Reflections on the week ending April 23, 2010

On April 21, 2010, Wells Fargo & Company reported its results for the quarter ended March 31, 2010.  EPS for the quarter was $0.45 per common share after integration costs of $0.05 per common share.  Of particular interest to me, the Company noted:
•    All business segments contributed to the strong earnings results
•    Credit believed to have “turned the corner”
•    Wachovia merger integration on track
•    Record retail bank cross-sell
•    Tier 1 capital ratio of 10%

My takeaways from these results are as follows:
•    Further signs that the US economic recovery is taking hold
•    Wells Fargo appears to be executing on its own strategy of leveraging its strong retail platform through cross-selling

On April 23, 2010, Financial Technologies ( India) Limited (FTECH) subsidiary, Singapore Mercantile Exchange (SMX), announced that it had entered into a Memorandum of Understanding  with Tokyo Commodity Exchange (TOCOM), Japan’s largest commodity futures exchange, to explore co-operation and partnership mutually beneficial for both exchanges and market reach expansion.

•    Thomas McMahon, CEO of SMX said, “TOCOM’s enthusiasm for bilateral advancement of the Asian Commodity Derivatives Market in partnership with SMX firstly is testament to the special position SMX is in to unify what is still a very fragmented Asian derivative landscape into a consistent workshop for global benchmark trading prices and indices.  Our MoU with TOCOM falls in line with our long term strategy to be the one-stop comprehensive product-range hub exchange which ties in all physical and derivative commodity players during pan-Asian trading hours. “SMX and to a good extent Singapore, stands poised to be the central point of contact between all the world’s commodity derivative trading players and the individual pan-Asian markets where fundamentals dictate realistic price discoveries.”

In my view, this is indicative of:
•    the evolution of capital markets taking place in Asia and that this evolution is both, the driver and the result of the economic development taking place in Asia; and
•    the significant value to be created by businesses that can entrench themselves as leaders during these developmental stages.