2010 February « FiNETIK – Asia and Latin America

February 27, 2010 • 8:38 am 0

BM&FBOVESPA Voluntary Carbon Credit Market Auction – Sale Will Offer 180,000 Carbon Credits Managed By The Social Carbon Company

The Brazilian Securities, Commodities and Futures Exchange – BM&FBOVESPA will hold on 08 April 2010, a voluntary carbon credit market auction. A total amount of 180,000 voluntary carbon units from projects managed by the Social Carbon Company will be auctioned.

The emission reductions were generated from 9 renewable biomass projects administered by the Social Carbon Company in ceramic factories. These plants are located in the Brazilian states of São Paulo (Panorama, Paulicéia), Pará (São Miguel do Guamá), Pernambuco (Lajedo, Paudalho), Sergipe (Itabaiana), Minas Gerais (Ituiutaba), and Rio de Janeiro (Itaboraí). The projects involve fuel switching to renewable biomass fuels like sugarcane bagasse, açai seeds, and rice husks, among others. The carbon credits have been validated by certified entities authorized by the United Nations Framework Convention on Climate Change (UNFCCC).

The auction will be held in three sessions, with a lot traded per session. The initial bidding prices will be indicated by lots that vary in accordance to the vintages and are priced at BRL 10.00 to BRL 12.00 per unit. The first transaction will occur at 1:00 p.m. (Brazil Time) and will be carried out by BM&FBOVESPA’s Carbon Credit Trading System. The financial settlement will be coordinated by Liquidez DTVM brokerage house.

BM&FBOVESPA’s Carbon Credit Market

The Brazilian Exchange has previously organized two carbon credit auctions in 2007 and 2008. Both auctions offered Certified Emissions Reductions (CERs), held by the São Paulo Municipal Government, and generated by the Bandeirantes and São João landfill projects.

The objective of BM&FBOVESPA’s carbon market is to foment carbon credit trading in Brazil within an organized trading environment. It also provides Brazilian companies an opportunity to sell their GHG emission reduction projects in the country. The Exchange’s trading platform offers global participants a secure, transparent, and efficient trading atmosphere with competitive prices.

Source: MondoVisione, 26.02.2010

Filed under: BM&FBOVESPA, Brazil, Energy & Environment, Exchanges, Latin America, News, BM&FBOVESPA, Brazil, Carbon Credits, Carbon Market, Commodities, Derivatives, Exchanges, Mercado de Carbon

February 27, 2010 • 8:27 am 2

India: Co-location services at BSE premises

Bombay Stock Exchange permits DMA and Automated trading. Since Both DMA and Automated trading make use of strategies that exploit short-lived market opportunities and have a high dependence on speed of execution, the co-location facility will facilitate faster trade execution required for DMA and Automated trading. This Co- location Facility will be extended to members to host their servers near to BSE’s trading platform within BSE premises.

In this regard Trading Members may please note the following:

- In view of limited availability, racks will be allotted on first come first basis based on the receipt of complete application along with the payment. However, if there is more demand than the availability, additional space will be made available.
- The minimum period for which the racks are allotted will be one year and any renewal would require an advance notice of 30 days.
Format of the Application form for applying for usage of Co-location facility is enclosed Annexure-1
The racks will be allotted on 1 rack basis. No partial rack would be allotted.
Members may take private leased lines to the co located rack(s) for ongoing system administration of their servers. These lines can be availed from Airtel / MTNL / Reliance / Tata

- Due to security reasons, Physical access to co-location data centre will be restricted only to the initial set up and access for periodic or urgent maintenance if any would be only with prior permission from BSE and that such permission will be allowed only after Exchange trading hours.

- The Exchange would not be responsible for insuring the member assets at the co-location premises.
- The co location facility will be Tier3 grade with following specifications: -

Standard 19 Rack(s) with 3KVA power.
Uplink ports to BSE Campus LAN for BSE connectivity.

- The Exchange will provide co-location facility on best efforts basis and it will not be responsible for any direct / indirect / consequential, harm / loss / damage of any kind for whatsoever reason including but not limited to power failure, air conditioning failure, system failure and loss of connectivity. Further, the Exchange shall not be liable for any stoppage in co-location facility owing to legal or regulatory requirement.

Format of the Application form for applying for usage of Co-location facility is enclosed in Annexure -1.

Further you can avail Co-location facilities offered by Third Party Providers. The charges and facilities offered through Third Party Providers will be intimated to the members in due course.

For further technical clarification and queries kindly contact Mr. Jitendra Choudhari on telephone number +91 22 22728301 and email on jitendra.choudhari@bseindia.com

Source: BSE, 26.02.2010

Filed under: Asia, Exchanges, India, News, Trading Technology, Algo Trading, BSE Bombay Stock Exchange, Co-Location, DMA Direct Market Access, Exchanges, India, Order Routing

February 25, 2010 • 5:10 am 0

Cusip and Avox launch business entity identifier scheme

CUSIP Global Service (CGS), managed by Standard & Poor’s on behalf of the American Bankers Association and Avox Limited, a majority-owned subsidiary of the Deutsche Borse Group, announced the launch of the CABRE Directory Service. The service is a combined effort by CGS and Avox to provide a universal identification system for global business entities. The CABRE Directory uses a new standard code developed by CGS and Avox that identifies Issuers, Obligors and Counterparties on a global basis.

“CABRE” is an acronym for CUSIP Avox Business Reference Entity identifier and has been designed to address market need for the lack an accepted universal identification system.

“With regulatory oversight continuing to focus on single name exposure and the need to identify issuers, counterparties and obligors, interest in the CABRE has increased since CGS and Avox announced their partnership last year. The financial industry recognizes CGS’ extensive classification expertise and the value of Avox’s validation processes and methodology,” says Scott Preiss, VP for CUSIP Global Services in New York. “Given their client-driven system of maintaining global entity data, Avox is an ideal partner to augment our time-tested system of unique issuer and obligor identification.”

The CABRE has been designed as a 10-character code that contains the 2-character ISO domicile code based on the location of the entity and embeds the CUSIP Issuer number, when available. The service will be offered to global market participants in a bulk-file format. This initial offering contains CABREs, Avox IDs and location data for over 250,000 entities from around the world and across all industry classes. The goal for CGS and Avox is to identify every institution involved in the lifecycle of a financial instrument.

Ken Price, Chief Executive Officer of Avox stated, “The launch of the CABRE Directory coupled with the data verification expertise within Avox create the foundation of a system that will grow exponentially over the next few years. The availability of a CABRE for each entity location will ultimately help our clients manage diverse areas of their organizations, such as financial controls, risk management, anti-money laundering and operations. Â With this partnership, we can leverage the community of user firms that provide intelligence about changes to business entities taking place every day in the market.”

CUSIP Global Services and Avox support the development of an ISO standard that seeks to develop a common language for global identification of entities but see a near-term need to replace the array of proprietary codes that are currently used by counterparties.

Source: Finextra, 23.02.2010

Filed under: Data Management, Market Data, News, Reference Data, Risk Management, Standards, AVID Avox Identifer, Avox, Business Identifyer, CUSIP, Data Management, Meta Data, Reference Data, Risk Management, S&P Standard & Poor, Standards

February 23, 2010 • 5:17 am 0

SGX Launches “Trading Strategies Series” Investor Education Series

Singapore Exchange today launched the “Trading Strategies Series” of articles for investors.

Aimed at making professional trading methods accessible to a wider group of investors, the “Trading Strategies Series” is part of investor education efforts by SGX to broaden the knowledge of market participants and over time, enhance market depth.

The series will kick off with six articles on “pair trading”, a trading strategy that can be used in both bull and bear markets. This strategy starts off with the investor selecting two financial products (for example, two stocks, two futures contracts or two exchange traded funds) with prices that tend to move together or are, in other words, highly correlated. When the price ratio of this pair exceeds their normal range, the investor will buy (or go long) one of the two stocks and sells (or go short) a position in another.

Various financial products such as Extended Settlements Contracts (ES), Exchange Traded Funds (ETF) and Index Futures contracts will be placed under the spotlight in the “pair trading” articles. Written in simple English, the articles provide a step-by-step guide on the trading method, from the identification of highly correlated pairs to simulations using real-live historical data.

The “Trading Strategies Series” of articles are available to the public at

http://www.sgx.com/wps/portal/marketplace/mp-en/investor_centre/investor_resources/educational_articles/trading_strategies_header

and, www.sias.org.sg and seminars covering these topics will be conducted in the coming months.

Source: MondoVisione, 23.02.2010

Filed under: Exchanges, News, Singapore, Education, Exchanges, Market Analysis, Retail Investors, SGX Singapore Stock Exchange, Singapore, Trading Events

February 21, 2010 • 8:57 pm 1

BMV – Mexico’s Stock Exchange to change trading hours from March 15 – March 31st, 2010

Mexico’s Stock Exchange will change its trading hours from 08:30-15:00 local time (09:30-16:00 EST) to 07:30-14:00 local time (09:30-16:00 EST) from March 15 thru March 31 to adjust to the daylight savings time diferences between Mexico and the US. Mexico’s Bolsa will continue to trade the same trading hours that the NYSE is open, during that period.

Source: IXE,19.02.2010

Filed under: BMV - Mexico, Exchanges, Latin America, Mexico, News, BMV Bolsa Mexicana de Valores, Exchanges, Mexico

February 20, 2010 • 7:35 am 0

The bumpy road to the international A-share trading board

While government officials and listing candidates are enthusiastic about the launch of the planned trading board, there are several hurdles that remain unresolved.

Designed to allow overseas companies to list shares on China’s major stock exchange, Shanghai’s highly anticipated international trading board is being heralded as a way to provide a powerful lift to the country’s equity markets in the year of the tiger, but it is turning into a paper tiger, experts say.

The planned board, which has been under discussion for years without tangible progress, was brought into the spotlight again last summer after government officials revealed the Chinese authorities’ determination to launch it. However, key issues such as share sale limits, the use of funds raised through share sales, accounting standards, and listing requirements remain unresolved.

Companies aiming for the international board first need to comply with Chinese accounting standards. However, it is very unrealistic to require companies with assets all over the world to comply with Chinese book-keeping rules and auditing standards, industry experts say.

Every year, the translation of an audit report based on general international standards into the Chinese accounting format could cost a typical company from $5 million to more than $10 million extra — an expense that all cost-conscious financial executives would want to avoid, experts say.

Another issue is that the nation’s corporate and securities laws currently only apply to domestic companies, and Chinese lawmakers are not ready to restructure the legal framework and make it more adaptable for foreign companies that want to offer A-shares.

The preparation of HSBC’s highly anticipated Shanghai share sale is suspended for “at least six months”, sources familiar with the deal said last week, citing technical problems in the listing process.

Also, with China running a top-down, command-and-control economy, the current review and approval procedure for the country’s equity capital market is an obstacle for foreign companies, strategists argue.

“Listings in China receive too much intervention by the government,” said Lou Gang, a China strategist at Morgan Stanley. “Launching an international board would test the current system for launching IPOs (initial public offerings),” he said.

Even so, apart from HSBC, other global players such as Standard Chartered Bank and the New York Stock Exchange have also expressed their enthusiasm for listing on the international trading board.

While overseas issuers are concerned about China’s listing regulations, Chinese investors and regulators are worried the outsiders will soak up too much liquidity from the country’s equity market.

The cautious sentiment among investors is evident in online forums in China, where the planned international trading board is hotly debated. Some say the foreign companies will take advantage of the Shanghai market’s high offering prices and valuations and make use of the stock exchange as an automatic teller machine.

Others warn that HSBC’s listing will absorb funds worth as much as 20 Nanpu Bridges in Shanghai — one of the longest highway bridges in the world, with a total construction cost reaching Rmb820 million ($120 million).

“HSBC will take 20 Nanpu Bridges away from us,” one forum participant wrote. “Don’t let the irrigation fertilise others’ fields,” wrote another.

Analysts suggest the authorities should require foreign companies to re-invest the proceeds from their share sales exclusively in China or give approval only to red-chip companies, which are registered overseas but with most of their assets and operations on the Chinese mainland.

Generally, regulators and market observers concur that the introduction of foreign company listings is a must and will help improve the country’s equity markets and accelerate the process of making the Chinese yuan freely convertible.

“Foreign company listings will set a good example for domestic companies in China,” said Wei Sun, Morgan Stanley’s China CEO.

Tu Guangshao, Shanghai’s vice mayor and a former vice-chairman of the China Securities Regulatory Commission, said at the Asian Financial Forum in Hong Kong last month that the municipal government strives to build the city into an international financial centre and that the creation of the planned board is in progress.

The international trading board was first brought to the table by Unilever Company in 2000 when the US retailer of personal care products expressed its interest in an A-share listing in a bid to strengthen its network and brand-name penetration in China. Discussion about the board has been under way ever since, but a concrete plan has yet to be made.

Commerce minister Chen Deming said at an investment conference in Xiamen last September that China will certainly allow listings by qualified foreign invested companies on the mainland stock exchange.

PricewaterhouseCoopers predicted last month that the board will start trading in the second half of this year. The new board may help the Shanghai Stock Exchange (SSE) to raise up to Rmb300 billion ($44 billion) through IPOs this year, overtaking its Hong Kong counterpart, which is forecast to raise HK$300 billion ($39 billion), the international accounting firm said.

Source: FinanceAsia.com,19.02.2010 by Lillian Liu

Filed under: China, Exchanges, News, Capital Markets, China 中国, cross-listing, Exchanges, IPO, Listing, SSE Shanghai Stock Exchange

February 18, 2010 • 5:12 am 0

Managing Corporate　Actions Risk – January 2010 – IRD – Insight Reference Data

Despite industry efforts to reduce financial losses typically associated with corporate actions processing, managing risk remains one of the major challenges for the corporate actions industry. On November 18, Inside Reference Data gathered leading corporate actions professionals in a web forum to discuss what more could be done to help improve the situation.

Source: Insight Reference Data, 29.01.2010

IRD_Jan2010_ManagingCorporate Action_ Report

Filed under: Corporate Action, Data Management, Library, News, Reference Data, Risk Management, Corporate Action, Data Management, Data Vendors, Risk Management, Survey

February 12, 2010 • 9:53 pm 0

BM&F Bovespa raises CME stake; plans new e-trading platform

BM&FBOVESPA S.A. (“BVMF”) hereby announces to its shareholders (in compliance with the provisions of article 157, paragraph 4, of Brazilian Corporate Law No. 6404/1976 and CVM Instruction No. 358/2002 of the Brazilian Securities and Exchange Commission) that on this date it has entered into a Memorandum of Understanding with the CME Group, Inc. (“CME”), which controls the Chicago Mercantile Exchange (CME), New York Mercantile Exchange (NYMEX), Board of Trade of the City of Chicago, Inc. (CBOT) and Commodity Exchange, Inc. (COMEX), for the creation of a global preferred strategic partnership with an aim to: (i) pursue strategic investments and commercial opportunities with other international exchanges, on a shared and equal basis; (ii) jointly develop a multi-asset class trading platform for the trading of equities, derivatives, fixed income securities and other exchange-traded or OTC-traded assets; (iii) increase its ownership interest in CME to 5%, equivalent on this date to approximately one billion U.S. Dollars (USD1 billion); and (iv) receive a seat on CME’s Board of Directors.

1. BVMF and CME as Global Preferred Strategic Partners

BVMF and CME will work together as “global preferred strategic partners” to jointly identify strategic investments and commercial partnerships with leading equities and derivatives exchanges. BVMF and CME will seek to make these investments and/or partnerships on a shared and equal basis, subject to legal and regulatory restrictions, as well as to the relationship history and specificities of both BVMF and CME in connection to the other exchange where the investment and/or the partnership will be made.

However, when it is not possible or appropriate for BVMF and CME to co-participate, such as when a legal or regulatory restriction applies; or when the third-party exchange of interest is not willing or is unable to partner with either BVMF or CME; or if joint participation is impracticable, the Exchange which holds the leading investment or partnership position will continue the transaction alone.

In order to operate their global preferred strategic partnership, BVMF and CME will hold joint quarterly meetings of their senior executives (Strategic Committee), in order to analyze the potential investment opportunities and commercial partnerships of BVMF and/or CME with any other exchange throughout the world, as well as the attributes, affinities and contributions each might have in connection with the third-party exchange targeted for investment and/or partnership.

2. New Unique and Integrated Multi-Asset Class Trading Platform for Equities, Derivatives, Foreign Exchange, Fixed-Income Securities, Other OTC Products and Block Trading

Based on technology derived from the CME Globex® trading system, as well as on new technology to be jointly created by the parties, BVMF and CME will jointly develop a new electronic trading platform, with capacity to process transactions in less than one millisecond. This new platform will house all of the following BVMF segments under the same infrastructure:

Individual equities (cash market);
Derivatives based on equities; equity indices, interest rates, exchange rates and commodities;
Spot foreign exchange currency;
Spot government bonds;
Spot private bonds; and
Other OTC derivatives.

The new platform will also include a trading system for large blocks of shares (block trading).

The first to be developed will be the derivatives module, which until the beginning of 2011 will replace the Global Trading System (GTS), which is the current electronic trading system utilized by BVMF for its financial and commodity derivatives segment. The second module will be implemented by year-end 2011 to replace the Mega Bolsa, SISBEX and BovespaFIX trading systems currently used by BVMF for the equities, federal government bond and private bond markets, respectively.

Both BVMF and CME will have the right to make commercial use of the new electronic trading system and will share revenues resulting from this commercialization. BVMF will be entitled to commercialize the new platform freely in South America, Central America, Mexico and China. This will apply to other countries as well, where commercial use may occur as long as it is associated with an investment transaction, subject to certain restrictions pertaining to product listing by the exchange where an investment has been made.

BVMF and CME will have co-ownership of the new multi-asset class trading platform, sharing their intellectual properties, as well as the derived enhancements, upgrades and software, as co-authors through cross, perpetual and irrevocable licenses.

As an additional reflection of their new partnership, CME will transfer to BVMF all knowledge that is needed for the operation and development of the new platform, based on the CME Globex® technology. With this transfer BVMF will become fully independent and autonomous to also commercialize the new platform in certain regions and under certain conditions.

For the complete implementation of each phase of the new platform, including the acquisition of all the related underlying technology and intellectual rights, BVMF investments, over the next 10 years, are estimated for the amount of USD175 million (one hundred and seventy five million United States Dollars) at a present value of USD100 million (one hundred million United States Dollars).

3. Increase of BVMF’s Ownership Interest in CME

BVMF will raise its equity stake in CME from the current 1.8% to 5% of CME’s equity capital, placing each company on an equal footing with respect to its equity investment in the other.

This investment by BVMF, which is equivalent to approximately USD620 million, is subject to BVMF shareholder approval, for which in due course a shareholders’ meeting will be called. Adding this amount to BVMF’s current stake in CME brings its total investment to approximately USD1 billion, subject to lockup restrictions until February 26, 2012. This is the same lockup restriction timeframe that applies to the original cross investment.

4. BVMF Representation in CME’s Board of Directors

For the full implementation of their new partnership, CME and BVMF will nominate and recommend to their respective shareholders the election of a representative from each exchange to the other Board of Directors. Therefore, during the time that their minimum reciprocal investments are held, each exchange will have a representative in the other exchange’s Board.

5. Other Joint Opportunities

i. Mutual Cooperation in Central Counterparty Services for OTC Derivatives – BVMF and CME will prospect mutual opportunities to develop the central counterparty services they provide for the OTC derivatives markets. Such opportunities may include netting agreements, collateral management, and the use of CME ClearPort ® technology and know-how for registration, settlement and risk management of OTC derivatives transactions.

ii. Multilateral Order Routing and Market Data Distribution System – BVMF and CME will jointly develop multilateral order routing and/or market data distribution systems for the equities and derivatives markets of both current and future global partner exchanges.

6. Term

The global preferred strategic partnership has an initial term of fifteen (15) years, with the relevant strategic and commercial aspects being realigned on its 5th and 10th anniversaries. During this time, it will continue in effect for as long as each party holds a two percent (2%) minimum stake in the other party’s capital.

7. Expansion and Internationalization of the Equities Segment

The current CME partnership and the development of a new state-of-the-art multi-asset class trading platform will provide BVMF with the best of conditions to support the increase in order flows resulting from the ongoing expansion and development of the Brazilian capital market, as well as the future increase in order flows that will come from the order routing system that NASDAQ OMX is currently developing. Through this system, the connected U.S. broker-dealers will be able to send buy and sell orders for individual equities traded at BM&FBOVESPA, and the connected Brazilian brokers will also be able to send buy and sell orders for individual equities traded at NASDAQ OMX. Therefore, this partnership consolidates BVMF initiatives to provide its users with a solid technological infrastructure, in order to guarantee a globally aligned connection, which is geared towards the broad development of the Brazilian capital markets.

Source:BM&FBOVESPA, 12.02.2010

Brazil’s BM&F Bovespa is increasing its stake in Chicago’s CME Group to five per cent, at a cost of $620 million as part of an agreement between the two exchanges that will also see them jointly develop a multi-asset class electronic trading platform.

The pair, who already have an alliance, say they will become “global preferred strategic partners”, with the Brazilian outfit paying $275.12 per share to increase its stake and put a representative on the CME Group board.

CME Group, which already holds a stake of about five per cent in BM&F Bovespa, will also repurchase up to 2.35 million shares of its common stock to offset the dilution from the issuance of shares to its partner.

In addition, the two will build an electronic trading platform that will be deployed by BM&F Bovespa for use in its cash equities and derivatives markets. Slated to launch early next year, it will be based on technology derived from the CME Globex trading system and able to process transactions in less than one millisecond.

BM&F Bovespa says it expects to spend around $175 million on the related underlying technology and intellectual rights for the system over the next 10 years.

The agreement will also see both given the opportunity to license the platform to other exchanges internationally and they will work together on strategic investments and commercial opportunities.

Edemir Pinto, CEO, BM&F Bovespa, says: “I have no doubt that, after this partnership and based on technology derived from the CME Globex trading system, as well as on new technology to be jointly created by the parties, this new BM&F Bovespa technological standard will produce a system to meet the high performance requirements of the world’s most demanding traders in multiple products.”

Craig Donohue, CEO, CME Group, adds: “Our proposed transaction with BM&F Bovespa will further expand the breadth of our technology and distribution capabilities into the global cash equities and options markets, while strengthening our strategic partnership and enhance our mutual opportunities to invest in and partner with the world’s leading multi-asset class exchanges.”

Source: Finextra, 12.02.2010

Filed under: BM&FBOVESPA, Brazil, Exchanges, Latin America, News, BM&FBOVESPA, Brazil, Capital Markets, CBOT, CME, Currency, Derivatives, Equity, Exchanges, Fixed Income, FX Foreign Exchange, Green Exchange (NYMEX, Order Routing, Trade Connectivity, Trading Network

February 9, 2010 • 9:57 pm 2

Asean exchanges select Nyse Technologies to build trading network

A group of Asean stock exchanges have appointed Nyse Technologies to build a direct market access electronic trading link.

Last February Bursa Malaysia, the Philippine Stock Exchange, Singapore Exchange and the Stock Exchange of Thailand outlined plans to create a single access point to ease cross-border trading and attract more international fund flows into the region. Indonesia’s exchange was initially part of the group but is no longer involved.

The partners have now signed a letter of intent appointing Nyse Euronext’s IT unit to design, build and manage the technology required for the trading link.

Nyse Technologies says its system will be underpinned by a resilient networking infrastructure that will interconnect the Asean member exchange’s and, through them, their respective communities.

The system will include services that tap this network to provide integrated market data feeds from all the participating markets and a standardised entry point for trading. Expansion of the trading link’s markets will be helped by the risk management and controls put in place, says Nyse.

In addition, the system will integrate with the Nyse Euronext communication network infrastructure, SFTI. This will give STFI members streamlined and cost effective access to trading in the Asean Trading Link markets.

Duncan Niederauer, CEO, Nyse Euronext, says: “The Asean Trading Link will strengthen the competitiveness of the member exchanges and enable them to better serve their customers. National and regional interest will be well served by giving investors greater access to global capital to facilitate new development, growth and wealth creation.”

Francisco Edralin Lim, CEO, Philippine Stock Exchange, adds: “Nyse Technologies brings to the table vast experience in the Exchange solutions business and we are confident that they will deliver cutting edge solutions that meet all our requirements. We are also excited about the possibilities of leveraging their extensive order routing networks to bring order flow into the Asean markets.”

Source, Finextra, 08.02.2010

Filed under: Asia, Exchanges, Malaysia, News, Singapore, Trading Technology, ASEAN, Bursa, DMA Direct Market Access, Exchanges, Indonesia, Malaysia, NYSE Euronext, Order Routing, Philippines, SET, SGX Singapore Stock Exchange, Thailand, Trade Connectivity

February 6, 2010 • 7:37 am 0

BMV Mexican Stock Exchange’s Market Performance Report December 2009

Click here to download BMV Mexican Stock Exchange’s market performance report for December 2009

Source: BMV , 05.02.2010

FiNETIK recommends:

BMV_Mexican_Stock Exchange’s market performance report for November_2009

BMV- Bolsa Mexicana de Valores – October 2009 Performance Report

BMV- Bolsa Mexicana de Valores – September 2009 Performance Report

BMV- Bolsa Mexicana de Valores – August 2009 Performance Report

BMV- Bolsa Mexicana de Valores – July 2009 Performance Report

BMV – Bolsa Mexicana de Valores – June 2009 Performance Report

BMV – Bolsa Mexicana de Valores – May 2009 Performance Report

BMV – Bolsa Mexicana de Valores – April 2009 Performance Report

BMV – Bolsa Mexicana de Valores – March 2009 Performance Report

BMV – Bolsa Mexicana de Valores – February 2009 Performance Report

BMV – Bolsa Mexicana de Valores – January 2009 Performance Report

BMV – Bolsa Mexicana de Valores – December 2008 Performance Report

BMV - Bolsa Mexicana de Valores – November 2008 Performance Report

Filed under: BMV - Mexico, Exchanges, Latin America, Mexico, News, BMV Bolsa Mexicana de Valores, Capital Markets, Exchanges, IPC, Performance Report

February 6, 2010 • 1:03 am 0

China to lead Asian distressed debt opportunity in 2010

Domestic bank credit acts in a similarly pro-cyclical way to foreign debt. When growth is booming, credit growth hides bad loans in favorable nonperforming loan ratios because assets are growing so fast – leading to a booming economy.
The problems show up if a macro shock of some sort intervenes. In the case of China, the shock will be a combination of higher inflation and interest rates. As growth slows, NPLs appear, banks pull back on loan expansion, and growth slows even more, creating a new wave of NPLs. Superficially “safe” NPL ratios suddenly reverse dramatically and risk sinking the whole macro ship.

http://asiasentinel.com/index.php?option=com_content&task=view&id=2283&Itemid=422

In Shanghai, outstanding loans to the real estate industry accounts for 27 percent of the total outstanding loans, according to Yan Qingmin, head of Shanghai Branch of China Banking Regulatory Commission (CBRC).
“The non-performing loan (NPL) ratio in Shanghai’s commercial housing development loans kept rising in 2009,” Yan warned.

http://english.people.com.cn/90001/90778/90859/6888068.html

Source: CHINDA, 04.02.2010

Filed under: Asia, Banking, China, Risk Management, Services, China 中国, Cinda Asset Management, Debt, Distress Debt, Economic Crisis, NPL Non Performing Loan

February 3, 2010 • 11:30 am 2

Brazil: BM&FBOVESPA Exchange news and events February 2010

BM&FBOVESPA launches foreign exchange non-deliverable forward contract

BM&FBOVESPA has authorized, as of January 18, the registration of dollar, euro, yen, and cross-rate non-deliverable forward contracts in its OTC market.

Initially, only foreign exchange transactions established by the Brazilian Central Bank can be registered. As of March 1, BM&FBOVESPA will also authorize the registration of transactions with exchange rates calculated by the following information sources: U.S. Dollar/Euro parity exchange rate calculated and published by the European Central Bank; U.S Dollar/Euro exchange rate fixed by WMR/Reuters; Japanese Yen/U.S. Dollar parity exchange rate calculated and published by the Central Bank of Japan; and Japanese Yen/U.S. Dollar exchange rate fixed by WMR/Reuters.

Click here for further details regarding the contract.

BM&FBOVESPA appoints executive for its London operations

The Exchange announces the appointment of Cathryn Lyall as Director of BM&FBOVESPA (UK) Ltd, a wholly-owned subsidiary of BM&FBOVESPA. Ms. Lyall will be responsible for the set up and expansion of the new BM&FBOVESPA European office located in London, including all product and sales related activities in EMEA.

Ms. Lyall will also be responsible for establishing regulatory relationships, education and training programs, speaking opportunities, and developing marketing, and business development related activities targeted at potential customers in the region. She will report to Joao Lauro Amaral, head of International Business for BM&FBOVESPA.

Exchange hosts event to seal partnership between Brazil and the International Accounting Standards Board (IASB) on convergence to IFRS

BM&FBOVESPA hosted, on 28 January 2010, the signing of a Memorandum of Understanding between the International Accounting Standards Board (IASB), the Brazilian Federal Council of Accounting (CFC) and, the Brazilian Accounting Pronouncements Committee (CPC).

The partnership is an important step towards the insertion of Brazil in the international forum on the establishment and adoption of a set of accounting standards known as the IFRS (International Financial Reporting Standards).

Since only a handful of countries have signed memorandums with the IASB, such partnership demonstrates Brazil’s commitment towards global regulatory issues. The agreement’s objective is to expand the convergence to IFRS norms in Brazil and to also guarantee a greater participation of Brazilian companies in regulatory discussions.

Exchange registers record fourth quarter trading

The average daily financial volume traded at the Brazilian Securities, Commodities and Futures Exchange equity markets reached a record BRL 6.840 billion during the fourth quarter of 2009. The amount surpasses in 3.34% the previous record, of BRL 6.618 billion, set during the fourth quarter of 2007. It is also 31.19% greater than the average daily volume traded in the third quarter of 2009, of BRL 5.214 billion.

Due to this historic record, the average daily volume registered during the second semester of 2009 reached BRL 6.001 billion; 32% superior to the average daily volume of BRL 4.560 billion, registered in the first six months of last year. During the fourth quarter, foreign investor participation in the traded volume was 31.7%, followed by individual investors (29.1%), institutional investors (27.1%), financial institutions (9.8%), and others (0.06%).

BM&FBOVESPA is the third most important market in terms of IPO operations in 2009

The Brazilian Exchange was the backstage for US$ 12.5 billion in capital raised through IPOs operations in 2009, ranking it in 3rd place as the most important IPO market in the world, only behind the Hong Kong and Shanghai Exchanges.

The total capital raised by shares issues accounted for US$ 41.7 billion in 2009, placing BM&FBOVESPA among the top 10 global markets, according to the World Federation of Exchanges.

Exchange ranks as the second largest equity options market and the sixth largest derivatives market in the world

According to the Futures Industry Association, BM&FBOVESPA has the second largest equity options market in the world. It registered a total of 369 million contracts traded from January to September 2009. The ranking is calculated based on the number of single stock options contracts and/or cleared.

Also, according to the same institution, BM&FBOVESPA was the 6th largest exchange in the world in terms of number of futures and options contracts traded from January to September 2009. That period registered a total trading volume of 649,203,768 contracts, which represents an increase of 12.6% over the same period in 2008.

Exchange sets DMA trading records

On 28 January 2010, the Exchange set a new DMA trading record (derivatives segment), reaching 836,153 contracts traded. The previous record was 773,396 contracts traded (on 21/01/2010). DMA trading via order routing with CME Group also set a record, on the same date, reaching 52,053 trades. The previous record of 51,422 was set on 21/01/2010.

In December, Direct Market Access (DMA) trading of the derivatives market segment registered a total of 8,238,292 contracts traded via DMA*, with 998,834 trades carried out through the GTS trading platform. In November, the total was 8,350,565 contracts traded in 1,103,437 trades. The volumes registered by access modality in December in comparison to the previous month are as follows:

Traditional DMA – 3,546,606 contracts traded, in 385,040 trades, in comparison to 3,838,053 contracts traded and 444,987 trades;

DMA via order routing with CME Globex (CME Group’s electronic trading platform) – 2,144,247 contracts traded, in 506,991 trades, in comparison to 2,321,877 contracts and 557,088 trades.

Via DMA Provider – 2,277,446 contracts traded, in 57,677 trades, in comparison to 1,900,815 contracts traded and 43,486 trades;

DMA via co – location – 269,993 contracts traded, in 49,126 trades, in comparison to 289,820 contracts traded, in 57,876 trades.

BM&FBOVESPA 2009 market performance

BM&F segments
Derivatives markets in the BM&F segment (including financial and agricultural derivatives) totaled 373.41 million contracts and a financial volume of BRL 26.78 trillion in 2009, compared to 391.62 million contracts and BRL 28.01 trillion in financial volume in 2008. The daily average of contracts, in 2009, was 1,517,941, as opposed to 1,572,783 in 2008. Mini contracts traded reached 12.95 million in 2009, in contrast 10.08 million in 2008.

Bovespa Segments
The equity markets (Bovespa segment) reached a total volume of BRL 1.3 trillion in 2009, compared to BRL 1.37 trillion in 2008. The average daily financial volume was BRL 5.28 billion, in contrast to BRL 5.52 billion in the previous year. During 2009, 81.75 million trades were carried out, as opposed to 61.02 million in 2008. In 2009, the daily average of trades reached, 332,349, surpassing the average of 245,071 trades in 2008.

Exchange Holidays for 2010

For the list of Exchange Holidays for 2010, click here. There will be no trading activities in either of the equities market (Mega Bolsa), or the corporate fixed-income securities markets (Bovespa Fix and Soma Fix), or the derivatives market (GTS), and BM&FBOVESPA will be closed for business on these holidays.

Source: BM&FBOVESPA, 02.02.2010

Filed under: BM&FBOVESPA, Brazil, Energy & Environment, Exchanges, Latin America, News, Risk Management, Trading Technology, Algo Trading, BM&FBOVESPA, Brazil, Capital Markets, Co-Location, Commodities, Currency, Derivatives, DMA Direct Market Access, ETF, Exchanges, Futures and Options, Index, IPO, Latin America, Order Routing, Performance Report, Regulation, Trading Network

February 3, 2010 • 11:15 am 1

Mexico: Eyes on the US economic recovery – February 2010 – IXE Banif – Market Analysis

Positive outlook, but depends on the US recovery

We expect stocks in Mexico to trade on the following drivers: i) US economic recovery, although we understand China is gaining more international importance at global level, but it ought to affect specific stocks (like commodities – i.e. GMexico); ii) Mexican Peso. We see a positive outlook for the currency, given the expected economic recovery this year and the government recent measures to increase its international reserves; iii) Government fiscal situation. On one hand, it is known that Mexico has an imbalance in the fiscal side, given the high dependence from oil revenues. On the other hand, we do not expect another sovereign debt rating downgrade and therefore stocks have already priced in this movement; and iv) Each company particular catalyst.

Link to US (now for the good)

We expect Mexico to confirm a strong retraction of the economy in 2009 (-7% YoY in ’09), due to the world crisis and specially the negative effect on the US economy. We believe the link to US that had a negative effect in Mexico in the past, now it should the opposite effect and help the economy to pick up. Remittances from Mexican workers living in US were affected by higher unemployment in the United States, but they should gradually improve throughout the year. We forecast Mexico to present a GDP growth of 2.9% YoY in 2010. Bad news for Mexican stocks could arise from higher interest rates in US, followed by higher rates in Mexico. We understand this movement might only come by the end of the 3Q10.

More stable Peso

Banxico, the Central Bank in Mexico, recently announced new measures to increase its international reserves, which would allow for a more stable Peso in the future. We currently forecast the Peso at P$12.7/US$, which might have a fine tuning depending on how aggressive Banxico sets its new policy. It is important to note that reserves are at their historical highs, despite one of the worst years in modern history.

4Q09 results to confirm the economic weakness

Most companies will report 2009 results in February. They should reflect the weak economic moment on a YoY basis, but in general some QoQ improvement, excluding seasonal effects. Hence, results should be no catalyst for the stocks, but management discussion and more details of guidance for 2010 will be the focus of investors.

Risks are related to the US economic recovery

We believe that economic data pointing to slower than expected economic recovery in the US is the main risk for the stock market in the short term. This would mean lower Mexican exports, inflow of dollars to the country (tourism and remittances) and eventual higher risk aversion at global level.

For detailed market analysis and report click here Allocation Mexico – February 2010

Source: IXE Banif, 02.02.2010

Filed under: BMV - Mexico, Exchanges, Latin America, Mexico, News, Services, Wealth Management, Banif, BMV Bolsa Mexicana de Valores, Currency, Exchanges, FX Foreign Exchange, Index, Investment, IXE, Market Analysis, Mexican Pesos, Mexico, Performance Report, Risk Management

February 2, 2010 • 11:30 am 0

Santander starts marketing Latin American funds in Asia

Banco Santander, a Spanish bank with a large presence in Europe and Latin America, has created a new role in Hong Kong to develop its asset-management business in Asia.

With the necessary licences in place, Alexander de Laiglesia will concentrate on selling funds manufactured by Santander Asset Management in Latin America and Europe to Asian wholesale distributors and asset managers.

De Laiglesia, a managing director, has been with the firm for 20 years, starting in Tokyo as a deputy branch manager. He returned to Japan from Madrid in 2002 with a secondment to Shinsei Bank. He moved to Hong Kong last year, and has been developing the asset-management role for the past several months. De Laiglesia has also worked in Hong Kong and the Middle East in the 1980s with Standard Chartered Bank, and he speaks Japanese.

Santander pursues a universal banking model in its core markets of Spain, Portugal, the UK and the countries of Latin America, including Brazil, as well as the US. The bank has built investment teams in those countries.

The group mainly provides local products to its local investors. It cross-sells some products to provide these local customers with international exposure and may also provide third-party funds. Worldwide, Santander Asset Management manages €120 billion ($168 billion) of assets.

Asian markets are not core to this business. “We are not here to manage assets,” says de Laiglesia. “We are here to channel investments from Asia to our core markets.” That means competing in the niche of selling Latin America funds to Asian wholesalers and domestic fund houses. Santander will also seek to develop sales to institutional investors as well.

“We are the largest regional asset manager in Latin America, with big investment teams in markets such as Brazil, Chile, Mexico and Argentina,” de Laiglesia says.

Santander has already notched up business in Japan as adviser to a couple of Brazil equity funds launched by Daiwa Asset Management, and in Korea, where Industrial Bank of Korea sells a Latin America equities product. Japan, in particular, has wealth, its investors are comfortable with Brazilian securities and that’s an asset class where domestic asset managers do not have a local presence, de Laiglesia says.

Santander is flexible with regard to the type of relationship it will pursue with Asian distributors; it may act as an investment adviser, a provider of white-label products or a provider of mutual funds from its Luxembourg range. The firm will also seek segregated mandates from or sales of its Luxembourg funds to Asian institutions.

In addition to applying for regulatory licences, de Laiglesia is still researching which markets to focus on and which thematic products to highlight. Japan is the priority, but the region’s other large markets — Australia, Greater China, Singapore and South Korea — are also important.

Source: AsianInvestor.net, 02.02.2010

Filed under: Asia, Australia, Banking, Brazil, China, Colombia, Hong Kong, Japan, Korea, Latin America, Malaysia, Mexico, News, Peru, Services, Singapore, Wealth Management, Asset Management, Brazil, Hong Kong, Japan, Korea, Latin America, Mexico, Private Banking, Retail Banking, Santander, Singapore, Taiwan, Wealth Management

February 2, 2010 • 1:37 am 0

Brazil: Samba and 4Q09 results ahead- February 2010 Banif- IXE Market Analysis

Bottom up analysis

February is shorter compared with other months and in Brazil the Carnival this year will take place around mid-February, which will decrease the number of working days. We expect the stock market to trade based on companies’ specific factors, such as disclosure of 4Q09 results and less on economic data. Hence, we set our portfolio on each particular stock catalyst and less concentrated on Vale and Petrobras.

Interest rate: no changes in Brazil or US

Although inflation figures will still indicate the economy is overheated, needing a more austere monetary policy, there will not be a COPOM meeting in February. In US, the FOMC will also not meet this month. Therefore, there will not be any changes in interest rates this month.

Politics: too early to start the campaign

While we expect presidential candidates (Dilma Rousseff and Jose Serra) to work behind the scenes, we should not see any major political move before Carnival in Brazil. Candidates should resign their current political posts until April’10 and validate their candidacies inside their parties. Only after that, the political debate will effectively start and volatility in the stock market will increase, mainly for those related to regulated sectors and companies controlled by the government. We would expect this volatility to decrease by mid-year, given FIFA’s World Soccer Cup and eventually increase again before elections, which will take place in October.

4Q09 results: weak export figures/favorable domestic sales

In general, we expect weak sales from exporters, on a YoY comparison, given lower volumes and despite some price recovery, they were not fully restored. In the domestic side, sales and margins should have a nice improvement compared with 4Q08. In our suggested portfolio we took into account the expected results, particularly for those to report in February and also compared with the stock performance to access whether they are or not priced in.

Risks come from abroad

Risk aversion has increased at global level and the Brazilian real lost ground in the past days. The devaluation is more connected to the dollar strength rather than specific factors that lead the real to depreciate. In any case, if we continue to see this devaluation in the coming weeks, investors may rearrange their portfolio and buy more exporters (selling consumer staples and homebuilders), given the negative effect the currency devaluation will have in inflation and the ensuing impact in interest rates and the population’s purchasing power.

Read complet report and analysis here Banif-IXE: Allocation Brazil – February 2010

Source: Banif-IXE, 01.02.2010

Filed under: BM&FBOVESPA, Brazil, Exchanges, Latin America, News, Banif, BM&FBOVESPA, Brazil, Brazilian Real, Commodities, Currency, Derivatives, Exchanges, FX Foreign Exchange, IXE, Latin America, Market Analysis, Risk Management

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