needs to get another human involved. For example, if a trader needed to unload a block of stock in an illiquid issue, good luck trying to pull that off electronically. It can be done of course, but likely the trader would be looking at a big spread by showing his hand in the market. Far better to tap your "high touch" sell side trader at the brokerage and get him to discreetly find someone to take the other side of the trade. That way the spread is likely a lot tighter.
In the "old" days – five years ago – it was common practice for traders to deal with a separate low-touch and high-touch guy at the same broker. Part of the reason is the different traders had separate expertise. But there were also worries about information leakage. Going back to the example of unloading the illiquid block, your low-touch guy always had your back; there was a wall where he didn't talk to the high-touch trader who could in theory have passed on the information to another client or opportunistically taken the other side of the trade for the firm's proprietary trade account. Post-financial crisis, proprietary trading has fallen in the U.S. due to new regulation that effectively banned it in most cases, so fears over a high-touch sell-side trader using information gleaned from a low-toucher have largely abated.
Also, the expertise of the typical high-touch and low-touch sell-side traders are starting to overlap, Mr. Viani writes, that means the low-touch person will already employ some high-touch tricks in their job and vice versa.
"For institutional traders, the original 'set and forget' approach to e-trading has been supplanted by a purposeful, spasmodic style where orders are released for a few minutes and then cancelled when they appear to be impactful," Mr. Viani wrote.
"As a result, block and algorithmic trading are no longer separate endeavours."
There are also (of course) cost savings involved for the sell-side trader. If you can have one person who does both jobs, why not consolidate them into one position.
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Niall McGee