FiNETIK – Asia and Latin America – Market News Network

Asia and Latin America News Network focusing on Financial Markets, Energy, Environment, Commodity and Risk, Trading and Data Management

March 12, 2009 • 11:33 am 0

Dow Jones and South Asian Federation of Exchanges launch indexes

Dow Jones Indexes, a leading global index provider, and the South Asian Federation of Exchanges (SAFE) today launched the Dow Jones SAFE 100 Index and the Dow Jones SAFE Pakistan Index.

This is the first time indexes are created to measure the performance of blue-chip companies in five of the eight member states of SAFE.

The five member states included in the Dow Jones SAFE 100 Index are: India, Bangladesh, Mauritius, Pakistan and Sri Lanka.

The Dow Jones SAFE Indexes are designed to underlie index-linked investment products such as funds, exchange-traded funds, structured products, futures and options.

The Dow Jones SAFE Pakistan Index has been licensed to Arif Habib Investment Management Ltd., the premier Pakistani asset management company, to serve as the basis of an index tracker fund. “South Asia is home to some of the most rapidly evolving financial markets worldwide.

By further developing securities markets and aiming at their regional and international integration the South Asian Federation of Exchanges has been contributing significantly to these developments. The Dow Jones SAFE Indexes now provide market participants with accurate, transparent and reliable performance measures of leading companies in this region. These indexes are yet another example of Dow Jones Indexes’ commitment to index excellence, particularly in so-called frontier markets,” said Michael A. Petronella, president, Dow Jones Indexes. “We are very delighted to launch the Dow Jones SAFE 100 index jointly with Dow Jones Indexes, well-known for reliable and world-class indexes.

As a representative body of South Asian Exchanges, our effort had been to present the entire region as one investment destination and the launch of the Dow Jones SAFE 100 Index is an effort in the same direction. The index showcases the region as one asset class and can thanks to its superior methodology be used as an underlying tool for investment products on national and international level alike,” said Aftab Ahmad Ch., managing director and CEO, Islamabad Stock Exchange & secretary general SAFE.

The Dow Jones SAFE 100 Index measures the performance of the 50 largest Indian stocks and the 50 largest stocks trading in Bangladesh, Mauritius, Pakistan and Sri Lanka.

Thus, the index includes 3 Bangladeshi, 5 Mauritian, 39 Pakistani and 3 Sri Lankan stocks and was down -35.5% from its base date on December 31, 2005 as of March 9, 2009.

The Dow Jones SAFE Pakistan Index measures the performance of the Pakistani stocks in the Dow Jones SAFE 100 Index. As of March 9, 2009, the index contains 39 components. The Dow Jones SAFE Pakistan Index was, on March 9, 2009, down -46.36% from its base of 1000 on December 31, 2005 as of March 9, 2009. The Dow Jones SAFE 100 Index is calculated in U.S. dollars. The index is weighted by float-adjusted market capitalization. The weighting of each country in the index is capped at 50%, each component is capped at 10% subsequently.

The Dow Jones SAFE Pakistan Index is calculated in Pakistan rupees. Its component weights reflect the relative float-adjusted market capitalization weights of Pakistani stocks in the Dow Jones SAFE 100 Index. The Dow Jones SAFE Indexes are rebalanced annually in March. Their free-float factors, shares and weight factors are reviewed quarterly in March, June, September and December.

Source: Dow Jones Indexes, 11 March 2009

Filed under: Asia, Exchanges, News, , , , , , , , , , ,

March 12, 2009 • 8:50 am 0

Hits and Errors of Risk Management in the Crisis – 1st Mexico PRMIA Event for 2009 a Success

The first event for PRMIA Mexico in 2009, “Hits and Errors of Risk Management in the Crisis” was hosted by BMV  the Mexican Stock Exchange, headquartered on the prestigious Paseo de la Reforma located at the financial heart of Mexico City.

Carlos Kretschmer, Director Head of Capital Markets at Scotia Bank Inverlat, the sponsor Institution, welcomed more than 220 delegates and guests who attended last Thursday, March 5th, to learn and discuss with a panel of four well known risk managers speakers with great background in theory and practice on risk management.

Juvencio Ramírez, representing Banco de Mexico, prepared and presented: “Current Status of Financial Risk Management “ and “The Mexican Financial System and the Subprime Crisis: Contagion or Defense? – A Liquidity Risk Perspective”.

On behalf Banamex Citibank, Carlos Vallebueno talked about the “Origin and Evolution of the First Global Crisis. Heleodoro Ruiz, Credit Risk Manager at Banorte, followed and focused on the “Common Elements in the Crisis and Lessons Learned – A Credit Risk Perspective”.

Jorge Galindo, CEO of HiTo and Regional Manager of PRMIA Mexico, completed the conference providing the audience with information and details about PRMIA organization. Right after that, the experts opened the panel for discussion and to respond all delegates’ questions.

At the end of the event, the large group of professionals representing national e international bank institutions in Mexico, mortgage and insurance companies, private corporations, among many others, enjoyed a cocktail outside of the Mexican Stock Exchange Auditorium where they were able to exchange points of view and give a pleasant close to a very interesting evening.

Download the Speaker presentations below:
Juvencio Ramirez, Banixco ( Estado Actual de la Admon de Riesgos Financieros )
Juvencio Ramirez, Banixco ( El Sistema Financiero Mexicano y la Crisis de la Suprime )
Carlos Vallebueno, Banamex ( Aciertos y Errores en la Administracion de Riesgos )
Heleodoro Ruiz,  Banorte  ( Impacto Altamente Improbable )
Jorge Galindo,  HiTo ( PRMIA – Credit Risk Management in Times of Economic Stress )
Jorge Galindo, HiTo ( PRMIA Overview )

Source: PRMIA Mexico, 10.03.2009

Filed under: Banking, BMV - Mexico, Latin America, Library, Mexico, News, Risk Management, , , , , , , , , , , , , , , ,

March 10, 2009 • 11:37 am 0

S&P launches US Carbon efficient index

Standard & Poor’s, the world’s leading index provider, today announced the launch of the first in a series of global low carbon indices to meet the growing investor demands for environmentally focused indices.
The S&P U.S. Carbon Efficient Index will measure the performance of large cap U.S. companies with relatively low carbon emissions, while seeking to closely track the return of the S&P 500.

The new Index, which is part of the Standard & Poor’s global thematic index series, provides a benchmark to the market, as represented by the S&P 500, while allowing investors to create financial products that seek to gain exposure from a more environmentally efficient perspective.

“Organizations around the world are paying greater attention to the impact of greenhouse gases on our climate, as increasingly more investors consider carbon efficiency as an important investment theme,” said David Blitzer, Managing Director and Chairman of the Index Committee at Standard & Poor’s Index Services.

“Standard & Poor’s is the first independent index provider to offer a broad U.S. market index with an environmental focus, reinforcing our position as the premier provider of global thematic focused indices.” With the addition of the S&P US Carbon Efficient Index to the global thematic family, the series will now cover such green themes as Water, Forestry, Eco and Carbon efficiency.

To reflect its carbon efficiency, the Index is comprised of constituents of the S&P 500 that have a relatively low Carbon Footprint, as calculated by Trucost Plc. Trucost, the environmental data organization quantifies the environmental impact of over 4,500 companies across different sectors and geographies. Trucost calculates the carbon intensity of companies in the S&P U.S. Carbon Efficient Index by researching and standardizing publicly disclosed information and engaging directly with companies to verify its calculations on an annual basis.

Carbon Footprint is calculated as the company’s annual greenhouse gas emissions assessment (expressed as tons of carbon dioxide equivalent) divided by annual revenue.

“With the world’s most st comprehensive database of corporate carbon emissions, Trucost is uniquely able to provide Standard & Poor’s with information to significantly reduce the carbon exposure of its Index,” said Simon Thomas, Chief Executive of Trucost Plc.

The Index is rebalanced quarterly at which point the stocks in the S&P 500 are ranked by their Carbon Footprint. The 100 equities with the highest Carbon Footprints, whose aggregate exclusion does not reduce any individual GICS(i) sector weight of the S&P 500 by more than 50%, are removed.

Historically, the choice to maintain at least 50% of each GICS sector weight provided the greatest reduction in carbon footprint while closely tracking the return of the S&P 500. Standard & Poor’s also excludes companies, if any, which have not yet been assigned a Carbon Footprint by Trucost.

Through 2008, the average annual Carbon Footprint of the S&P U.S. Carbon Efficient Index was 48% lower than that of the S&P 500.

Source: Standard & Poor’s, 10.03.2009

Filed under: Data Management, Data Vendor, Energy & Environment, News, , , , , , , , ,

March 10, 2009 • 5:43 am 0

Data Intelligence and Data Governance – Report 2008

Data Intelligence and Data Governance Report 2008

Summary:  Increased transparency of the financial disclosure process requires that all underlying data meet emerging Governance, Risk, and Compliance (GRC) requirements.  Banks must re-evaluate aspects of their lending strategies and dig into the real details of data within various classes of risk. To report on all KPIs fed into their risk rating models, they must now augment risk calculations based upon
critical metrics driven by data quality coefficients.

Source: Trillium Software, November 2008

Filed under: Data Management, Library, Reference Data, Risk Management, Standards, , , ,

March 10, 2009 • 5:02 am 1

IXE Grupo Financiero high capitalization ratio earns S&P rating raise

S&P raised its credit rating outlook to stable from negative for IXE Grupo Financiero and its subsidiaries.

 

IXE Grupo Financeiro has shown a strong financial performance and is one of the soundest financial institutions in Mexico.

 

In this time of turmoil and when others are receiving downgrades (see list below), IXE has emerged as a bright star. IXE Banco’s capitalization ratio as of year end 2008 stands at 18.5%, the second highest in the Mexican Financial Sector just behind Inbursa. Furthermore, IXE Banco continues to have outstanding liquidity, as it has significantly more deposits than loan portfolio. 

 

Bank                                       S&P Rating

IXE                                        A, Raised to Stable from Negative

Banamex:                               BBB+, lowered to Negative from Stable

Banorte:                                 BBB, Stable

Santander:                              Lowered to Negative Outlook

Merrill Lynch/BofA:               A, Lowered from A+

MBIA:                                   BBB+, lowered from AA

HSBC Mexico:                      Lowered to Negative Outlook

 

 

Source: IXE Casa de Bolsa, 06.03.2009

Filed under: Banking, Latin America, Mexico, News, Risk Management, , , , , , , , , , ,

March 10, 2009 • 2:50 am 0

SSE Shanghai Stock Exchange To Build A Block Trading Information System

 In an interview regarding the market’s hot issues on March 7, the National Committee Member of the Chinese People’s Political Consultative Conference and also Governor of the Shanghai Stock Exchange (SSE) Geng Liang said the SSE is confident and determined to promote the construction of the capital market in a standard and stable manner.

This year, the SSE will further develop the blue-chip market, work on the establishment of the block trading information platform, propel the growth of the exchange’s bond market as well as conduct R & D and product innovation of ETF at a deeper level and in a broader scope.

Develop Blue-chip Market, Promote Merger, Acquisition & Reorganization According to Geng, only 8 companies’ market capitalization on the SSE had exceeded RMB10 billion at the beginning of its establishment, and now the number is 131, among which 1 company’s market capitalization has exceeded RMB1 trillion, 15 companies have their market capitalization between RMB100 billion and RMB1 trillion, while 115 companies between RMB10 billion and RMB100 billion.

In 2007, the SSE ranked No.6 in market capitalization, No.7 in trading volume and No.2 in raised capital amount among the world’s major exchanges, and in 2008, its rankings were No.6, No.7 and No.8 in the aforesaid indicators. The RMB223.8 billion raised capital, which saw a drop last year, still made the second best record since its establishment.

Geng said that the framework of the SSE’s blue-chip market has been confirmed, and it will stick to the goal of developing blue-chip market this year, with the following tasks to be done: Firstly, to ensure trading safety and provide an effective, open and fair trading platform; secondly, to further develop the SSE’s blue-chip market, with emphasis on promoting the to-be-listed companies’ growth by merger and reorganization. According to Geng, the SSE has organized 9 teams to visit 53 listed companies in 18 provinces which have reorganization and merger intentions to conduct research and provide services since the fourth quarter of last year.

Moreover, the SSE has specially established the Issuance and Listing Department and the Beijing Center for enhancing the merger and reorganization of to-be-listed companies. Geng said that, if necessary, the SSE will engage professional institutions to assist the listed companies with reorganization and merger intentions in researching and formulating plans.

To Establish a Block Trading Information Platform According to Geng, the block trading market, though established for over 5 years, has been brought into full play in 2008 thanks to the policy of encouraging the shareholding lessening of big/small non-tradable stocks on the block trading market issued by the China Securities Regulatory Commission (CSRC) and the investors’ growing recognition of the advantages of the block trading after several years’ practice.

Geng said that the block trading volume in 2008 has seen a year-on-year increase of tenfold while the transaction number has seen a year-on-year increase of twelvefold. Geng described the launch of the block trading as an important reform of the SSE’s trading methods, which still has great potential for development.

The difficulty facing block trading is to find “counterpart”, so the SSE is preparing to establish a block trading information platform to provide information for trading counterparts, and to further develop special floor business of the block trading. To Launch SHSE-SZSE300 ETF Products Geng stressed that stability will be maintained in pushing product innovation under the global financial crisis, and “product innovation and development will be in light of the market acceptance level”. The products to be introduced by the SSE this year will be featured by “simple transaction, low cost and comprehensibility”.

Geng said that the SSE will conduct research and product innovation in the depth and width of ETF products this year. Currently, it is working on the launch of SHSE-SZSE300 ETF products to pave the way for hedging and arbitrage trading by investors after the launch of stock index futures. Besides, it also plans to develop such products as sector ETF and bond ETF.

 To Modify Trading Rules of Bond Market Geng said that the development of the SSE’s bond market is relatively slow, with the amount of bonds under custody on the exchange’s bond market over RMB300 billion and the daily average trading volume at RMB12.1 billion, among which the spot trading volume is RMB2 billion and the repo trading volume RMB10 billion. In January 2009, the CSRC and the China Banking Regulatory Commission jointly published relevant notice of listed commercial banks’ return to the bond market of exchanges. “We fully support and welcome listed commercial banks to trade on the exchange’s bond market,” said Geng, “it was one of our priorities to develop the bond market this year.” Geng introduced the efforts made by the SSE regarding the aforesaid issue: firstly, to provide on-site services for 14 listed commercial banks one by one, assisting them to better understand the trading rules of the exchange’s bond market; secondly, to modify the existing bond trading rules so that they are simpler and more adaptable to the trading practices of commercial banks; thirdly, to fully check the fixed income platform, ensuring the trading safety after commercial banks’ return to the exchange’s bond market.

Meanwhile, the SSE is actively promoting the back-end construction to gradually create the unified and interconnected information of related markets. Regarding the integration of the depository and clearing back-end of the exchange’s bond market and that of the inter-banking bond market, Geng expected the back-end of China Securities Depository and Clearing Corporation Limited and that of China Government Securities Depository Trust & Clearing Co., Ltd. should be gradually integrated, the trusteeship transfer be accelerated and T+0 or T+1 be realized. “The task has been under way for years, and my proposal this year is to gradually formulate a unified and interconnected bond market by further accelerating the bond market’s development and strengthening the connection between the two platforms”, said Geng.

Confidence in a Sound and Stable Capital Market Geng said the SSE is confident and determined to promote the construction of the capital market in a standard and stable manner despite of the changing economic situations both at home and abroad. The reasons are as follows: Firstly, the fundamentals and long-term positive trend of China’s economy remain the same, which is the basis and confidence source of the stable development of the capital market. Secondly, China’s capital market is generally in sound condition, which has a more solid basis after the equity division reform, the clearing and rectification of securities companies, the debt clearing of listed companies’ major shareholders and other important reforms in recent years.

The equity division reform solved the bottleneck problems affecting the sound and stable development of the capital market; the clearing and rectification of securities companies, with 33 unqualified securities dealers banned from the market, removed the industry risks; the debt clearing of listed companies’ major shareholders led to a total of RMB49.5 billion capital returned by SSE-listed companies, who have become more capable of overcoming difficulties.

Thirdly, the CPC Central Committee and the State Council have formulated the general guideline of maintaining growth, expanding domestic demand and adjusting structure to promote the steady economic growth since last year. Concerning the specific issues in the capital market, the CSRC has also introduced a series of measures such as encouraging the shareholding lessening of big/small non-tradable stocks through the block trading platform, the repo of listed companies and the shareholding increase of listed companies’ major shareholders. All these policies and measures have been brought into full play.

Fourthly, investors still have great passion in the capital market. According to Geng, the daily trading volume of the SSE of last year reached RMB73.3 billion in spite of the great adjustments in the two exchanges in Shanghai and Shenzhen. By March 3, 2009, the SSE had seen a daily trading volume of RMB101.9 billion, up 39% than that of last year.

Source: MondoVisione 10.03.2009

Filed under: China, Exchanges, News, Trading Technology, , , , , , , , , , ,

March 6, 2009 • 6:20 am 0

Crisis will bring new opportunities in Asia, Monetary Authority of Singapore

Wealth creation and the rise of Asia’s middle class will drive growth in personal financial services, says Monetary Authority of Singapore’s Heng Swee Keat.
The medium-term prospects for growth in Asia remain strong despite the global financial crisis, according to Heng Swee Keat, managing director of the Monetary Authority of Singapore.

“The secular trend in the growth of Asian enterprises and corporations, growing intra-regional trade, and the demands for infrastructure financing will generate new opportunities for corporate and institutional businesses,” says Heng, who gave the keynote address at the International Institute of Finance Asia Regional Economic Forum in Singapore. “Wealth creation and the rise of the Asian middle class, coupled with the low penetration of financial services will drive the growth of personal financial services.”

Heng went on to say that when the dust settles, global financial institutions which rebuild their resilience and stay engaged in the Asia region will increase the value of their franchises.

“Asia will continue to provide strong growth opportunities and geographical diversification benefits,” he says. “Some Asian financial institutions will also develop strong operations, brand names and a regional footprint. They will play their role in driving Asia’s continued growth.”

Singapore, he notes, is working to cushion the impact of the crisis while at the same time building capabilities in the economy and the financial sector for the upturn.

Like everywhere else, Singapore has experienced tightening credit conditions and it has taken action to address both the interbank money markets as well as the flow of credit from banks to corporations.

In the interbank money markets, the MAS remains focused on ensuring that both the Singapore dollar and the US dollar markets continue to function smoothly, Heng says. For the Singapore dollar market, the MAS will continue to ensure sufficient liquidity through its monetary operations and standing facility. For the US dollar market, it established a $30 billion swap line with the US Federal Reserve. This line is alongside other swap lines that the Fed has with 13 other central banks, including several in Europe and Asia.

“As a major funding centre, we took precautionary measures to ensure that global financial institutions operating here continue to have access to US dollar liquidity,” Heng says.

The MAS has not needed to use the swap line, “nor do we see any impending need”, Heng says, while adding that the precautionary measure has served it well.

With regards to the flow of credit from banks to corporations, Singapore believes this is best facilitated through government schemes to co-share some of the risks with banks. In February, the government announced the Special Risk-Sharing Initiative (SRI). Under this initiative, the government will absorb 75% of the risk for insurance covering working capital and trade-financing loan facilities. The government will also absorb 80% of the risk for bridging loans which go towards meeting firms’ working-capital needs. It also has schemes for SMEs and micro-loans.

Source: AsianInvestor, 06.03.2009

Filed under: Asia, Banking, News, Risk Management, Singapore, , , , , , , , , , ,

March 5, 2009 • 9:25 pm 3

ITAU denies Citi’s Banamex talks, Banamex prefering Mexican Investor group

Banco Itau, Latin America’s largest lender, denied it’s in talks to buy Citi’s Banamex. Itau “is not negotiating any stake in Banamex’s capital,” Itau said in a statement sent to the Brazilian securities regulator.

Meanwhile, according to the local newspaper EXCELSIOR, Roberto Hernandeza and Manuel Medina Mora have been lobbying with PRI lawmakers and the Calderon administration in an effort to persuade the US government to sell BANAMEX to a group of Mexican investors.

According to the article, the group of Mexican investors could buy up to 30% of the bank, list in the Mexican Stock Exchange between 30-40% of the company and get a credit line from either the government or another bank for the remaining stake.

Source: IXE Casa de Bolsa, 05.03.2009

Filed under: News, Mexico, Banking, , , , , , , , , ,

March 5, 2009 • 7:57 am 0

ITAU Securities Selects NYSE Technologies To Create New Direct Market Access Platform – First Global Electronic Trading Platform To Offer Access To Brazilian Markets

NYSE Euronext (NYX) and Itau Securities today announced that NYSE Technologies, the commercial technology division of NYSE Euronext, has been selected to develop a next-generation electronic trading platform that will allow Itau Securities’ customers around the world to send orders directly to Brazil’s BM&F Bovespa market center.

Making them the first to offer Direct Market Access (DMA) connectivity to BM&F Bovespa. Itau Securities and NYSE Technologies will work together to implement a best-in-class technology solution that combines comprehensive hosting software with an integrated back office platform utilizing the super-fast, resilient SFTI network.

“We are excited to work with Brazil ’s leading capital markets firm on a truly ground-breaking project that further opens the Latin American marketplaces to the global investors – and puts the global markets within reach of the Brazilian investors” said Stanley Young, CEO, NYSE Technologies and Co-Global CIO, NYSE Euronext.

“With our industry-leading technology and Itau’s extensive customer relationships in the Americas , Europe, the Middle East and Asia, we will be implementing a new breed of direct market access solutions unlike anything currently available in Latin America .”

“As we continue our global expansion to London, Dubai, Hong Kong and Tokyo, Itau Securities is working with NYSE Euronext to build this new platform giving us the ability to offer our customers outside Latin America a robust, innovative trading solution for trading in our markets,” said Roberto Nishikawa, CEO of Itau Securities.

“Moreover, Itau’s clients will have access to the most complete provider of investment services for the Brazilian market – from custody to asset management, foreign exchange, research for equities, derivatives and fixed income products.”

Source: MondoVisione, 04.02.2009

Filed under: News, Brazil, Trading Technology, FIX Connectivity, , , , , , , , , , , , , ,

March 5, 2009 • 5:51 am 0

FiNETIK and the latest on ITAU / Banamex / Citi

Via the Finetik blog linked here, your info-hungry Otto finds out that Banco Itau (ITU) sent an official communication to the Brazilian regulators last night stating that Itau “..is not negotiating any stake in Banamex’s capital..”.

Now that doesn’t mean there’s no interest, of course. The ITU honchos have already said they’d be interested purchasers if and when Banamex went up for sale. It does mean, however, that ITU isn’t doing anything proactive right now. This fits with the official Citigroup (C) line that Banamex is not up for sale, of course. This won’t quell the rumours, but it will put a dampener on short-term speculation for sure. However it should be clearly pointed out that none of this addresses the core issue here: As explained previously if the US gov’t takes its 36% interest in Citigroup as planned, C will be breaking the Mexican law and cannot hold onto Banamex as things stand. That’s as plain as day.

Finally, a word of kudos for the people at Finetik; I’ve only recently discovered the blog (which is part of a wider capital markets company that specializes in Latin America as well as Asia) and put it on my RSS, but I’ve been very impressed with the quality of information passed over there. I can thoroughly recommend it and say it would be a good addition to your own RSS feed (or regular bookmarked visit). Here’s the link to the blog’s main page.

Disclosure: I have no affiliation whatsoever with Finetik and have never even spoken to the people in my time. I just think it’s a good blog that covers LatAm finance well.

Source: Inca Kola, 05.03.2009

Filed under: Banking, Mexico, News, , , , , , , , , , ,

March 4, 2009 • 11:41 pm 0

Fidessa LatentZero offers Nomura’s ModelEx algorithmic trading suite through its order and execution management solutions

Fidessa LatentZero, has today announced that it has integrated the ModelEx suite of algorithmic order execution strategies from Nomura into its Minerva Order and Execution Management System (OEMS) and EMS Workstation trading applications for the buy-side. ModelEx builds on and enhances the strong algorithmic capabilities Nomura acquired from Lehman Brothers’ European and Middle Eastern and Asian equities and investment banking operations in 2008.

The availability of ModelEx to Fidessa LatentZero’s European OEMS and EMS clients is a key part of the relaunch of Nomura’s electronic trading facility, and will in turn offer Fidessa LatentZero’s clients a comprehensive series of electronic trading options. The suite now includes more than 20 individual algorithms that support core strategies, as well as more specialised tactical, portfolio, conditional and dark strategies for both equities and futures. The suite also offers Fidessa LatentZero users the option of creating custom algorithms to support specific trading strategies.

Andrew Bowley, Head of Electronic Trading Product Management at Nomura says: “Nomura has enjoyed a strong working relationship with Fidessa group for some time, and we are very pleased to be re-launching our electronic trading franchise through the Fidessa LatentZero trading platforms.

Source: FidessaLatenzero, 04.03.2009

Filed under: News, Trading Technology, , , , , ,

March 4, 2009 • 3:20 am 1

Rumor: ITAU to buy Banamex from Citigroup

Marcia Peltier Column at Jornal do Commercio (Rio de Janeiro) says that Itau-Unibanco will announce next week the purchase of Banamex. It also says that executives from brazilian bank are already in Mexico City.

Itau-Unibanco opportunities in US crisis

There are two immediate analyses that Itaú has to do. The first is the sale of Citibank’s’ stake in the credit card processor Redecard. The stake is worth R$ 2.9 bn, at market value. Itáu declared that it is only interested in buying 24 mn shares, which will allow it to be the largest shareholder, with a 26.7% stake. At market value, Itaú will have to pay R$ 573 mn. As Redecard trades at 24x BV, it will mean that, net of tax, Itaú will pay less than R$ 400 mn. Itaú also stated that it would like to find a strategic partner for the rest of the stake. The only bank Itau would feel  fit the bill is HSBC, but we are uncertain if it desires to hold such a stake.

The second immediate opportunity that arises, also due to Citibank’s financial problems, is the sale of Citi’s Mexican bank. According to Mexican law, no foreign government can own a bank in that country. As Citi will have as a major shareholder the government of the United States, the situation forces them to sell their Mexican stake. This would be a very attractive asset for Itaú, as it would assure the bank’s international expansion. However, we expect it to let it pass due to the current process of digesting the merger with Unibanco.

Itau Unibanco are in merging process

Itaú and Unibanco have effectively begun the merger of the two banks. There are no expectations of major lay-offs, as
management expects natural turnover and retirements to decrease the total number of employees. There have been
some reductions in specific areas, but nothing significant enough to affect personnel expenses. By 1H10 the merger
should nearly be over, with only some back office mergers in 2011. According to management, there will be no
significant reduction in the number of branches.

IXE Casa de Bolsa conference call: ITAU

Source: IXE Casa de bolsa, 27.02.2009, 03.03.2009

Filed under: News, Mexico, Banking, , , , , , , , , , , , ,

March 3, 2009 • 11:13 pm 0

BMV – Bolsa Mexicana de Valores – January 2009 Performance Report

BMV Bolsa Mexicana de Valores monthly market performance report for the month of January 2009.

View BMV January 2009 Performance Report

Source: BMV, 24.02.2009

Filed under: BMV - Mexico, Mexico, News, , , , , ,

March 3, 2009 • 2:53 am 0

BMV – Bolsa Mexicana de Valores – Announces an Annual Revenue and Operating Income Increase of 22.1% and 59.4%.

BMV Bolsa Mexicana de Valores (MEX:BOLSAA) closed it’s first year as a public listed company with a year on year revenue growth of 22.1% and 59.4% in Operations Income for the financial year 2008. The Mexican Exchange group further set a solid income growth target of 30% for the 2009 financial year.

BMV Mexican Stock Exchange 2008 annual and quarterly statement_english

Since February 2009 the Bolsa A shares has become a constituent of Mexico’s IPC index.

Source: MondoVisione Exchange Handbook 01.03. 2009 BMV Bolsa Mexicana de Valores S.A.

Filed under: BMV - Mexico, Mexico, News, , , , , , , ,

March 3, 2009 • 1:59 am 0

Citigroup-Banamex: Failed US Banks vs. Soild Mexican Institutions

Does the US government’s 36 per cent stake in Citi violate Mexican ownership laws? Have we got our countries confused? No. Citi owns Banamex, a Mexican bank with circa 1,200 branches and 2.6m checking accounts. And Latin American finance blog Inca Kola sees a fight brewing over the Southern subsidiary:

The nub of the issue revolves around Mexican law, which states in crystalline manner that foreign governments cannot own more than 10% of any bank that operates inside Mexico. It’s as clear as a bell and on the statute. So as Banamex is a wholly owned subsidiary of Citigroup (C paid $12.1Bn or so back in 2001 for the bank) if the US Gov’t takes its 36% stake in Citigroup then it will be a larger-than-10% shareholder of Banamex, something against Mexican law. Won’t it?

Mexico’s National Banking ans Securities Commission is therefore investigating, while Banamex is saying that the North American Free Trade Agreement will (somehow) protect it.

Selling Banamex would effectively mean an even worse deal for the US government. The unit’s been described by Citi as one of its “crown jewels”, managing to post an $896m net profit for 2008, making it one of the least toxic parts of the banking group. Banamex is accordingly part of Citicorp — the retail (read: non-toxic) part of the Citi empire. Full Article click here.

Source: FT Alphaville 02.03.2009, Inca Kola News 01.03.2009

Mexico Gov. Studying Effect on Banamex of U.S. Aid to Citi,

(Bloomberg) Mexico’s National Banking and Securities commission said it’s studying the legal impact of the U.S. government’s stake in Citigroup Inc., which owns Grupo Financiero Banamex SA.

The U.S. government announced today it plans to convert as much as $25 billion of preferred shares of Citigroup into common stock. The conversion would give the U.S. a 36 percent stake in the New York-based company. Mexico’s banking law prohibits foreign governments from owning or having a stake in banks that operate in Mexico, like Banamex. Citigroup purchased Banamex for $12.5 billion in 2001.

The commission has asked all banks operating in Mexico that have received help from governments to provide information on the aid, the statement said. The banking commission and other financial authorities will “soon” release information on the study, the body said in a statement.

“The Mexican financial authorities are analyzing the legal implications of the aid that foreign governments have granted foreign financial entities that have subsidiaries in Mexico,” the agency said.

Speculation has mounted in recent weeks that Citigroup may sell Banamex to raise cash and shore up capital amid the global financial crisis. Chief Executive Officer Vikram Pandit flew to Mexico Feb. 19 for two days of meetings with clients, Banamex officials and government officials, including Finance Minister Agustin Carstens and central bank Governor Guillermo Ortiz.

Citigroup fell 96 cents, or 39 percent, to $1.50 at 4 p.m. in New York Stock Exchange composite trading as a record 1.87 billion shares changed hands. The stock has plummeted 94 percent in the past year.

Source: Bloomberg 27.02.2009 Andres R. Martinez in Mexico City at amartinez28@bloomberg.net

Mexican Bank Asset Value

(IXE) According to local newspaper EL UNIVERSAL columnist Alberto Aguilar, ITAU is one of the government’s favorite candidates to acquire Citigroup’s BANAMEX if they have a minority stake in a group led by Mexican investors.Other candidates that have expressed interest are JP Morgan Chase and HSBC.

IXE understands that if Citibank sells Banamex, it will likely sell its BZ.Bradesco branch as well. Due to the fact that Banamex ranks in second in Mexico (assets) and first (equity), along with an important corporate loans book, while the BZ subsidiary present loans book smaller than the ones presented by mid-size banks, and with a lower ROE, which could be higher considering its BZ peers. Furthermore, Citibank BZ does not present important market share in any particular segment in Brazil.

Banamex instead, possess a significant Mexican banking market (see file attached). This would be a very important operation for Itau if it materializes. We believe foreign players could be potential acquirers of Banamex (including Itau) because local players could end up having problems to find funding to finance the operation in the future. If Itau buys Banamex, it will be coherent with Itau’s Roberto Setubal past speeches.

The following is a table of the size of Mexican Banks (Tot. Assets 2Q08 in billion US$)

US$ 53.4 bn BBVA Bancomer
US$ 38.9 bn Banamex
US$ 31.5 bn Santander
US$ 26.8 bn HSBC
US$ 21.0 bn Bannorte
US$ 12.7 bn Inbursa
US$ 10.0 bn Scotia

Source: IXE Casa de Bolsa, 28.01.2009

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