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April 29, 2010 • 7:55 am 2

Latin American Electronic Trading: Caliente!

Latin America, dominated by Brazil and Mexico, is growing faster than fortune seekers from the global exchanges, banks and vendors can fly south.  The major stock markets were up 400% over the last decade, and the Brazilian derivatives market, BM&F, is now the sixth largest derivatives market in the world with growth of 67% in Q1 2010. In March 2010 the number of single stock option contracts traded on the Brazilian derivatives exchange BM&F passed the number of contracts traded on CBOE, ISE or NasdaqOMX.

Brazil and the rest of Latin America have not received the same adulation as other emerging market rock stars.  This changed in 2009, as Brazil emerged early and unscathed from the worldwide financial crisis.

Latin America’s time has now come. In the last two years, major exchanges have gone public, trading volumes have soared, brokers have rushed to deploy electronic trading services, early mover technology vendors have racked up impressive sales, and high frequency trading has begun.

Proprietary trading shops of local banks co-located at the exchanges battle it out with traders who have just flown in from Chicago.  Brokerage firms rush to deploy new algorithms to their buy-side clients. Exchanges play “hard to get” with global exchanges eager to bolster their emerging market credentials. Local technology vendors with relationships try to keep out foreign vendors with advanced technology. Brazilian bankers migrate back from New York to Sao Paulo because the bonuses are better. And everyone’s trying to arbitrage local stocks against American Depository Receipts.

This report is your map.
Latin America. Caliente!

This 41-page PowerPoint report focuses on the two largest markets Brazil and Mexico, but also covers Chile, Argentina, Peru and Columbia. The report covers both equity and listed derivative markets.

The report is divided into these sections:
- Overview of the economies in the region, and stock market performance.
- Exchange trading volumes – Data on size and growth rates of Latin American exchanges with a focus on BOVESPA (Brazil equities), BM&F (Brazil derivatives) and Mexico Exchange.
- Exchanges – Review of the current state and future plans of the major exchanges in each market, including BM&FBovespa. Mexico Exchange, Santiago Exchange (Chile), and Argentinian exchanges. Technologies used internally, trading systems and networks offered to clients, partnerships such as BM&F and CME, regional alternative marketplaces.
- Brokerage – Local and international equity and derivative brokers, recent acquisitions, technologies used in house and offered to clients.
-Three case studies of local brokerage firms showing what in-house and vendor trading technologies they use and offer to clients.
- Buy Side – Data on the types of asset management firms and what assets they own. Pension funds/hedge funds/retail investors/proprietary trading groups/foreign investors. Trading software and network vendors used by the buy side, including both local and foreign vendors.
- Technology vendors – Market shares by OMS technology vendor, including local and global vendors. Usage of OMS, EMS, equity and derivatives systems, market data and network connectivity. Including local vendors CMA, Extol, Cedro, Estado, Apligraf and international vendors GL Trade, Bloomberg, Reuters, Fidessa, Marco Polo Networks, Charles River RTS, Pat Systems, Trading Technologies, CQG, TradingScreen, NYSE Technologies/NYFIX, BT Radianz, Progress Software Apama, Streambase.  In-depth information about local OMS, market data and network vendors CMA and Extol.
- High frequency trading – Data on the growth of DMA/algorithmic trading/high frequency trading in Brazil during the last two years across both equity and derivatives trading. Review of what high frequency or algorithmic services exchanges and brokers provide. Case study of a high frequency trading firm in Brazil, with detail on the technologies used
- Merger & Acquisition targets – local technology vendors with potential to be acquired.

About the Author
Martin Koopman has worked in the securities trading industry as President Cameron Systems, President North America Orc Software, CEO FMO Pty Ltd and as a consultant with The Boston Consulting Group. He lives in New York City and can be contacted at martink@aditat.com

Source: TABB Group, 28.04.2010

http://www.tabbgroup.com/PublicationDetail.aspx?PublicationID=608&MenuID=44&ParentMenuID=2&PageID=43

Filed under: Argentina, Brazil, Central America, Chile, Colombia, Exchanges, FIX Connectivity, Latin America, Mexico, News, Peru, Trading Technology, , , , , , , , , , , , , , , , ,

April 21, 2010 • 8:50 am 0

BM&F BOVESPA News April 2010

BRAiN initiative turns Brazil into an international hub for investments

Aiming at strengthening Brazil’s position as a potential investment and business hub, with regional focus on Latin America, BM&FBOVESPA, ANBIMA, and FEBRABAN announced the creation of a new association entitled BRAiN – Brasil Investimentos & Negócios (Brazil Investments & Business). It represents several sectors of society and relies on the sponsorship and participation of various private sector institutions to promote Brazil as an important financial hub. Paulo Oliveira Jr., BM&FBOVESPA’s former Chief Business Development Officer, is now the Chief Executive Officer of BRAiN. For further information, access www.brainbrasil.org.br

Visit BM&FBOVESPA at Tradetech London – booth 61

BM&FBOVESPA is joining TradeTech Europe – the 10th Equity Trading and Technology Summit to be held in London’s Excel Centre, on April 21st and 22nd. BM&FBOVESPA will promote its products and services at booth 61, and its Director of BM&FBOVESPA (UK) Ltd, Cathryn Lyall, will participate in the panel “Assessing The Best Opportunities For Trading In The Emerging Markets – DMA vs. Other Options”, on April 21, at 3:00 p.m. Ms. Lyall will be discussing the best investment opportunities in Brazil. Please find additional information at http://www.bmfbovespa.com.br/en-us/home.aspx?idioma=en-us

BM&FBOVESPA and CME Group at the Brazil Investment Summit

BM&FBOVESPA and CME Group will jointly exhibit at the Brazil Investment Summit, in São Paulo, from April 26 to 29. The international event gathers more than 500 market professionals, including institutional investors, hedge funds, assets managers, and brokerage houses. On April 28, both exchanges will participate in a discussion panel on facilitating quantitative trading in Brazil, which will address the growing participation of algo trading in the Brazilian derivatives and equities markets, as well as other DMA trading opportunities. For further information, access http://www.terrapinn.com/2010/bis

<!–

Join BEST Brazil Europe and discuss Brazilian investment opportunities

This year’s European edition of BEST – Brazil Excellence in Securities Transactions road show will take place in London, on April 27th, and in Paris on April 29th. BM&FBOVESPA co-organizes the event with other financial and capital markets institutions in Brazil and will present the latest investment opportunities in the country. www.bestbrazil.org.br

–>

MegaDirect new version

Since April 9th, the MegaDirect, an electronic communication interface, has a new version. The interface enables the insertion, modification, and cancelation of offers placed on the Mega Bolsa, BM&FBOVESPA equities segment trading platform. As of 1 June 2010, the MegaDirect will become the only form of access for all automatic DMA connections to the Mega Bolsa. The new system performs up to tenfold faster than the Multigateway, the Exchange’s other operating interface, which will be deactivated on June 1.

U.S. Senator Christopher Dodd discusses market regulation trends with BM&FBOVESPA

The Chairman of the U.S. Senate Committee on Banking, Housing, and Human Affairs, Senator Christopher Dodd visited BM&FBOVESPA in April. The American Senator met with BM&FBOVESPA’s CEO, Edemir Pinto, and other officers and discussed the Exchange’s vertically integrated business model, risk management system, OTC markets and the industry’s regulatory trends.

BM&FBOVESPA and Cepea launch Spot Ethanol Price Indicator

BM&FBOVESPA and the Center of Advanced Studies in Applied Economy (Cepea) launched the Spot Hydrous Ethanol Price Indicator Paulínia (SP) Esalq-BM&FBOVESPA. The new indicator is a daily gauge for hydrous ethanol with price formation in Paulínia, in the state of São Paulo, a fuel distribution hub in Brazil. The indicator is calculated through price information provided by market participants, like producers, distributors and brokers.

DMA trading reaches historic records at BM&FBOVESPA

Derivatives trading via Direct Market Access at BM&FBOVESPA reached historical records in March, with 18,404,891 contracts traded, in 1,983,044 trades; in contrast to the records registered in the previous month of 12,537,023 contracts traded, in 1,485,032 trades. DMA trading via order routing with CME Group’s Globex also reached a record 3,931,514 contracts traded in March, in 1,039,213 trades. Previous trading records had been set with 3,246,598 contracts traded in October 2009, and 816,205 trades in February 2010.

Equity market transactions carried out through order routing via DMA registered a historical financial volume record of BRL136.86 billion and 11,867,547 trades. In February, the financial volume was BRL112.32 billion and 9,546,982 trades.

BM&F segment trading volumes registered by access modality in March in comparison to the previous month are as follows:
Traditional DMA – 9,245,230 contracts traded, in 669,288 trades, in comparison to 5,807,581 contracts traded and 505,698 trades;
Via DMA Provider – 4,646,935 contracts traded, in 91,217 trades, in comparison to 3,200,086 contracts traded and 75,421 trades;
DMA via order routing with CME Globex (CME Group’s electronic trading platform) – 3,931,514 contracts traded, in 1,039,213 trades, in comparison to 3,171,892 contracts and 816,205 trades;
DMA via co-location – 581,212 contracts traded, in 183,326 trades, in comparison to 357,464 contracts traded, in 87,708 trades.

BM&F Segment March 2010

The derivatives market segment totaled 71,691,088 contracts and BRL4.75 trillion in volume. That compares to 39,306,238 contracts and a volume of BRL2.47 trillion in February. The daily average of contracts traded in the derivatives markets set a new record: 3,117,004.

BOVESPA Segment March 2010

The equities market segment reached a total volume of BRL148.81 billion, in 9,038,122 trades, with daily averages of BRL6.47 billion and 392,962 trades, respectively. In February, total volume reached BRL118.06 billion, 7,355,993 trades, with daily averages of BRL 6.55 billion and 408,666 trades, respectively.

Source: BM&FBOVESPA 20.04.2010

Filed under: BM&FBOVESPA, Brazil, Exchanges, Latin America, News, , , , , , , , ,

April 13, 2010 • 6:47 am 1

Charles River Expands Brazil and Latin America Presence

Charles River Development has expanded its regional presence in Sao Paulo, Brazil with local, multi-lingual employees providing implementation, consulting and support services for regional clients and prospects.

In a company statement, Manuel Astiasaran, Director of Operations in Latin America for Charles River, said, “Our expanding client base reflects Latin America’s changing regulatory climate. Heavy regulation limiting investment to domestic securities has been relaxed, such as the 2009 regulation from Brazil’s Commisso de Valores Mobilirios, making way for international investments. This has increased buy-side demand for front- to middle-office systems that automate domestic and international investment operations.”

The Charles River Investment Managing System (IMS) is available in Portuguese and Spanish and supports region-specific security types and workflows, including Mexican corporate and government bonds, as well as Brazil’s CDI-linked debentures and complex inflation-linked government notes.

The Charles River IMS includes pre-built compliance libraries with rules across 35 regulatory bodies in 20 countries, including rule libraries for Mexico, Brazil and Chile.

Source: Advanced Trading, 06.04.2010

Filed under: BM&FBOVESPA, BMV - Mexico, Brazil, Chile, Latin America, Mexico, News, Risk Management, Trading Technology, , , , , , , , , , , ,

April 12, 2010 • 6:30 am 0

Trading Technologies and BM&FBOVESPA Agree to Expand TT’s Presence in Brazil

Trading Technologies International, Inc. (TT), the leading provider of order-entry software and solutions for professional derivatives traders, and BM&FBOVESPA, Latin America’s largest exchange, announced on 12 April 2010 that they have entered into a partnership to provide direct access to BM&FBOVESPA’s new multi-asset class platform via TT’s X_TRADER® platform.

TT’s direct connection to BM&FBOVESPA will provide traders from anywhere in the world with access to the exchange through TT’s X_TRADER® platform. The new connection will provide TT’s customers with access to the main derivatives contracts listed on the exchange, including:

  • Interest Rates – One-Day Interbank Deposit, Long Term Interbank Deposit and ID x US Dollar Swap with Reset contracts
  • Equity Index Futures – Ibovespa, Mini-Ibovespa, Brazil Index-50 and General Market Price Index
  • Currency – USD Futures, Mini-USD and Euro Futures
  • Agricultural – Arabica Coffee, Real-Denominated Corn, Soybeans, Crystal Sugar,  Live Cattle and USD Denominated Ethanol
  • Sovereign Debt Instrument (Bonds) – A-Bond Futures, Three-, Five- and Seven-Year Brazilian Sovereign Credit Default Swaps and Ten-Year US Treasury Notes
  • Metals – Gold Futures and Spot contracts

“BM&FBOVESPA is very pleased with this partnership that will contribute for the growth of our market. This partnership is aligned with our goal to offer advanced technological solutions for our customers”, said Cicero Augusto Vieira, BM&FBOVESPA Chief Operating Officer.

“We believe this agreement with BM&FBOVESPA will provide a superior ultra-low-latency connection to the exchange. We expect the co-location and proximity-based computing solutions planned for our new TTNET hub in Sao Paulo will provide our global customer base with a critical edge,” said Harris Brumfield, CEO of TT.

Source: TTNET, 12.04.2010

Filed under: BM&FBOVESPA, Brazil, Exchanges, Latin America, News, Trading Technology, , , , , , ,

April 5, 2010 • 6:27 am 0

VAM: Vietnam Monthly Market Analysis- March 2010

Market Update – VAM Monthly Newsletter – March 10


Vietnams GDP growth in 1Q10 is estimated at 5.8%, much higher than the 3.1% figure from a year ago. Comparing the two quarters, industrial production is up 13.6%, retail sales up 24.1%, and exports now only down 1.6%. While the GDP growth is less than the previous quarter, it must be noted that Tet (Lunar New Year) will generally have a negative impact on GDP growth in the first quarter of each year in Vietnam as compared to the rest of the year.

Average yearly inflation is now up to 9.5%, and the foodstuffs and building materials categories continue to be the primary contributors to the rise. The trade deficit in 1Q10 is estimated at US$3.5bn, compared to a trade surplus of US$1.5bn in 1Q09. However, the number is not as bad as it sounds for two reasons. First, the 1Q09 was anomalous as the surplus was made entirely possible by primarily the re-export of gold due to the price gap of roughly US$35/ounce in Vietnam compared to the world market at the time. Second, on a monthly level the trade deficit is declining over 4Q09, and inflows into the capital account are picking up quite strongly. An estimated US$4bn in FDI and remittances flowed into Vietnam in 1Q10. The evidence is in the currency market, where free market and official rates seem to be in equilibrium for the moment.
Nonetheless, on 12 March 2010, Fitch Ratings placed Vietnam’s long-term foreign and local currency ratings on negative watch with potential for a downgrade, citing weakening confidence in the Dong and a lack of transparency regarding foreign reserves and the balance of payments. It does seem that Vietnams foreign reserves were drained substantially in 2009 due to the continued high trade deficit and the slowdown in FDI and remittances. But for the time being, imbalances in the currency, current account, and inflation seem well addressed.
Again we must report that the VN-Index had another sideway month, finishing at 499.24, up just 0.5%. The market was rallying quite handsomely until Fitch lowered its outlook.
Official audited results are being announced by corporates as listed companies are in their AGM season. Generally the earnings have been good and better than management guidance. Some companies have encouraging targets of 30  100% bottom line growth in 2010, with those on the higher end of the spectrum mostly riding on new products and/or newly added capacity. On the other hand, lacking support from provisions reversal, tax break, low cost materials and interest subsidies, some plastics, pharmaceutical and auto component companies have planned quite low targets compared to their earnings posted in FY09. As for the stock market, we think FY09 results have already been priced in and going forward stock prices will be mostly driven by targets for the current fiscal year and how management execute their plans.
Our View – News on macro economy, credit and monetary policies, whether official or not, prevails corporate news to drive the bourses. The states commitment to curbing inflation, stabilising the banking system as well as lowering borrowing costs in the last few days of March have eased investors panic. We still uphold our interest in Consumer staples, pharmaceuticals, construction materials, and real estate, especially the construction materials and real estate players in Hanoi, which may benefit from the citys rapid expansion and surge in infrastructure development to celebrate the 1,000th year anniversary of the capital city.
Sector Valuation Table

Industry group

Weight %

1M %

3M %

YTD %

2009PE

2010PE

2011PE

2014PE

P/B

Dvd Yield

ROE

Gross Margin

Op Margin

Net Margin

Net D/E

Vietnam Market

100.0%

-2.4%

-1.9%

-1.9%

15.8

13.2

11.8

8.5

2.8

2.6

19.0

33.0

23.4

23.1

1.3

Automobiles & Components

1.4%

-2.2%

-7.4%

-7.4%

11.6

9.5

7.6

5.4

3.6

0.4

27.2

17.3

10.1

6.9

0.7

Banks

21.0%

-3.6%

-5.5%

-5.5%

13.8

12.1

10.7

8.3

1.7

2.0

11.0

35.4

23.1

17.0

5.9

Capital Goods

3.6%

-2.0%

-6.1%

-6.1%

12.8

11.6

10.3

8.3

2.8

3.2

21.6

26.0

17.3

13.3

0.1

Commercial Services & Supplies

0.1%

4.0%

-3.6%

-3.6%

-

-

-

-

-

-

-

-

-

-

-

Consumer Durables & Apparel

1.0%

8.4%

-0.5%

-0.5%

13.5

11.7

10.4

8.9

2.0

1.7

14.0

8.5

4.5

2.9

-

Consumer Services

1.6%

-5.5%

-14.2%

-14.2%

-

-

-

-

-

-

-

-

-

-

-

Diversified Financials

5.1%

-36.2%

-36.5%

-36.5%

10.3

9.7

9.0

7.3

1.5

0.1

13.7

46.7

41.0

128.2

-0.4

Energy

5.7%

-0.3%

-13.9%

-13.9%

8.3

8.5

7.5

5.7

2.7

3.8

29.7

27.2

23.1

15.3

2.0

Food, Beverage & Tobacco

12.0%

0.2%

9.6%

9.6%

12.0

10.0

8.2

6.2

3.8

3.7

30.0

31.8

18.5

17.4

-0.3

Household & Personal Products

0.3%

28.7%

41.0%

41.0%

43.9

36.5

29.0

14.2

1.3

0.9

4.8

24.4

8.1

4.0

0.7

Insurance

7.9%

-4.2%

27.0%

27.0%

27.4

24.2

21.3

16.4

2.8

2.3

10.0

23.7

2.3

8.7

-1.7

Materials

8.8%

2.3%

1.9%

1.9%

10.2

9.1

8.1

6.9

2.5

3.3

23.3

26.7

21.5

19.5

-0.1

Pharmaceuticals & Biotechnology

3.8%

-5.6%

-18.1%

-18.1%

9.7

9.1

7.3

4.6

1.7

3.4

15.7

32.5

10.4

8.2

-0.1

Real Estate

18.9%

1.9%

-1.3%

-1.3%

27.1

19.1

17.2

11.4

4.3

1.9

21.2

46.6

41.2

27.4

0.9

Retailing

4.0%

8.3%

5.7%

5.7%

12.2

11.1

10.2

6.1

3.4

3.4

26.7

10.8

6.2

4.3

-0.2

Transportation

2.1%

2.0%

-3.1%

-3.1%

16.9

19.4

24.6

7.8

1.5

1.7

11.7

20.5

15.5

10.2

0.6

Utilities

2.8%

-5.6%

-9.5%

-9.5%

7.4

5.5

4.9

6.0

1.2

5.6

15.6

39.0

37.1

36.5

0.4

* The Sector valuation table is calculated by VAM in-house Company Analysis System  VCAS.
** Vietnam Market comprises of both the Ho Chi Minh Stock Exchange (HoSE) and the Hanoi Stock Exchange (HNX).

Filed under: Asia, Exchanges, News, Risk Management, Vietnam, , , , , , , , , , ,

April 2, 2010 • 7:35 am 0

Mexico: Economic recovery slowly materializing – April 2010- IXE-BANIF Monthly Analysis

We are increasingly positive on the Mexican market, although we await further hard data to confirm our expectations. We see many indications of a recovery, which are already reflecting on the local stock market. However, we believe that the continuation of a positive news flow might support further appreciation.

We continue to base our portfolio strategy on specific catalysts for the companies we find attractive. First quarter results have already started to influence some of our choices. For April, we maintained the core of our March portfolio, with weight unchanged for America Movil, Cemex, Genomma LAB, Grupo Mexico, Mexichem and Walmex, which together account for 70% of our portfolio’s total weight. For the remaining 30%, the changes were the inclusion of Femsa, Penoles ICA and Tlevisa, a reduction in weight of ARA and the withdrawal of Autlan, Axtel and GEO.

Our estimated GDP may need another upward revision

Recent statements from the Finance Minister suggest that the Mexican economy might grow 5% in 2010, while the official government estimate remains at 4.2%. If hard data confirm this trend, we might find our own 4.1% growth estimate demanding a further upward revision, although we increased our figure just last month. Recently released statistics, such as the creation of new jobs, the reduction in the rate of unemployment to 5.3% from 5.9%, and industrial production growth, support this economic strength. Expectations are for local consumption to recover, and demand in the US for Mexican products has already begun increasing.

Additionally, data released for February show that vehicle sales grew nearly 100% YoY.

Expectations for interest rate and inflation remain unchanged

Expectations for interest rates, currently at 4.5% pa, continue unchanged, as we continue to foresee increases of 0.25% applied only in September and in October. This is in line with expectations for 2010’s inflation, which we continue to estimate at 4.94%. S

See detailed Detailed Market Analysis Report – April 2010

Source: IXE Banif, 01.04.2010

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

April 2, 2010 • 7:22 am 1

BMV Mexican Stock Exchange’s Market Performance Report February 2010

Click here to download  Mexican Stock Exchange February 2010 Performance Report

Source: BMV , 26.03.2010

FiNETIK recommends:

BMV-Bolsa Mexicana de Valores – January 2010 Performance Report

BMV- Bolsa Mexicana de Valores – December 2009 Performance Report

BMV- Bolsa Mexicana de Valores – November 2009 Performance Report

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, , , , , , , , , , ,

April 2, 2010 • 7:00 am 0

Osaka Securities Exchange: Merger With Jasdaq Securities Exchange, Inc.

Osaka Securities Exchange Co., Ltd. (OSE) is pleased to announce that OSE and Jasdaq Securities Exchange, Inc. (Jasdaq) have merged on April 1, 2010. In accordance with the merger, OSE have started to operate JASDAQ and NEO.

Source: MondoVisione, 01.04.2010

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

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