Taking stock of Mr Bertrand « Mining Blog

Taking stock of Mr Bertrand

11. November 2011,

The UK “Shares” magazine [10 November 2011] has just published an interview with one of the least known, but influential men in “The City” – not only the UK’s but also (still) the world’s leading diversified financial centre.

This is Nicolas Bertrand, head of Equities and Derivatives at the London Stock Exchange Group (LSE), whose task it is to promote not only new listings on the exchange, but boost the sale of financial “instruments” such as Exchange Traded Products offered by a growing range of eponymous funds.

The interview was conducted by Russ Mould. Astute readers of “From Money to Metals “ may recall Mr Mould being cited there as telling the audience at an LSE seminar in February 2009 that “mining companies [had] suffered a worse reduction in their stock value than any other industrial sector represented on the London Stock Exchange (LSE)” since the fiscal implosion of the year before. See:
http://moneytometal.org/index.php/Introduction#Far_from_secure_metal_futures

Indeed, it was Russ Mould who, on that occasion, offered down-at heel investors (some of whom, were literally so) a saving grace in the form of exchange traded funds. These are a means of ostensibly spreading one’s risks that have grown enormously in volume in the nearly three years since, especially those invested in metals as a speculative commodity.

This time around, Mould met Bertrand in the shadow of the Anti-capitalist encampment on the steps of London’s St Paul’s Cathedral, where the LSE luminary was challenged as to why protestors were targeting the LSE specifically. Surely buying equity – directly purchasing a company’s shares – is “part of the solution to the debt crisis?” suggests Mould.

Bertrand readily agrees: “Equity is a much stronger proposition for companies looking to raise capital [rather than debt]” he says. “The cause [of the crisis] is the excessive use of debt, combined with the lack of transparency of over the counter (OTC) markets, whereas we are trading on a regulated market”.

Few people would dispute the wisdom of the first assertion. For example, deals made over the counter (the true description for which should be “under the counter”) have been targeted specifically by the European .Commission’s European Securities and Markets Authority (ESMA) as one of the main roots of the mayhem, created by investors and banks in the years leading up to the watershed moment of September 2008.

However, many observers will be highly sceptical of his assertion that the LSE – even its main market (which embraces the world’s most highly-capitalised mining companies); not to mention the Alternative Investment Market – are now safer, or less volatile, than they were in the days before the UK’s Financial Services Authority (FSA) supposedly abandoned its “light touch” in regulating which outfits got to list on the Exchange.

Indeed, we’re hardly comforted by Bertrand informing us that, Russia’s huge, and murky Gazprom gas and coal conglomerate is “regularly the most-traded stock” on the exchange.

Nor might we be reassured to learn that, in the past two months (September-October 2011), the most valued company trading on the LSE is mining megalith, Rio Tinto – in terms of the value of its trades, which have an astonishing price tag of £10.2 billion .

– Or that Xstrata plc, the world’s biggest exporter of metallurgical coal, was the fifth most traded stock, raising nearly £3 billion from its share issues over the same two-month period.

Bertrand concludes his interview with Mould, claiming that the London Stock Exchange is “… an independently-owned trading platform and already happen[s] to do a lot that is critical…

“At the time when the role of the financial markets within society is coming under question from politicians and religious leaders alike, even anti-capitalism protestors might just be able to see the sense in that, at least once they think about it properly”.

But many of those dissidents have indeed already “thought about it” extensively.

That’s why they pegged their tents outside Mr Bertrand’s offices in London’s Paternoster Square.

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1 Comment

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