Raj Mahajan, president of SunGard’s global trading business, said: “The economy in Latin America continues to grow at an exceptional pace. Led by Brazil, which has achieved an annual average growth of 3.7% over the last ten years, (nearly twice that of the US), the boom includes Mexico, Chile, Columbia and Peru. SunGard is helping Latin American trading firms capitalize on the change and growth in that region, by providing low latency execution to help them compete in the global race for liquidity with greater transparency, efficiency and access to network connectivity.”
The ten trends SunGard has identified as shaping Latin American trading are:
1. Mexico, Chile, Columbia and Peru are quickly gaining recognition as key markets in Latin America, as their combined trading volumes edge closer to Brazilian levels.
2. Brazil’s markets are going completely electronic, increasing firms’ ability to more efficiently and more quickly access liquidity. As a result volumes have skyrocketed; a 400% increase in activity in the last decade.
3. Demand for international order flow is high as volumes are rising in emerging markets: Brazil is ranked the fourth largest emerging market according to a recent article.
4. The sell-side in Latin America is consolidating; large international players are buying local brokers to quickly increase their presence and credibility.
5. FIX connectivity is increasing: As firms receive and execute more order flow internationally, the adoption of FIX has taken hold in Latin America, helping to efficiently connect buy- and sell-side firms.
6. Trading volumes are increasing across the region and firms need real-time data and analytical tools for greater transparency into market movements. It is predicted that Brazil will see a 4.9% increase in equity market performance in 2011, according to a recent report. From 2006-2010, fund flows into Brazil have totaled $10 billion.
7. As more international investors want exposure to LatAm markets, the networks into and out of these markets becomes more important. Local firms and international players are investing in telecommunications infrastructure to ensure bandwidth and reliability for their trading networks.
8. With major exchanges allowing third party software firms direct access to exchanges, traders have more network connectivity options and can now take advantage of independent software vendors to provide their technology platforms.
9. As LatAm trading volumes skyrocket, the demand for financial information within the region is growing. In terms of financial market data and news, Latin America is second only to the Asian nations in allocating more budget for this resource.
10. LatAm trading firms are investing in low latency execution and stable customizable trading solutions, leaving legacy technologies behind for greater operating efficiency.
Danielle Tierney, junior analyst at Aite, said, “Networks are the key to sustaining growth in Latin America. Approximately 25 percent of the volume traded in Latin America is international, driving the search for new sources of liquidity and establishing connections to powerful global networks.”
Sourc: SunGard, 12.09.2011