BMV Bolsa Mexicana de Valores « 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

February 2, 2012 • 6:06 am 0

UBS goes algo in Mexico

UBS today announced the launch of algorithmic trading for international clients trading equities on Bolsa Mexicana de Valores in Mexico.

The addition of algorithmic trading strategies enhances clients’ ability to access this major Latin American market center, and complements UBS’s existing Direct Market Access (DMA) offering in the country.

UBS is launching this offering in Mexico with a full suite of liquidity seeking, volume and price-sensitive strategies, including the award-winning UBS Tap. UBS clients can use these algorithmic trading strategies to efficiently interact with liquidity on Bolsa Mexicana, sending electronic orders directly to the exchange without passing through an intermediary.

In November 2010, UBS was the first international broker to launch DMA in Mexico, allowing clients to trade electronically directly on the exchange. UBS clients can now send both front-to-back DMA and algorithmic trading orders using most major execution management systems or order management systems, as well as the firm’s own UBS Pinpoint.

“Our experience offering DMA in this market has enabled us to tailor our trading strategies specifically to the market structure of Bolsa Mexicana, which means our international clients should have a seamless experience as they trade into Mexico” said Owain Self, Global Head of Algorithmic Trading at UBS.

“Offering an entire suite of algorithmic trading strategies for Mexico is another example of our commitment to a uniquely optimized Latin American offering,” said Damian Fraser, Head of Equities for Latin America. “Our clients have expressed great enthusiasm for even more sophisticated tools to access this growing, dynamic marketplace, and we are delighted to be able to meet those needs.”

UBS also provides DMA and algorithmic trading for international clients trading into Brazil, across the global emerging markets of Europe, Middle East, Africa and Asia, and over 90 markets and trading venues worldwide.

UBS Direct Execution is the firm’s global institutional electronic trading business. Direct Execution offers ultra-low latency Direct Market Access (DMA), a suite of award-winning advanced Algorithmic Trading strategies, a state-of-the-art analytics platform – offering Real-Time TCA – called UBS Fusion, and a multi-asset international execution management system called UBS Pinpoint.

Source:FINEXTRA, 01.02.2012

Filed under: Brazil, Latin America, Mexico, Trading Technology, BMV Bolsa Mexicana de Valores, Capital Markets, DMA Direct Market Access, Exchanges, Latin America, Trading Network, UBS

January 6, 2012 • 2:51 am 0

Alternative Latin Investor: Latam Family Office January 2012 Issue Nr 13

The Alternative Latin Investor Issue #13 is focusing on family offices. With some great content this issue, from maverick economist Doug Casey, estimates on the effect of climate change in the region, and of course with premium focus looking at the needs, attitudes and opinions of family offices in LatAm. Below some of the other content of issue #13.

Renewable Energy

Electric Energy Storage in Latin America: Smart Grid Technologies.

Funds

Top Ten LatAm Hedge Funds
Mutual Funds in Argentina
Latin America fund assets to exceed $3 trillion by 2020

Emerging Markets

2012 Should Be Better: A wasted year for LatAm Stock Markets
Investors Beware of Brazilian FIDCs (ABS) Backed by Consumer Credit

Agribusiness

Gauging the Effects of Climate Change on Brazilian Agri Output
2011 Agribusiness Round Up

Forex

SPOT-trade’s Facundo Molina on Forex and CDFs
Mitigating Currency Risk when investing in LatAm

Private Equity

A Primer on Colombian Taxes for the PE Investor

Art

Meso-American Remix
LatAm auction recap: Sotheby’s and Christie’s

Issue Focus: LatAm Family Business

Please view and access Issue 13 in the following formats

Virtual Viewer
http://www.alternativelatininvestor.com/issue13.html
PDF
http://www.alternativelatininvestor.com/issue13.pdf

For more details and information please view http://www.alternativelatininvestor.com

Source: AlternativeLatinInvestor 23.12.2012

Filed under: Argentina, Brazil, Central America, Chile, Colombia, Energy & Environment, Events, Latin America, Mexico, News, Peru, Services, Wealth Management, Agriculture, Alternative Energy Markets, Alternative Latin Investor, Argentina, Art Investment, BM&FBOVESPA, BMV Bolsa Mexicana de Valores, Brazil, Chile, Colombia, Emerging Markets, Energy, Family Office, FOREX, Fund Distribution, Fund Industry, Hedge Fund, Latin America, Mexico, MILA Mercado Integrado LatinoAmericano, Panama, Peru, Private Banking, Regulation, Risk Management, Wealth Management

December 14, 2011 • 7:32 am 0

SunGard Opens Trading Network Hub in Chile

SunGard has established a SunGard Global Network (SGN) hub in Santiago, Chile. SGN provides global order routing, market data and associated services on 120 markets worldwide, linking 2000 asset managers and 500 broker dealers. The Santiago hub, SunGard’s third in Latin America after Mexico City and Sao Paulo, will provide international investors with access to Bolsa de Comercio de Santiago (BCS), Chile’s equity and derivatives exchange. In addition, financial institutions in Chile will be able to access the SGN brokerage community.

SunGard will also offer Valdi Market Access to Chile, which delivers Software-as-a-Service* (SaaS) based connectivity to markets worldwide through SGN. This direct market access service gives exchange members and their clients the ability to trade on electronic markets from any application connected to SGN. It is fully managed by SunGard, helping reduce their infrastructure and support costs. For Bolsa de Comercio de Santiago (BCS), the Valdi Market Access servers will be directly co-located at the exchange, offering low latency services.

Mr. Andres Araya Falcone, chief information officer of the Bolsa de Comercio de Santiago, said, “Chile continues to grow, and the region is focused on being an important player in the global economy. SunGard is supporting this growth by providing electronic trading solutions and global connectivity to market participants in Chile, which will help our exchange members find new investment opportunities. In facilitating exchange connectivity, this should also help attract new firms to the Bolsa de Comercio de Santiago.”

Danielle Tierney, an analyst at Aite Group, said “Opening a new hub in Santiago is a very strategic placement for SunGard. Santiago is the third largest individual exchange in Latin America by market capital and volume, in addition to being a part of the MILA integration of the Andean exchanges. By establishing this additional point of connectivity, SunGard has essentially made its SGN hub into a pan-LatAm offering.”

Philippe Carré, global head of connectivity of SunGard’s global trading business, said, “SunGard’s Valdi and SGN address the connectivity and execution challenges of trading multiple asset classes on multiple markets. SunGard already offers Valdi and SGN solutions in Argentina, Brazil, Chile, Colombia, Mexico and Peru, helping traders in Latin America access new markets and diverse liquidity, as well as helping international traders access Latin America markets.”

Source: A-TEAM Electronic Trading, 13.12.2011

Filed under: Argentina, Brazil, Chile, Colombia, Latin America, Mexico, News, Peru, Trading Technology, BCS Bolsa de Comercio de Santiago, BEC Bolsa Electronica de Chile, BM&FBOVESPA, BMV Bolsa Mexicana de Valores, Brazil, Chile, Derivatives, Derivativos, Exchanges, Latin America, MexDer, Mexico, Order Routing, Trade Connectivity, Trading Hubs, Trading Network

December 7, 2011 • 2:49 am 0

Alternative Latin Investor: Latam Fund & Investment Trends- December 2011 Issue Nr 12

Latin America fund assets to exceed $3 trillion by 2020
-Driven by appetite for Asia – U.S. and European asset managers benefit most

While still smaller than other global regions in terms of aggregate assets – around US$1.4 trillion in mutual fund assets and about $710 billion in pension assets – fast growth in Latin America as a region is capturing the imagination of investors, distributors and asset managers alike, with tactical and strategic opportunities prompting resource allocations and investments.

Subscribe to the free issue of at http://www.alternativelatininvestor.com/index.html.

Source: Alternative Latin Investor, 06.12.2011

Filed under: Argentina, Brazil, Chile, Colombia, Latin America, Mexico, News, Peru, Agriculture, Alternative Latin Investor, Argentina, Art Investment, BM&FBOVESPA, BMV Bolsa Mexicana de Valores, Brazil, Capital Markets, Chile, Colombia, Commodities, Currency, Exchanges, FOREX, Fund Industry, FX Foreign Exchange, Hedge Fund, Investment, Latin America, MexDer, Mexico, Performance Report, Peru, Regulation, Risk Management, Wine Investment

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

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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

November 10, 2011 • 1:29 pm 0

Latin America Fund and Investment News Aug-Oct 2011 – Alternative Latin Investor

American Business Practices in Brazil: A Contrarian’s View

Premium Article OCT, 2011 U.S. companies have been investing heavily in Brazilian private equity in recent years, capitalizing on the across-the-board growth in the country’s small, mid and large cap companies. But according to Malcolm McLelland, an American-born, Brazil-based consultant and…Read Full Article

Latin American Hedge Funds

Premium Article OCT, 2011 Hedge funds have become one of the most vital asset classes in LatAm in recent years, and LatAm hedge funds some of the most successful in the global industry, as local investors aim to diversify their strategies and exposure in the region while foreign investors vie for b…Read Full Article

Brazil

Premium Article OCT, 2011 Given its robust growth in recent years and massive wealth compared to its neighbors, Brazil has attracted the lion’s share of global investment in LatAm, with foreign investors allocating especially aggressively to equity and government bonds. Brazilian investors, …Read Full Article

MILA Integrated Latin American Market

OCT, 2011 On May 30 of this year, the Integrated Latin American Market (Mercado Integrado Latinoamericano, or MILA) was launched, combining the stock markets of Colombia, Chile and Peru into a single cross-trading platform. A key component of a regional trend toward integration, MILA has been wide…Read Full Article

Brazilian Pension Funds

Premium Article OCT, 2011 Alternative asset managers around the globe are vying for the attention of Brazil’s swelling pension funds. As of early 2011, these funds had a total of $342 billion under management and had grown an average of 14% per year for the last five years, one of the highest…Read Full Article

Meta-Trends in LatAm Investment

Premium Article OCT, 2011 The progress of alternative asset investment in LatAm is following two basic meta-trends, that is, large-scale and long-term patterns that transcend specific products, firms or opportunities. These meta-trends are, first, the increasing interpenetration of managers from th…Read Full Article

High Net Worth Individuals in LatAm

Premium Article AUGUST, 2011 The wealth and quantity of high net worth individuals (HNWI) in LatAm has grown in recent years. According to the Capgemini/Merrill Lynch World Wealth Report 2011, the number of LatAm HNWI grew by 6.2% in 2010, and its total HNWI wealth by 9.2%. There are about a half…Read Full Article

Quant Funds

Premium Article AUGUST, 2011 After taking a battering during the 2008 credit crunch and struggling in the early stages of recovery, quantitative (or ‘quant’) funds are trying to reassert themselves in the industry. And a small, but growing, number are looking to start afresh in the …Read Full Article

LatAm Funds

Premium Article AUGUST, 2011 U.S. Institutional investors looking to increase their exposure to emerging markets have been turning increasingly to a handful of LATAM countries, where they see a swelling pool of experienced fund managers working within a context of political stability and economic g…Read Full Article

Institutional Investing in LatAm

Premium Article AUGUST, 2011 For most institutional investors, there is an uncertainty about LatAm´s quality and future – and a certainty about its checkered past – that gives them pause as they investigate young managers in the region. Most of these investors want to see a stron…Read Full Article

Source:Alternative Latin Investor, October 2011

Filed under: Brazil, Chile, Colombia, Exchanges, Latin America, Library, Mexico, News, Peru, Risk Management, Services, Wealth Management, Alternative Latin Investor, BM&FBOVESPA, BMV Bolsa Mexicana de Valores, Brazil, Capital Markets, Forecast 2011, Fund Industry, Hedge Fund, HNWI High Net Worth Individuals, Inversiones, Investment, Investment Bank, Latin America, Mexico, MILA Mercado Integrado LatinoAmericano, Risk Management, Wealth Management

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

September 14, 2011 • 12:06 am 2

10 Trading Trends in Latin America : SunGard

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

Filed under: Argentina, Brazil, Chile, Colombia, Data Vendor, Exchanges, FIX Connectivity, Latin America, Market Data, Mexico, Peru, Trading Technology, BM&FBOVESPA, BMV Bolsa Mexicana de Valores, Capital Markets, Chile, Colombia, Data Vendors, Derivatives, DMA Direct Market Access, FIX, Latin America, Low Latency, Market Data, Merger, MexDer, Mexico, MILA Mercado Integrado LatinoAmericano, Peru, SunGard, Trade Connectivity, Trading Hubs, Trading System

August 11, 2011 • 11:17 pm 0

Mexico Credit: Beating Brazil Bonds after 2008 crisis

Mexican government and corporate bonds are outperforming securities sold by their Brazilian counterparts as investors bet Latin America’s second-largest economy is better prepared to weather a global slowdown.

The 27-basis point drop in Mexican government dollar bond yields in the past month compares with a decline of 25 for Brazilian notes, snapping five straight months of underperformance, according to JPMorgan Chase & Co. The two- basis point increase in Mexican corporate borrowing costs in the past month compares with a jump of six basis points, or 0.06 percentage point, for their Brazilian peers. Previously, Brazilian corporate securities had outperformed for two consecutive months.

President Felipe Calderon’s administration has lined up a $72 billion credit line from the International Monetary Fund, extended debt maturities and shunned capital increases embraced by Brazil, the region’s largest economy, to protect against a slowdown in the U.S., which buys 80 percent of the Latin American nation’s exports.

“They are strengthening public finances here in Mexico,” Gabriel Casillas, chief Mexico economist for JPMorgan Chase & Co. in Mexico City, said in a telephone interview. “The Mexican market has become much easier and flexible to trade as Brazil boosts capital controls.”

100-Year Bond

Mexican government bonds yield 4.65 percent, or 6 basis points less than Brazilian debt, according to JPMorgan. The gap has swelled from one basis point on July 28. Notes sold by Mexican companies yield 6.31 percent, compared with 5.93 percent for Brazilian corporate securities. The 37-basis point gap is down from 53 on July 28.

Mexico sold $1 billion of 100-year bonds overseas yesterday, taking advantage of a plunge in benchmark U.S. borrowing costs to bring back a record-long maturity it unveiled a year ago. The government issued the notes due in 2110 to yield 5.96 percent, or 242 basis points above 30-year U.S. Treasuries, according to data compiled by Bloomberg.

“Mexico financially has never been as well protected and sound as it is today,” said Alejandro Diaz de Leon, head of the finance ministry’s public debt unit in an interview yesterday. “Mexico has been able to take advantage of a privileged position because of the steps it has taken.”

Standard & Poor’s cut Mexico’s rating to BBB, the second- lowest investment grade, from BBB+ in December 2009, citing declining oil output and “diminishing” prospects for widening the tax base to replace oil revenue. Brazil is rated one level lower at BBB- by S&P.

The Brazilian finance ministry declined to comment in an e- mailed statement.

IMF Credit Line

The IMF renewed and boosted the size of Mexico’s credit line in January from $48 billion. The Washington-based fund originally approved the facility in 2009 to boost confidence in the economy. The central bank has been buying as much as $600 million monthly though options since March 2010 to bolster foreign reserves, which surged 84 percent in the past two years to a record $133.9 billion, according to the central bank. Brazil’s reserves rose 65 percent over the same period to $349.6 billion.

“All these contingency plans and credit lines are favorable factors for an investor, who may say that in the case of another crisis Mexico won’t likely be as volatile,” Eduardo Avila, an economist with Monex Casa de Bolsa SA in Mexico City, said in a telephone interview.

Currency Tumble

The peso tumbled 20 percent in 2008 as U.S. demand for the country’s exports slumped. Mexico’s gross domestic product shrank 6.1 percent the following year, the most since 1995 and the second-worst contraction of the economies tracked by Bloomberg after Russia. The U.S. economy contracted 3.5 percent in 2009.

Yields on Mexican government debt in the two months after Lehman Brothers Holding Inc. filed for bankruptcy in 2008 surged 165 basis points, compared with an increase of 142 for Brazilian securities.

“We are a lot better prepared, especially relative to other countries, for a situation that could deteriorate externally,” Deputy Finance Minister Gerardo Rodriguez said in an interview at Bloomberg’s headquarters in New York on June 2. “All this points to a broad framework of creating additional spaces for a potential adverse scenario going forward. That’s what we are here for — to prepare for negative scenarios.”

Mexico’s total net debt is 35 percent of GDP, below the 40 percent for Brazil. The government has been extending local debt maturities to a record 7.3 years in 2011, from 6.4 years in 2009.

Capital Controls

Brazil imposed a 1 percent tax on some currency derivatives on July 27, the latest government measure aimed at stemming the 42 percent appreciation of the real since the end of 2008. Since October, Brazil has also tripled to 6 percent a tax on foreigners’ purchase of bonds, raised the cost of foreign borrowing by local companies and restricted bank bets against the real. The peso has gained 9.1 percent during the same period.

The extra yield investors demand to hold Mexican government dollar bonds instead of U.S. Treasuries narrowed three basis points to 184 at 7:47 a.m. New York time, according to JPMorgan Chase & Co.

The peso weakened 0.3 percent to 12.5958 per U.S. dollar.

The cost to protect Mexican debt against non-payment for five years rose five basis points yesterday to 161, according to data provider CMA, which is owned by CME Group Inc. and compiles prices quoted by dealers in the privately negotiated market. Credit-default swaps pay the buyer face value in exchange for the underlying securities or the cash equivalent if a government or company fails to adhere to its debt agreements.

Growth Forecasts

Mexico’s central bank lowered its forecast for economic growth this year and next while keeping its consumer price forecasts unchanged, according to its quarterly inflation report published yesterday. It cut its 2011 growth forecast to a range of 3.8 percent to 4.8 percent and its 2012 forecast to 3.5 percent to 4.5 percent. The bank said in its May report the economy may expand as much as 5 percent this year and up to 4.8 percent in 2012 growth. It kept its 2011 and 2012 consumer price forecasts at 3 percent to 4 percent.

“The balance of risks for growth in the Mexican economy has deteriorated,” the bank said in the report, citing lower global growth prospects.

JPMorgan’s Casillas and Iker Cabiedes reduced their 2011 Mexican growth forecast yesterday to 4.2 percent from 4.5 percent.

‘Aversion to Risk’

Economists in Mexico will likely continue to cut growth forecasts this quarter after the Federal Reserve indicated that it will keep rates low through mid-2013, said Javier Belaunzaran, who helps manage about 40 billion pesos at Interacciones Casa de Bolsa SA in Mexico City.

“If the Fed is saying it’s keeping rates steady through 2013, than things aren’t going well at all,” Belaunzaran said in a telephone interview. “There may be an aversion to risk toward long-term securities if the outlook worsens.”

Mexico will wait until November 2012 to raise the benchmark lending rate from a record low 4.5 percent, according to trading in TIIE futures.

While Mexico’s annual inflation rate slowed to a five-year low in March and is within the central bank’s target range of 3 percent to 4 percent this year, Brazil has struggled to contain price increases. Inflation quickened to 6.75 percent last month, the highest in six years and almost double the 3.55 percent rate in Mexico in July.

“There are a lot of factors that make Mexico stand out from the rest of the emerging markets,” Monex’s Avila said.

Source: Bloomberg, 11.08.2011 by Andres R. Martinez amartinez28@bloomberg.net, David Papadopoulos papadopoulos@bloomberg.net

Filed under: Brazil, Mexico, News, BM&FBOVESPA, BMV Bolsa Mexicana de Valores, Brazil, Debt, Economic Crisis, Fixed Income, Latin America, Mexico, Performance Report

FiNETIK – Asia and Latin America – Market News Network