BMV – Mexico « FiNETIK – Asia and Latin America

February 15, 2012 • 5:38 pm 0

LatAm Traders reach home base – Brazil/Mexico

Latin America continues ease market access for foreign capital, and in the process, garners home bias from local participants.

Throughout the 1980s, U.S. capital flow to foreign markets averaged roughly U.S. $50 billion per year. Such levels have risen greatly to pre-financial crisis times; outflows to foreign capital markets increased to reportedly $2.1 trillion in 2007. While net inflows dipped by approximately 75% during the financial crisis, the emerging markets today have bounced back at a healthier rate than the sluggish developed economies of the U.S and Europe.

Due to its macroeconomic and private-sector growth, as well as its ease of market access, U.S. investors and traders have come to favor Latin America. Currently, a reported $57 billion of U.S. dollar is being poured into Brazil—often seen as the region´s most developed nation.

Mexico comes in second with approximately $20 billion coming in from the U.S. last year. Local entities have poured interest in Mexico as well, as Mexican pensions, which aggregate $150 billion, have a primarily domestic mandate. Carlos Slim, the world’s richest investor, also recently announced plans to surge a $10 billion peso investment in Mexico’s telecom industry.

As a result of budding local and foreign interest, LatAm’s sell side has gone to work in building a “best-of-breed” suite of products to help provide access to Mexico. The Bolsa Mexicana de Valores, the country’s equity exchange and its derivatives exchange, MexDer are channeling efforts to better technology and infrastructure to attract liquidity providers. Yet, just how effective is the push to be better?

In 2011, MexDer experienced a 30% increase of trades to roughly 43,000 a day. Mexican brokerage assets were $21.4 million in 2005, to $2 billion in 2011–a clear reap of rewards from the sell side’s efforts to host opportunities for market participants.

While high frequency traders increased their activity in Mexico by 105% in 2011, buy-side views on trading via local resources have been mixed.

“Local knowledge on the part of on-the-ground brokers and exchanges is useful, but, it’s not essential to have a well developed sell side,” said Nick Robinson, director of the $250 million dollar Aberdeen Latin American Equity Fund. “As long as the market works and you can use the market without counter party risk then that should give (participants) enough comfort.”

MarketMedia, 15.02.2012

Filed under: BM&FBOVESPA, BMV - Mexico, Brazil, Exchanges, Latin America, Mexico, Trading Technology, BM&FBOVESPA, BMV Bolsa Mexicana de Valores, Brazil, Co-Location, Derivatives, DMA Direct Market Access, Fund Industry, HFT High Frequency Trader, Latin America, Low Latency, MexDer, Mexico, Order Routing, Trading Hubs

February 10, 2012 • 9:04 am 0

Fidessa on Latam Trading – Opportunities and Challenges

Electronic trading in Latin America continues to be a hot subject, with action moving beyond Brazil to other countries. Low-Latency.comspoke to Fidessa’s head of business development for the region, Alice Botis, to get an update, and a handle on low-latency initiatives in the marketplace.

Q: Can you start by some scene setting – where is the electronic trading action in the Latam market?

A: Electronic trading is already well established in ;Brazil, Mexico and Chile, and with the introduction of MILA, both Colombia and Peru have also adopted FIX order routing. Colombia has not yet opened their market to allow FIX connectivity to third-party network providers, but they are looking forward to making that available in 2012-2013.

In Peru, the decision to make FIX connectivity available to third-party network providers is still pending regulatory approval, but if approved, they expect implementation to move swiftly.

Buy-sides in Latin America have been slow to adopt electronic order routing, but where they have, they often still pick up the phone to have a conversation with the trader for local colour. But, by having electronic connectivity, the sell-side is able to enter the order into their OMS and send unsolicited notices of execution back to the client which minimises manual errors.

The move toward the adoption of electronic order routing in Latin America is significantly driven by the desire to attract international order flow and to make trading in Latin America as seamless as trading in other mature markets.

Q: Where does Fidessa have operations, and connectivity? What’s the latest news on that front?

A: Fidessa recently opened an office in Sao Paulo to serve our clients in Latin America, including Mexico. The office was opened to provide on-the-ground technical and production support to our local clients. Our plan is to continue building out the appropriate infrastructure to offer data centre hosting, hosted services such as a local ticker plant and a local network hub to facilitate North, South and local order routing and execution. We will also be hiring local staff to ensure support in both Spanish and Portuguese.

We currently have 21 receiving brokers in Latin America concentrated in Brazil, Mexico, Chile and Colombia, and we are in discussions with several others in the region to join the Fidessa network.

Q: What are the infrastructure challenges of working in Latam?

A: The greatest infrastructure challenges are being seen by international players looking to gain access to the local markets. There are many challenges, such as hardware and telecom acquisition, so they seek the expertise of local brokers, custodians and technology vendors to help them put the appropriate infrastructure in place to start trading.

It is important to understand the workflow the client is looking to facilitate to assure a balance of cost and speed. As demand in the region continues to increase, things will only get easier, and we can hope, with scale, less expensive.

Q: Focusing on Brazil, it looks like competition is heating up there with Bats and Direct Edge planning to take on BM&FBOVESPA. What opportunities does this open up for Fidessa?

A: With the introduction of fragmentation comes the increased responsibility for brokers to provide best execution to their clients. In some markets, the exchanges themselves will be mandated to provide aggregated quote data and routing to the best price, but even in these markets, brokers will compete for business by aggregating the data feeds and connecting directly to each market themselves to more quickly identify and access best price and volume.

Whether you are an international player who has experienced fragmentation in other markets or a local player who has never had to overcome this challenge before, there will be a significant investment in time and money to accommodate the data feed, connectivity and smart order routing requirements. Working with experienced vendors in other markets like Fidessa, who has worked with Bats and Direct Edge, can provide a time to market and cost advantage to implementing the required technology and infrastructure.

Q: Are Latam markets looking to invest in low-latency technologies and offerings in a similar way that markets in North America and Europe have? Is this ‘me too’ or are they learning from others’ experience and doing things differently?

A: Brazil, Mexico and Chile have all made significant investments in their exchange technology to provide lower latency, higher throughput execution for their participants, setting the stage for algorithmic and HFT participation in their market. Brazil is leveraging the experience and expertise of the CME by partnering with them for the implementation of their new multi asset trading engine. Chile has extended their proprietary technology along with partnerships with technology providers like IBM for their low-latency messaging, and Mexico ;is enhancing their proprietary technology to provide significant improvements to latency and throughput.

Brazil has seen the highest rate of clients seeking to set up local infrastructure to facilitate low-latency market access for algorithmic and HFT participation. But, there is a delicate balance that firms are trying to find between investment in low-latency technology and return on investment on that technology purchase. That said, the amount of high frequency trading participation in the region as a whole is still growing, so as volume continues to increase, so might the returns on those technology investments.

Q: What about regulatory oversight for all of these developments? Is there a MiFID in the works for Latam?

A: There is not currently a regional regulation such as MiFID or Regulation NMS for best execution in place because Latin America is not yet fragmented. However, each country does have its own regulatory rules in place to oversee the various different types of order flow and assure quality execution for retail transactions.

In Chile, for example, there are three exchanges that are not electronically linked. The brokers are not obligated to provide best price. As long as they demonstrate they are trading on the primary exchange, and provide the best price along with the executed price on the confirmation, they are in compliance with the local rules.

As fragmentation is undoubtedly coming to LatAm, I do believe you will see local regulators augment their current rules to protect their market participants.

Q: What do you expect to be some other specific developments in the coming year in Latam, for the markets and for Fidessa?

A: As far as market changes that might affect the region, the potential addition of Mexico to the Integrated Latin American Market (MILA) will certainly affect the development of the region. Mexico has already signed a letter of intent to join MILA, and if they do, it will further drive connectivity in the region and the need for trading systems to manage higher volumes and provide multi-regional orders and execution capabilities.

The region is very dynamic with growth, change and investment, and we are excited to be working with partners in the region who are driving the extension of our trading services to accommodate their growth and success.

Source: Low Latenency, 08.02.2012

Filed under: BM&FBOVESPA, BMV - Mexico, Brazil, Chile, Colombia, FIX Connectivity, Latin America, Mexico, Peru, Trading Technology, FIX, Latin America, Trading Hubs, Trade Connectivity, Order Routing, Brazil, DMA Direct Market Access, MexDer, BMV Bolsa Mexicana de Valores, Mexico, Colombia, Peru, Chile, BM&FBOVESPA, Algo Trading, Low Latency, Fidessa, Regulation, A-TEAM, EMS OMS, MILA Mercado Integrado LatinoAmericano

February 3, 2012 • 12:40 am 0

Mexico – Durable, Consistent and Undervalued

Since global markets unraveled back in 2008 we’ve again been reminded that even developed economies can have a tough time dealing with crisis (think TARP, bailouts, recessions and policy restructurings). In some cases, seemingly simple issues like inflation can be the main reason international investors turn away. However, in looking at mid-tier countries within emerging markets, one exception is Mexico.

The Mexican peso, for example, has appreciated by nearly 20 percent since the peak recession level of two years ago. In addition to a more predictable and forecastable currency, Mexico enjoys direct investment from both the United States and China. Many experts agree that this flow of capital helped Mexico reach a 4 percent annual gross domestic product growth rate in 2011.

The peso’s solid gains can be attributed to a variety of factors, but are directly correlated to market statements made by U.S. banking and government officials. Interest rate stability, for example, ensures the peso’s projected outlook by hedging its value with that of the dollar as well as Mexico’s import-export relationship with the U.S. Most recently, on the day the U.S. Federal Reserve announced that it would maintain its low interest rate program through 2014, the peso rose 0.6 percent, to $13.0190 per U.S. dollar. That marked a 7 percent climb for the month of January.

The China import-export story grabs all the headlines but in fact, the U.S. exports three times as much to Mexico as to China. Indeed, President Barack Obama recently mentioned $100 billion as how much the U.S. exports to China every year. What he failed to mention was that the U.S. exports $300 billion to Mexico annually. And don’t forget, China is far away and its export business with the U.S. is also far away. That’s one reason why NAFTA countries and the EU are courting Canada and Mexico to open more favorable trade policies.

From an investment, trading and trade relations perspective, Mexico boasts free-trade agreements in which tariffs are lower than many countries. So low, in fact, that nearly 90 percent of all its exports are essentially duty free. For example, Mexican goods are exported duty-free to the U.S., Canada, Europe, Latin America and Japan. This past week, Mexico announced a preliminary trade surplus of $7.7 million for December 2011. Most other countries, on the other hand, trade with a much smaller surplus if not deficit. Investors keen on taking advantage of this advantage can use the iShares MSCI Mexico Index.

In fixed income, Mexican notes return more than the average of other emerging market debt. What’s more, Mexico correlates better with the U.S. than other high profile emerging markets like Brazil, China or Russia.

Mexico has proven that it is able to withstand both global and internal drags on its economy while still holding its position among the advanced emerging markets community such as Brazil, Czech Republic, Hungary, Malaysia, Poland, South Africa, Taiwan and Turkey.

Taking a closer look at the value to an individual or institutional investor, Latin America generally – and Mexico specifically – continues to hold and return value better than other emerging markets. Debt and inflation from Europe more closely impact Russia, India and China, for example, whereas Mexico and LatAm are more closely tied to the U.S., where the economy is slowly rebounding

Mexico vs. other LatAm hotspots ….read full article at Tabb Forum

Source: Tabb Froum, Dan Watskin, 02.02.2012

Filed under: BMV - Mexico, Latin America, Mexico, News, BMV Bolsa Mexicana de Valores, Brazil, China 中国, FX Foreign Exchange, MexDer, Mexico, Risk Management, Trade Connectivity

December 6, 2011 • 8:44 am 0

Mexico: BMV Mexico´s stock exchange signs agreement with MILA of Chile, Colombia and Peru

During the Second Pacific Alliance Summit celebrated in Merida, Yucatan Mexico on Sunday, December 4^th, the Mexican Stock Exchange (subsidiary of BMV Group) signed an agreement of intent with the Exchanges of Colombia, Peru and Chile to join Mercado Integrado Latinoamericano (MILA). President Felipe Calderon (Mexico), President Juan Manuel Santos (Colombia), President Ollanta Humala (Peru) and President Sebastián Piñera (Chile) were all on hand to witness the accord.

The agreement, which will begin to explore operational and technology requirements of this partnership, was signed by Dr. Luis Téllez President of BMV Group, Juan Pablo Córdoba, President of Bolsa de Valores de Colombia, Francis Stenning, General Manager of Bolsa de Valores de Lima (Peru), Mr. Pablo Yrarrázaval, President of Bolsa de Comercio de Santiago and Mr José Antonio Martínez Manager of Bolsa de Comercio de Santiago.

The partnership, which is subject to the authorization of regulators and legal adjustments, will integrate BMV Group to MILA with the goal of increasing listings and bringing further technological and operational benefits to participants in the region.

About BMV Group

BMV Group is a fully integrated Exchange Group that operates cash, listed derivatives and OTC markets for multiple asset classes, including equities, fixed income and exchange traded funds, as well as custody, clearing and settlement facilities and data products for the local and international financial community.

BMV is the second largest stock exchange in Latin America with a total market capitalization of over US$ 453.8 billion. The Exchange is home to some of the most recognizable and profitable global corporations, including: beverage giant Grupo Modelo, whose brands include Corona Extra and Pacifico; América Móvil, one of the largest telecommunications companies in the world; CEMEX, the world’s biggest building materials supplier; and Televisa, the largest media company in the Spanish speaking world, among many others. In addition, MexDer (the Mexican Derivatives Exchange) is also part of BMV Group and is the leading marketplace for trading benchmark Mexican derivatives products.

About MILA

Mercado Integrado Latinoamericano (MILA) is a regional partnership of the Peruvian, Chilean and Colombian Exchanges that started with an agreement signed on November 9^th, 2010 to integrate a new trading alternative for LATAM equity markets. It aims i) to expand listing opportunities, ii) to add value in order routing, and iii) to provide market data distribution of the integrated market. It was launched on May 30^th, 2011.

Source: Business wire, 05.12.2011

Filed under: BMV - Mexico, Chile, Colombia, Exchanges, Latin America, Mexico, News, Peru, BCS Bolsa de Comercio de Santiago, BMV Bolsa Mexicana de Valores, BVC Bolsa de Valores de Colombia, BVL Bolsa de Valores Lima, Chile, Colombia, Exchanges, Latin America, Luis Tellez, MILA Mercado Integrado LatinoAmericano, Peru, Trade Connectivity

November 21, 2011 • 10:57 am 0

Mexico´s Exchanges take huge steps to boost High-Speed Trading.

The Mexican Exchange, which is the second largest exchange in Latin America, announced a number of strategic and technology initiatives designed to promote foreign investment in the Mexican financial markets and its position as a Latin American leader in high-frequency trading.

While Brazil continues to be the hottest emerging market in Latin America, the Mexican Exchange (BMV Group), is taking huge steps to boost its growth in the high-speed marketplace.

Mexico now provides worldwide participants with seamless, high-speed and efficient access through low touch direct market access (DMA), high speed co-location services, and FIX standard protocol for order routing and market data Part of Mexico’s success is down to its determination to improve its operative rules to better comply with international market standards, as well as adopting new technology.

In 2012, the Mexican Exchange will announce the launch of a new trading engine, internally developed. This multi-market, multi-asset, flexible and scalable trading engine has throughput of more than 200,000 messages per second. The trading engine will be ultra low latency, executing trades in 100 microseconds roundtrip (improvement over 25 milliseconds on legacy trading system). Full deployment is planned for Q2 2012. Further in 2012, The Mexican Exchange will introduce several new initiatives including midpoint hidden order book trading, aimed at institutional investors looking to trade large blocks anonymously with reduced execution risk. Simpler cross order rules will also be implemented; all stocks, global market equity securities and debt instruments will be crossed within the best bid/ask spread with no intervention. And, VWAP executions for the day will be able to be entered from 8:00 AM CT to 2:40 PM CT.

Recently, the Mexican Exchange has established major alliances broadening investment opportunities in the Mexican market. The Mexican Derivatives Exchange (MexDer) and the Chicago Mercantile Exchange (CME) established phase one, “south-to-north,” of its strategic order routing agreement, giving Mexican investors access to CME Group’s benchmark derivatives contracts, including interest rates, foreign currencies, equity indexes, energy, metals and agricultural commodities.

Phase two of the partnership, “north-to-south,” now in place provides CME Group customers with access to MexDer benchmark products, including Mexican Stock Exchange Index futures, bond futures and MXN Peso / US dollar futures contracts.

Source: Wallstreet&Technology, Melanie Rodier, 18.11.2011

Filed under: BMV - Mexico, Exchanges, Latin America, Mexico, Agriculture, Algo Trading, BMV Bolsa Mexicana de Valores, Capital Markets, CME, Co-Location, Commodities, Currency, Derivatives, DMA Direct Market Access, Energy, ETF, Exchanges, financial futures, FIX, Fixed Income, Futures and Options, FX Foreign Exchange, Index, Latin America, Low Latency, Market Data, Metal, MexDer, Mexico, Risk Management, Trade Connectivity, Trading System

November 16, 2011 • 1:56 am 0

Finamex launches Algorithms with US Equities in the Mexican market

Finamex, a full-service independent broker dealer from Mexico City, and leading provider of innovative trading solutions, has released four opportunistic market trending algorithms for use by Direct Market Access (DMA) clients. The main idea is to allow clients to effectively gain arbitrage profits while mitigating collocation and/or their own strategy development costs.

Finamex’s latest release of arbitrage algorithms have been designed to build opportunities on fungible domestic equities displayed in the Mexican exchange marketplace. Execution calculations work through pre-programmed algorithms built on leveraging theoretical quote pricing as the primary driver of behavior, speed and momentum.

There are a variety of features to how the Finamex arbitrage algorithms provide opportunities with US equities in the Mexican market:

1. Hunter – is an algo which seeks to take advantage of sudden inefficiencies between the equities of foreign listed symbols in Mexico versus their originating market (such as the QQQ or AAPL on the Nasdaq or NYSE markets). The Hunter algorithm computes required data-sets and adjusts itself independently within defined price spreads on the Mexican Stock Exchange (Bolsa Mexicana de Valores: BMV).

2. Ghost – has a characteristic of lying dormant until a desired buy/sell signal appears with a non-previously indicated ask/bid price then it executes contrarily. Similarly with the Finamex “Hunter” algo, Ghost receives the side, quantity and spread parameters of opposing bids/offers satisfying spread parameters of its local market yet quickly hitting IOC type status. This feature helps in the recognition of desired price opportunities without revealing trade strategy intentions by its clients.

3. Scaled – uses a two-spread metric like the Hunter algo, with a signal that triggers in a suddenly inefficient environment. The Scaled algo strategy is seen on a big spread definition, called a “base.” Scaled reacts instantaneously when a lower spread, called the “target”, is satisfied on the other side. Unlike the Finamex “Ghost” algo, the Scaled algo’s intentions are exposed but move immediately when the target spread is satisfied. The Scaled strategy allows other market participants to preview this algo’s activity, causing them to sometimes take a glance on the board, which in turn drive executions over the spreads.

4. Market-maker – a next generation algo intended to provide liquidity and act as a market maker within the local Mexican marketplace. Market-maker absorbs the last trade, adds an indicated spread and automatically places or replaces the order with an indicated quantity. In combination with pegging and short-sell models, the Marketmaker algo is highly beneficial for market making strategies and for acting on market divergences.

“We’re putting in place all of these free strategies for clients who want to access the Mexican stock market with an almost-zero setup price. Our goal is to take Mexico to a higher level in the emerging markets priority list of global investors,” states Hector Casavantes, head of Electronic Trading at Finamex. “We wanted to offer automated algo strategies in order to let investors know how active and easy this market can be to trade. All algorithms were architected with profitability in mind. They’re highly customizable, completely auditable and comprehensive, fully meeting our clients’ demands”.

“With the addition of these tools, we’ve further enhanced our suite of algorithmic-trading products beyond our well-known execution algos in VWAPs, TWAPs, Implementation Shortfall and POV, “Roberto Larenas, Head of Equity Markets at Finamex added. “While we are aware that these algos are more opportunistic, we are still keeping our business model as pure-agency. Buy-side firms are increasingly requesting new tools, new ideas, and new ways to exploit opportunities in emerging markets. Finamex is fully committed in addressing these demands with our best-of-the breed solutions

Source: A-Team, 14.11.2011

Filed under: BMV - Mexico, FIX Connectivity, Latin America, Mexico, Trading Technology, A-TEAM, Algo Trading, BMV Bolsa Mexicana de Valores, Derivatives, DMA Direct Market Access, Equity, Finamex, FIX, MexDer, Mexico, NASDAQ, NYSE Euronext, Order Routing, Trade Connectivity, Trading System

November 12, 2011 • 3:02 am 0

Mexican Market Leaps Forward – FIX, Technology, Co-Location and Regulation

In the last 12 months dramatic changes have occurred at Mexico’s stock exchange and among its brokerage clients. Cross border partnerships, technology upgrades, new FIX infrastructure and business friendly regulatory changes have opened the Mexican market to high frequency trading (HFT).

While US regulators can be seen to scold HFT firms, the Mexican market has opened its arms. The Mexican Exchange (BMV) and its brokerage firms have upgraded their infrastructure and sought business opportunities north of the border. Earlier this year after the CME Group and the BMV signed their partnership, high frequency traders on the CME Globex trading system began to route orders to the Mexican Derivatives Exchange or MexDer. Today 90 percent of average daily volume on the MexDer comes from high frequency traders north of the border.

Mexico’s brokerage firms have completed significant infrastructure upgrades. Last spring only a few brokers in Mexico could handle a highfrequency hedge fund client and many Mexican brokers could process no more than one connection to the Bolsa Mexicana de Valores (BMV) at a time. The landscape has changed quickly and improvements in broker and exchange systems have ushered in a new capacity for speed in the transmission and execution of orders in Mexico.

Over the summer a major milestone occurred for the industry. Working with the BMV, Mexico’s brokers completed an industry-wide upgrade to FIX 4.4. The top 25 brokers are now certified with FIX 4.4 to the BMV. Leading the way, are brokerages like GBM, Interacciones, Actinver, UBS Mexico, IXE and others.

Now that Mexican brokers speak FIX 4.4, all of the order routing to the BMV can now be done through FIX allowing the BMV to retire the antiquated SETRIB protocol. The only way the BMV will allow Mexican brokers to continue to use SETRIB is by paying excessive fees, and even this will not be allowed by the end of 2011. Retiring SETRIB sets the stage for more positive changes in the industry and at the BMV.

Work is already underway to upgrade the BMV’s trade matching engine. The existing engine was built in the 1990s for a Tandem mainframe. Retiring the Tandem has many benefits. Faster order matching and processing is high on the list. In addition, more choices for application and software vendors and significant cost savings are expected. Retiring the mainframe will also eliminate the scheduling nightmares associated with the limited availability of the central mainframe for testing with the broker community. The new matching engine will be hosted on modern Unix based hardware. The release of the new matching engine and infrastructure is planned for the first quarter of 2012.

Another important milestone is the availability of a state-of-the-art co-location facility at KIO Santa Fe. The BMV infrastructure is located here and starting in October it will be easy for brokers and third party providers to collocate order routing and market data in this hosting facility leading to high throughput low latency services.

While all of the infrastructure and matching engine upgrades are momentous, they would bear no fruit without the simultaneous modernization of Mexican regulations. The initiative to modernize Mexico’s regulations, called RINO, began a year ago and phase two is due to rollout in the fall of 2011. The goal of RINO is to conform Mexican regulations to international standards. By converging with international standards, regulators hope to bring more international order flow and greater liquidity to the market, resulting in increased investment in the Mexican market.

While regulations in the US like Sarbanes Oxley and Dodd-Frank can be seen to drive businesses offshore, the regulatory changes in Mexico are removing handcuffs from businesses and facilitating opportunities. The first step forward occurred early this year with RINO I. RINO I allowed brokers to have multiple channels to the BMV’s electronic trading system. Previously all orders were in a single queue. Multiple access points per broker provides more flexibility in executing strategies and handling client requests, including separate BMV channels for program trading and orders called into the trading desk. RINO I also eliminated sizebased criteria from order management, thus leveling the playing field in the processing of orders. RINO II takes effect on October 10, 2011, bringing more modernizations including pegged orders, improvements in crossing operations, average price operations, price delivery regardless of volume, and decimal bids for fixed income securities.

Crosses, in which a brokerage carries out a transaction through the stock exchange between two of its clients, were permitted previously but the rules were very arcane. Starting in October, the crossing operations will be vastly simplified allowing clients to simply choose whether to cross inside or outside the spread. With this modernization, the BMV hopes to repatriate orders that brokers would previously carry out in the US, where crossing orders was possible using ADRs in dark pools or at the NYSE.

In addition the RINO II regulations a very important new mid-point hidden book order. The orders execute at the midpoint, broker anonymity is guaranteed and the order priority is determined by volume. This is effectively a dark pool. Similar to Xetra, this new BMV order helps the market participants and simultaneously protects the BMV from providers toying with moving into the Mexican marketplace.

As the regulations modernize and the FIX infrastructure hardens, opportunity beckons. Brokers are beginning to push for more high frequency trading algorithms, more efficient routing of international orders, and more sophisticated risk controls, all of which will attract even more international business. As the need for speed grows, co-location previously offered by the exchange may become more strategic, particularly to brokers wanting to attract high frequency traders.

All of this progress was made possible in large part because of the exchange’s demutualization and subsequent listing in 2008. The demutualization coincided with rule changes allowing Mexico’s pension funds or AFORES to invest. Before the rule changes, the AFORES were forced to invest almost entirely in short-term government paper. Today, Mexico’s pension funds are allowed to invest up to 25 percent, in individual stocks and shares and 12 percent in a hybrid of corporate debt and equity capital to allow companies to raise funds to expand businesses.

Considered together, regulatory improvements and infrastructure updates have morphed the BMV and the Mexican brokerage community into a thriving and modern marketplace. The BMV reported a 22 percent jump in earnings last year, with operating income increasing 70 percent in the last three months. A record six initial public offerings made it to market last year and overall trading volumes rose 50 percent in 2010. This year Mexico’s IPC index has tested and hovered near record highs.

In 2011 there are fewer IPOs, but trading volume remains strong. The order-routing agreement signed with Chicago’s CME Group has opened Mexico’s derivatives market to the world. Now, electronic trading infrastructure and investor friendly regulations have set the stage for act two.

Latin America has enjoyed a strong recovery for the most part it has sailed through the recession without lasting damage. Boosted by capital inflows, by record prices for commodity exports, by sound policies and by a heady expansion in domestic credit, the region saw economic growth of 6% last year and is on course to notch close to 5% this year. The region faces slower growth but not disaster. To up the pace, now is the time for reforms to boost productivity.

The main engines for growth in Latin America are China’s demand for minerals, food stuffs and raw materials – this looks set to continue – and consumption as tens of millions edge out of poverty and benefit from newly available credit.

Source: FIX Global Trading, 15.09.2011

Free Subscription of FIX Global Trading Magazin at http://fixglobal.com/subscription

Filed under: BMV - Mexico, FIX Connectivity, Latin America, Market Data, Mexico, News, Risk Management, Trading Technology, AFORES, Algo Trading, BMV Bolsa Mexicana de Valores, China 中国, CME, CNBV Comision National de Bancos y Valores (Mexico), Co-Location, Derivatives, DMA Direct Market Access, ETF, Exchanges, FIX, HFT High Frequency Trader, IPC, IXE, Latin America, Low Latency, Market Analysis, Market Data, MexDer, Mexico, Mexico City, Order Routing, Regulation, Trade Connectivity, Trading System

September 20, 2011 • 11:48 pm 0

ITG Launches Algorithms for Mexican Equities

Investment Technology Group, Inc. (NYSE: ITG), a leading agency research broker and financial technology firm, today announced the launch of algorithms for Mexican equities, including the proprietary Active algorithm, which has been customized for the structure and spread profile of the Mexican market. The algorithms are available via ITG’s award-winning Execution Management System, Triton®, as well as other widely used trading platforms and via FIX connection.

“Regulatory and technological changes are accelerating the move towards electronic trading in Mexico, and our tailored algorithms provide a valuable new tool for institutional asset managers seeking to access that market,” said Jeff Bacidore, Managing Director and Head of Algorithms at ITG. “These algorithms are designed to reduce market impact, maximize execution quality and improve trading performance in the Mexican equity market.”

The Mexican algorithms complement ITG’s growing Latin American trading capabilities. ITG offers a full suite of algorithms for Brazilian equities, including Active, Flexible Participation, Volume Participation and the recently added Peg & Pounce algorithm. Peg & Pounce empowers traders to take liquidity opportunistically when the size is available and supply liquidity passively when liquidity is not available.

Source: Bobsguide, 20.09.2011

Filed under: BMV - Mexico, FIX Connectivity, Latin America, Mexico, News, Trading Technology, Algo Trading, BMV Bolsa Mexicana de Valores, Brazil, Capital Markets, DMA Direct Market Access, FIX, MexDer, Mexico, Trade Connectivity, Trading System

August 3, 2011 • 8:46 am 0

CME and MexDer implement north-to-south order routing

CME Group, the world’s leading and most diverse derivatives marketplace, and the Mexican Derivatives Exchange (MexDer), the derivatives subsidiary of the BMV Group and second largest exchange in Latin America, today announced the successful launch of their north-to-south order routing agreement, giving customers in the U.S. access to MexDer’s benchmark derivatives contracts, including Mexican Stock Exchange Index Futures, Bond Futures and MXN Peso / US Dollar Futures Contracts.

The first phase of CME Group’s strategic partnership with MexDer went live April 4, 2011 and gave Mexican investors access to CME Group’s benchmark derivatives contracts including interest rates, foreign currencies, equity indexes, energy, metals and agricultural commodities.

“Mexico is the 13th largest economy in the world and we continue to look for opportunities to provide our customers around the world with the broadest and most diverse range of globally-relevant products to help them manage their risk,” said Phupinder Gill, CME Group President. “This next phase of the partnership demonstrates how we continue to build on our successful track record of growing our business internationally through strategic partnerships.”

“With the successful launch of South-to-North order routing in April, the second phase of the direct order routing connection now makes it possible for both of our customers to leverage access to both MexDer and CME Group, and take advantage of a modern market with a friendly regulatory framework in Mexico and a growing sophisticated local investor base,” said Luis Tellez, Chairman and CEO of BMV Group. “Our goal moving forward is to focus on increasing our volumes together and working more closely with each other to learn how we can meet the needs of our customers.”

In March 2010, the parent company of MexDer, BMV Group, and CME Group entered into a strategic partnership that includes order routing for derivatives products as well as an agreement to pursue potential joint initiatives including product development, marketing and customer education as well as clearing opportunities. CME Group is the exclusive exchange provider of derivatives order routing services to MexDer outside Latin America, and MexDer is the exclusive exchange provider of derivatives order routing services to CME Group in Mexico.

Source: BMV 01.08.2011

Filed under: BMV - Mexico, Exchanges, FIX Connectivity, Latin America, Mexico, News, Risk Management, Trading Technology, Algo Trading, BMV Bolsa Mexicana de Valores, CME, Commodities, Currency, Derivatives, DMA Direct Market Access, Exchanges, FIX, Latin America, MexDer, Mexico, Order Routing, Regulators, Risk Management, Trade Connectivity, Trading Network

July 13, 2011 • 3:58 am 0

FT Special Report: Investing in Mexico

Read the FT Special Report at Investing in Mexico FT Special Report June 2011

Boom times despite safety fears

There has been a rise in violent crime in some areas, but the country is still a good place for business, says John Paul Rathbone

Personal view: Country’s problems are not intractable

Better government and smarter leadership, combined with strategic vision, could change Mexico very swiftly, writes Luis Rubio

Regulation: Media wars give hope of more choice

Competition, once an infrequent and timid visitor, is making a loud return, says Adam Thomson

Politics: Reform on hold as all eyes turn to elections

The PRI is tipped to regain the presidency but it is not all plain sailing, writes Adam Thomson

Industry: Aerospace sector helps high-tech economy fly

Advanced manufacturing skills are boosting exports, writes Adam Thomson

US relationship: Bumps on road to better links

Differences persist on guns, drugs and illegal migrants, says Anna Fifield

Still everything to play for in face-off with BrazilJohn Authers considers the nation’s rivalry with Brazil and asks whether there is all still to play

Stock market: Changes give vigour to once-somnolent bourse

Technical and other alterations facilitate business, reports Adam Thomson

Tourism: Aggressive push to promote country’s multifaceted allure

The nation’s tourism industry is working hard to persuade visitors there is more to discover, writes Adam Thomson

Mexico City: Conditions improve for business

A string of liberal social reforms during the past few years has led some observers to rename Mexico’s capital ‘Marcelona’, writes Adam Thomson

FT Special Report, 13.07.2011

Filed under: BMV - Mexico, Brazil, Library, Mexico, News, Risk Management, BMV Bolsa Mexicana de Valores, Commodities, Derivatives, DMA Direct Market Access, Exchanges, FTSE Group, Latin America, Manufacture, Market Analysis, MexDer, Mexico, Mexico City, PAN Partido Acción Nacional, Performance Report, Politics, PRD Partido de la Revolución Democrática, PRI Partido Revolucionario Institucional, Real Estate, Regulation, Risk Management, Security, Tourism

April 9, 2011 • 12:55 am 0

Fidessa Launches Sell-Side Trading Solution for Mexico

April 7, 2011, TheTrade Fidessa launched a new platform for brokers tailored specifically for trading in Mexico, following the introduction of new market regulations in September 2010.

Fidessa clients will have functionality for trading across asset classes that is compliant with new routing and order prioritization rules introduced by domestic exchange Bolsa Mexicana de Valores (BMV) in conjunction with trade body the Mexican Securities Industry Association and Mexican regulator, the Comisión Nacional Bancaria y de Valores. Specific to Mexico, the platform allows brokers to establish multiple channels to the exchange using separate FIX connections and supports all the new order types made available by the changes to regulation.

According to the BMV, “Average daily orders in the Mexican cash market have increased threefold over the past year, and as global investors look to Mexican markets for new opportunities, we remain focused on improving functionality and trading rules. By working with a company such as Fidessa, which has developed solutions to address regulatory changes like MiFID in Europe and RegNMS in the US, we are taking another big step towards increasing foreign interest and investment in Mexico.”

Source, Fidessa 07.04.2011

Filed under: BMV - Mexico, Exchanges, FIX Connectivity, Latin America, Mexico, Trading Technology, Algo Trading, BMV Bolsa Mexicana de Valores, CNBV Comision National de Bancos y Valores (Mexico), DMA Direct Market Access, Exchanges, Fidessa, FIX, Latin America, MexDer, Mexico, Trade Connectivity, Trading Hubs, Trading Network

March 22, 2011 • 1:02 am 0

Mexico exchange lists first REIT after delays

Local pension funds took big stakes

MEXICO CITY, March 21 (Reuters) – Mexico‘s stock exchange listed the country’s first real estate investment trust last week, allowing investors to make big bets on the local property market.

The sale of shares in the first real estate investment trust (REIT) in Mexico came after years of frustration that saw the current deal stumble last month before finally reaching investors.

If Mexico’s REITs prove to be successful, the securities could give local property markets a big capital injection.

Fibra UNO (FUNO11.MX), the maiden REIT named for its acronym in Spanish, was rebuffed in February by investors unwilling to pay the asking price, but the deal was retooled and listed on the local exchange on Thursday.

“Mexico is taking on a new life, becoming more dynamic,” Luis Tellez, head of the Mexican Stock Exchange (BOLSAA.MX), told Reuters shortly after the security was listed.

Mexico financial markets are not as vibrant as those in Brazil where REITs have deep roots but Tellez said this week’s REIT listing was a sign of things to come.

“We are not at the level of Brazil but we are much more dynamic than we were,” he said.

The REIT sold roughly $300 million worth of shares with about a third bought by foreigners and the rest by domestic investors. The February book was roughly split between foreign and domestic investors.

Investors took hold of 43.7 percent of the trust – or 185,385,543 shares valued at 19.5 Mexican pesos each. The fund will hold a basket of 16 properties located in several states across the country.

REITs are seen as an efficient way to inject capital into property markets because they spread the risk and costs of long-term building projects across many tradeable shares.

Mexico’s 15 private pensions and their $115 billion in assets are likely to continue to be a source of funding for REIT investments. For an analysis on the Mexico pension funds and REIT

REIT AND RE-REIT

The local advisors behind the deal, Protego Asesores, went back to the drawing board after the first offer was rejected and eventually enticed investors with a 10 percent discount.

The property owners also agreed to swap some of their properties for equity in the REIT rather than get paid in cash, as another way to smooth the deal, Protego Asesores said.

Turmoil in North Africa and the earthquake in Japan made this a difficult time for the deal but the advisors wanted to conclude it quickly to put an end to 18-months of work.

“We’ve always said that the real estate market in Mexico cannot grow as it should without investment from the private market,” said Augusto Arellano, director of Protego Asesores.

“You cannot have healthy real estate growth if you simply rely on private funding, and we knew that was on our side.”

Source: Reuters 21.03.2011 by Patrick Rucker, additional reporting by Michael O’Boyle, Elinor Comlay

Filed under: BMV - Mexico, Exchanges, Latin America, Mexico, News, BMV Bolsa Mexicana de Valores, Capital Markets, Exchanges, Listing, Mexico, Real Estate, REIT

December 26, 2010 • 11:43 pm 0

BlackRock lista 7 nuevos ETF de indices de Asia, Polonia, Brazil y renta fija International en Mexico

Ciudad de México, 26 de diciembre de 2010 – El pasado jueves 23 de diciembre, empezaron a negociarse en el Sistema Internacional de Cotizaciones (SIC) de la Bolsa Mexicana de Valores (BMV) 7 nuevos ETFs iShares internacionales, patrocinados por Deutsche Securities, S.A. de C.V., Casa de Bolsa y administrados por BlackRock, en lo que constituye el cuarto paquete de ETFs iShares listados en el SIC el presente año.

Los 7 ETFs iShares que integran este paquete brindan exposición a índices de renta variable internacional de mercados emergentes y de Asia no emergente, así como de renta fija internacional.

Los ETFs iShares listados en el SIC son:

Nombre	Clave de pizarra	% Gastos	Aprobado por CONSAR
Instrumentos de renta variable
iShares MSCI China Small Cap Index Fund	ECNS	0.65	No
iShares MSCI Indonesia Investable Market Index Fund	EIDO	0.65	No
iShares MSCI New Zealand Investable Market Index Fund	ENZL	0.55	No
iShares MSCI Poland Investable Market Index Fund	EPOL	0.65	No
iShares MSCI Brazil Small Cap Index Fund	EWZS	0.65	No
Instrumentos de renta fija
iShares FTSE Gilts UK 0-5	IGLS	0.20	No
iShares DEX Short Term Bond Index Fund	XSB	0.25	No

Estos 7 ETFs iShares permiten tener acceso a un perfil de inversión representado por el dinámico sector de empresas de baja capitalización de economías que han tenido desempeños recientes interesantes, como la china, indonesia, neozelandesa, polaca o brasileña.

Por ejemplo, el iShares MSCI China Small Cap Index Fund mantiene una posición diversificada en empresas chinas de baja capitalización del sector automotriz, minero, tecnológico, de bienes raíces, energético, cementero y de materias primas, entre muchos otros.

Las carteras, desempeños recientes, retornos históricos, prospectos y otros datos de interés de estos nuevos ETFs pueden ser consultados en www.iShares.com.mx.

“Con este cuarto paquete de ETFs iShares listados en el SIC este año, culmina un 2010 de intensa actividad para BlackRock en México, pues arrancamos con 126 ETFs, y estamos cerrando con un total de 168: 146 ETFs listados en el Sistema Internacional de Cotizaciones y 12 ETFs listados en el mercado local de la Bolsa Mexicana de Valores (BMV). Asimismo, pasamos de 10 mil millones a 14 mil millones de dólares en activos bajo administración para clientes en México a través de los ETFs iShares, en cuentas segregadas y clientes institucionales. Ambos indicadores ratifican nuestra posición de liderazgo en esta industria”, indicó Isaac Volin, Director Ejecutivo de BlackRock México.

A escala internacional, BlackRock también mantuvo su liderazgo este año con un total de activos gestionados globalmente por 3.45 billones de dólares (trillion dollars), al 30 de septiembre de 2010.

Con los ETFs iShares de BlackRock, los inversionistas mexicanos tuvieron por primera vez en 2004 acceso desde México a una amplia gama de vehículos de inversión con exposición a diferentes clases de activos internacionales, que les han permitido conformar portafolios mejor diversificados para optimizar rendimientos ajustados por riesgo.

BlackRock está firmemente comprometido a poner al alcance de los inversionistas mexicanos la familia más completa y diversificada de vehículos de inversión para tener acceso a todas las clases de activos disponibles a escala global. A su vez, ofrece acceso a inversionistas internacionales a instrumentos de activos mexicanos que contribuyen al financiamiento y desarrollo de México.

Source: BlackRock 26.12.2010

Filed under: BMV - Mexico, Brazil, China, Indonesia, Mexico, News, BlackRock, BMV Bolsa Mexicana de Valores, Brazil, China 中国, ETF, Exchanges, Index, Indonesia, MSCI, New Zealand, Poland

November 29, 2010 • 7:28 pm 2

Inmobiliaria Carso, de Carlos Slim, adquiere acciones ordinarias de BlackRock

Ciudad de México, 29 de noviembre de 2010 – Inmobiliaria Carso del señor Carlos Slim Helú, y BlackRock, Inc. (NYSE: BLK) confirmaron que la primera ha adquirido una posición en acciones ordinarias de la compañía durante la reciente oferta secundaria de acciones.

Como se anunció previamente, BlackRock, Inc. completó el 15 de noviembre de 2010 una oferta secundaria por 58’737,122 acciones de su capital ordinario a un precio de 163.00 dólares por acción.

“Estamos orgullosos de la afiliación del señor Slim como accionista de BlackRock y hemos acordado impulsar nuestra relación en beneficio mutuo”, comentó Laurence D. Fink, Chairman y CEO de BlackRock. “Las perspectivas de negocio del señor Slim, y su conocimiento de los mercados latinoamericanos tendrán un valor importante para continuar el desarrollo de BlackRock en esta región.”

BlackRock está comprometido con el desarrollo e innovación del sector financiero mexicano, en donde ha estado presente en el mercado de capitales desde 2004 a través de los ETFs iShares. Los ETFs, o Exchange Traded Funds por sus siglas en inglés, son también conocidos en México como “Trackers” o TRACs (Títulos Referenciados a Activos). Los ETFs son canastas de clases de activos estandarizadas que siguen a un índice. El compromiso de BlackRock en México se traduce en el desarrollo de 12 ETFs locales de renta variable y de deuda mexicana listados en la Bolsa Mexicana de Valores y en 150 ETFs listados en el Sistema Internacional de Cotizaciones de la BMV. BlackRock también cuenta con un fuerte equipo local de profesionales abocados a impulsar la cultura financiera en el país.

El Sr. Carlos Slim afirmó: “El equipo de gestión global de BlackRock y el posicionamiento estratégico de su modelo de negocio lo hacen una inversión atractiva. Espero una comunicación frecuente con BlackRock a medida que trabajemos juntos y podamos explorar nuevas oportunidades.”

Al 30 de septiembre de 2010, BlackRock administraba aproximadamente 15 mil millones de dólares en activos para clientes en México a través de los ETFs iShares, cuentas segregadas e institucionales. El total de activos gestionados globalmente por BlackRock asciende a 3.45 trillones (millones de millones) de dólares.

BlackRock está firmemente comprometido a poner al alcance de los inversionistas mexicanos la familia más completa y diversificada de vehículos de inversión para tener acceso a todas las clases de activos disponibles a escala global. Y a su vez, ofrece acceso a inversionistas internacionales a instrumentos de activos mexicanos que contribuyen al financiamiento y desarrollo de México.

Source:BlackRock/Carral Sierra, 29.11.2010

Filed under: BMV - Mexico, Latin America, Mexico, News, Services, Wealth Management, BlackRock, BMV Bolsa Mexicana de Valores, Carlos Slim Helu, ETF, Investment, iShares, Latin America, Mexico, Real Estate

November 9, 2010 • 3:25 am 0

Mexico: Economy Continues Slowly to Our Targets – November 2010- IXE BANIF – Monthly Analysis

Mexican growth motors continue to balance out

Since last month, we have experienced a re-balancing of growth drivers, with improvement of local demand and a slow-down in exports, the main growth motor. Exports have reduced their YoY growth rate from the nearly 50% of the beginning of the year, although it remained at a high 21% in September. We expect this deceleration to continue until 2011.

Mexico – Monthly Allocation – November 2010

During October, we renewed our good expectations for growth of the Mexican economy with the release of statistics for September: a) Internal retail sales increased 4% YoY; b) consumer confidence grew 12% YoY; c) 780k new jobs created in the first nine months. Concerning job creation, this level was a record high for the same period and mainly due to the export industry. We maintain our expectation for the creation of 650k new jobs in 2010 (seasonally, there is job reduction at year-end) and 530k in 2011.

Despite these changes in export and local demand, we maintain our expectation of a 4.4% GDP growth for 2010 (while market consensus remain at 5%) and 3.7% for 2011. For our 2011 forecast, local demand still has to catch up, as we predict a further decline in exports.

For our November portfolio, we have added Femsa and increased the weight of Grupo Mexico from 15 to 20%. We have reduced the weight of Mexchem from 15 to 10% and withdrawn Soriana.

Mexican tidbits

Inflation remains under control, although the first data collected for October, indicating a 0.5% increase, was slightly above our and market expectations. We continue expecting 4.5% for 2010, with the belief that interest rates increase no earlier than October 2011, although the growth of inflation in the recent past may allow postponement to the beginning of 2012.

The Mexican Peso reduced its volatility in October, appreciating from the 12.6 P$/US$ at the beginning of the month. Our forecast is currently at 12.4 for the end of 2010 and 12.2 for the end of 2011.

Source: Banif – IXE, 05.11.2010

Filed under: BMV - Mexico, Latin America, Mexico, News, Services, Banif, BMV Bolsa Mexicana de Valores, IXE, Latin America, Market Analysis, MexDer, Mexican Pesos, Mexico, Performance Report

FiNETIK – Asia and Latin America – Market News Network