What is a stock exchange for? For the exchange of stock, obviously, matching buyers and sellers in a reasonably transparent way. Well, up to a point. For the London Stock Exchange, this workaday activity sometimes seems almost secondary to charging for the use of its benchmark indices on the one hand, and finding ways to cash in on the burgeoning derivatives market on the other.

The LSE’s portfolio of FTSE indices has become a nice little earner since it started alongside the Financial Times in 1984. It bought out the FT in 2012. Market participants provide the raw material in the form of share prices, which is put through the sausage machine and sold back to them as indices.  Every transaction on the exchange is called a “bargain”, but the participants feel that this bargain is decidedly one-sided.

Now one of the LSE’s competitors, Bats Europe, is having a crack at the index business by launching its own lookalike benchmarks. Competition is all very laudable, but it looks a long haul to reach the retail customers who are used to the FTSE indices to measure their managers’ performance.

A far longer haul is in prospect for the promoters of a different kind of stock exchange. Suitably named, the Long Term Stock Exchange is the idea of Eric Ries, a silicon valley entrepreneur whose previous advice to companies thinking of going public was to lie down until the feeling went away. Today’s exchanges, he argues, reward short-termism and punish companies which take the long view. His exchange, if it ever happens, promises votes for loyalty and much longer horizons for executive rewards.

We can all support the idea of innovation and risk-taking to generate future wealth, but if all the shareholders are long term, there’s no exchange at all. Besides, it is a paradox of our zero-interest age that companies are under pressure to pay dividends almost come what may. As for the LSE, the long-term plan of its departing CEO is to push the business much further into short-term derivatives by selling out to Deutsche Borse, while trying to bat Bats out of the benchmarks park.

It’s not alright Ma

It was a bad moment when Jack Ma, the founder of internet leviathan Alibaba, claimed that fakes were often better than the brands they were faking. Made in the same factories, and from the same materials, quality knock-offs strike at the heart of what brands are all about. Fakes are not a new problem, but identical fakes easily bought on-line are something else.

You may say that the Hermes Togo Leather Birkin Tote is to die for, or at least to pay £15,000 for, but if the same product is available at a fraction of the price, it may betray that you are merely buying it to flash the label. Mind you, men never understand handbags and shoes, which might explain why Jimmy Choo caught the market on the hop (sorry) with results  after analysts had braced themselves for bad news.

The company sees China as the future for Choo shoes, as does every other major luxury brand,  but Alibaba is the gateway. These brands seek to reconcile growth and exclusivity, trying to maintain margins while hoping that nobody will notice that the emperor has no clothes – nor, indeed, shoes. By pointing it out, Mr Ma has not helped them.

Green negotiators for Brexit

Those who had never seen Philip Green negotiating had a treat last Wednesday. Ducking, interrupting, with nothing ever quite settled, Sir Philip demonstrated how he has beaten so many adversaries into submission. However, should we vote leave his talent could present him with an opportunity to repay his debt to society.

He is just the man for the divorce talks with our European partners. Come to think of it, the bunch of political second-raters (with rare exceptions) who could find themselves empowered next week should pick a team of negotiators from private equity and tell them to get on with it. Starring roles beckon for Donald Mackenzie (CVC) Sir Damon Buffini (Permira), Simon Borrows (3i) etc. The other side would hardly know what hit them.

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