FiNETIK – Asia and Latin America – Market News Network

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VAM: Vietnam Equity Market – May 2014

Market Updates – After tumbling as much as 11% in the first 2 weeks of May, to a new low of 513.9 on May 13th, due to the tension with China in Vietnam’s East Sea, the market rebounded in the second half of the month and closed down 2.8% (VNIndex) and 2.3% (VN30). The HNX lost 5.1%.

View full market analysis VAM Monthly Newsletter – May ’14.

Inflation advanced slightly in May, backed by moderate improvement in demand and supply.

May inflation was recorded at 0.2% MoM, down from April’s 0.33%. Consequently, the CPI increased only 1.08% YTD. Moderate improvement continued to be recorded in both demand and supply sides. 5M2014 real retail sales advanced 6% YoY, surpassing the same period last year’s growth rate of 4.6%, whilst the index-industry products (IIP) increased 5.6% YoY, higher than the rate of 4.8% of 5M2013.

Sustained YTD trade surplus driven by FDI sector

GSO estimated that 5M2014 trade surplus reached USD 1.6bn, a slight drop from the historic high of USD 2bn recorded for 4M 2014 in April, due to a trade deficit of USD 400mn in May. FDI continued to be the biggest contributor to the economy as the sector generated a trade surplus of USD 7bn in 5M2014 whilst the domestic sector made a trade deficit of USD 5.3bn. FDI disbursement remained steady with 5M2014 disbursed FDI recorded at USD 4.6bn, up 0.4% YoY.

FDI sector’s confidence largely restored through appropriate compensation and strong determination of the Vietnamese Government to prevent recurrence of riots

The PM has requested urgent support and compensation for businesses affected by anti-China protests and riots, including tax cuts, workers’ salary subsidy and land rental reduction etc. to offset against damages suffered. These prompt incentives and the Government’s affirmative measures to punish rioters and to avoid recurrence of such events have more or less calmed the public’s and FDI sector’s sentiment, as well as restored investors’ confidence.

Rumor about another round of currency depreciation was denied by the SBV

As the USD/VND rate has been increasing, amidst the tension with China, to 21,140 – 21,190 (official bank rates) in May, the highest level since the beginning of the year, concern about another depreciation of the Dong has again emerged. However, the SBV denied the rumor, given (1) sustained YTD trade surplus; (2) historic high FX reserves; and (3) the wide gap between deposit rates of the Dong and the USD. The SBV also affirmed that the depreciation (if any) will not exceed 1% in 2014 (down from the 2% stated at the beginning of the year) to show their confidence in maintaining the Dong’s stability.

Vietnam consumer confidence once again improving

Vietnam Consumer Confidence Index reached 99 points in 1Q2014 in the global survey of Nielsen, the highest level since Q4/2011. Consumers were found to be more willing to spend after 2 years of consumption tightening as 56% of respondents across the country had positive perception of their personal finances for the year ahead. Although saving still remained the top priority, consumers channeled more spare cash into tourism, house renovation and stock investment.

Our view The sell-off due to the political tension with China was fairly short-lived as by month end, the VNIndex was almost back to where it started for the month. We think although the tension may not go away very soon, it will not have significant long-term downside impact on Vietnam’s economy. In fact, economic stability has been maintained on the broad base since the beginning of the year with inflation under control, relatively stable exchange rate and sustained trade surplus. Discussion on amendments of the Law of Investment and a comprehensive legal framework for Public – Private Partnership (PPP) in the ongoing 7th cabinet meeting will provide investors with uniform guidance and regulations in PPP to encourage more private investment in infrastructure. This will also help to improve the administrative process in getting investment project approval to make the investment environment in Vietnam more favorable. The Government’s prompt support rendered to affected businesses in the anti-China riots has shown that FDI is still a top priority for Vietnam. We think the market will likely remain volatile in the coming weeks and we will continue to monitor it closely for buying opportunities.

Source: VAM, 13.06.2014

 

Filed under: Asia, News, Vietnam, , , , , , ,

VAM:Vietnam Market Analysis June 2013

Vietnamese stocks fell sharply in June on high redemption pressure from foreign investors, currency depreciation and growth concerns. At the end of Jun, VN-index closed at 481.1, slipping 7.19%, in line with the 7.45% decrease of VN30 whilst the HNX index declined 2.87%, closing at 62.76.
 
National Assembly meeting ended with concrete achievements
One month discussion of the National Assembly resulted in many positive achievements to revive the economy. First of all, political environment looked more stable as top leaders successfully completed the first ever confidence voting round with no member needing a second vote. Secondly, the Government has shown their determination to restructure the economy through concrete resolutions. Accordingly, the government announced that from 2H 2013 there might be VND 40 trillion (nearly USD 2bn) to be disbursed each month to maintain credit growth at 12%. Besides, the National Assembly agreed to cut corporate income tax from 25% to 22% in 2014 and further to 20% in 2016 for all firms whilst for SMEs, tax is cut to 20% as soon as 1/7/2013 in an effort to spur growth. 
 
Dong devalued due to many pressures
The SBV devalued the Dong for the first time since 2011 after recent tension in the FX market. Thereference rate was weakened by 1% to 21,036 dong per dollar. Given the current trading band of +/-1%, the ceiling and floor exchange rates are now VND 21,246/USD, and VND 20,826/USD, respectively. The current stress in the FX market should be due to i) high official demand for gold imports from commercial banks to close their short positions by end June as requested by SBV, plus the unofficial import demand due to big gap between local and international prices, ii) narrowing gap between the USD and VND deposit rates after a recent VND deposit rate cut, iii) expansion of trade deficit, and iv) asset unloading of foreign investors in emerging markets as the US Fed has announced to wind down QE recently.
 
Production continues to be sluggish
Low appetite for local consumption and tightening export markets such as China (-1.9% y-o-y) and Japan (-0.9% y-o-y) has led production activities to face a marked downturn in June. Indeed, the HSBC Manufacturing Index tumbled to 46.4, the 11-month low level, in the second consecutive month of contraction. In general, the economy expanded 4.9% y-o-y in the first six months, which is a small improvement compared to that of 4.38% y-o-y a year earlier.
 
Inflation under control and more rate cuts to bolster growth
As inflation in June was merely 6.69% y-o-y, which slightly increased compared to the 6.3% y-o-y recorded in May, another move in monetary adjustment came from rate cuts to help stabilize the foreign-currency market as well as revive production. Accordingly, the ceiling rates for USD deposit will be cut to 0.25% pa (from 0.5%) for institutions, and to 1.25% pa (from 2%) for individuals whilst those with VND deposits with maturity ranging from 1-month to less than 6-month will be curtailed to 7% pa (down from 7.5%). As domestic consumption persists at low levels and companies’ ability to absorb bank loans remain limited, a rate cut is necessary to support growth besides other implementations such as a tax cut program and a loan stimulus package for the real estate market.
 
Our ViewThe first half of 2013 has been focused on curbing inflation to stabilize the macro environment. Fortunately, the situation is not as dire as CPI is positively under control, which leaves room to consider more drastic measures to boost growth. The interest rate is now at its lowest and unlikely to face more cuts while the Dong devaluation is essential in order to reduce tension in the FX market. Although recent currency depreciation is rather worrying, we do not think of it as distressing because pressure on the currency will start easing as the foreign reserve remains healthy. The target of 2-3% currency volatility setting from the beginning of this year by the Governor is likely to be met. Accompanied by recent adjustments in monetary policy, other efforts, namely tax cut and stimulus package are expected to accelerate the economy in the second half of this year. In the meantime, we continue to hold and pick stocks that we have strong conviction in based on the resilient business model, solid balance sheet, sound cash flows, prudent management and attractive valuation. We also maintain careful watch on government policy changes to take action when there are clearer signs of economy turnaround

Filed under: Uncategorized, , , , , ,

Derivatives: Struggling Into the New Era – Outlook 2013/14

The past few years have been challenging for the global economy but it seems as though the derivatives industry sustained more than its share of insults and injuries over the past year or so. Still reeling from the trauma of MF Global in October of 2011, exchange-traded volume went into its first nosedive in decades.

Urgent regulatory requirements added intense cost and time pressures to company staffs that were already stretched. A non-clearing FCM, Peregrine Financial, collapsed in scandal. OTC derivatives struggled with complex regulatory mandates and weak volume.

Perhaps the only positive for the year was that mergers and acquisitions at both the macro and micro level imply that innovation and creativity are still powerful industry drivers. That in turn suggests that the creative dynamism that has characterized the derivatives industry for so many years still has some innings to go.

Read the detailed report about Derivatives market outlook, challenges and issue of big deals, exchange mergers and new start ups, customer protection, Regulatory,Extraterritorial and Tax problems  and more. 

Source: WEF 25.04.2013 by Nicolas Ronalds

Filed under: Asia, Brazil, Exchanges, Risk Management, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

VAM: Vietnam Market Analysis – February 2013

After a long Tet holiday, rumors about financial policy changes and further arrests of top bank leaders emerged and eroded all the stock market’s gains from the beginning of February. Consequently,  the VN-Index closed the month with a 0.52% loss, whilst HNX shed 1.05%. With a 3.05% fall, the VN30 seemed to be even more sensitive to the panic.
 
Inflation subdued in the month of Tet
Thanks to the phasing out of pharmaceutical products price increases, inflation slowed somewhat in February as the consumer price index climbed 7.02 percent YoY (versus 7.07 percent YoY in January). The concerns about the “traditional” consumer price hikes during the Tet holiday did not materialize, partly due to weaker festive demand than usual. The government also decided not to raise retail prices of petroleum products including gasoline to ensure economic stability and keep inflation under control. However,  Ministry of Finance did not provide the information on price stabilization fund balance for petroleum products, so it remains unclear on how the gasoline price control will transpire in the coming time.
 
Trade surplus continued, foreign reserves given a boost
According to GSO, the trade balance in February continued to show a surplus, reaching USD900mn, the highest monthly level ever and the ninth month of surplus in a row. With this result, following the USD700mn in Jan, the YTD trade surplus is now around USD1.6bn, a comfortable level which should lend healthy support to the already strong foreign reserve (by Vietnam standard) and consequently the value of the Dong. However, exchange rate showed unexpected volatility in the first two weeks after Tet, possibly due to brisk actions in the gold market and the upsetting rumours. To comfort the market, a Central bank spokesman has stated that no depreciation is being planned for the foreseeable future.
 
Newly released NPLs figure eased concerns on banking system reform.
While the Prime Minister requested to establish the AMC in 1Q 2013, the new NPLs figure released by the Governor was encouraging. Accordingly, bad debt on banking system has come down from 8% in June 2012 to 6% as banks wrote off non-performing loan balance at the end of last year. As the Government set credit growth target of 12% in 2013 to boost economic growth and implement the “dual-targets”, the destination for credit flow is still at stagnation point. Whilst total liquidity (M2) increased 3.31% YTD, the credit growth up to 21 Feb was till in negative territory at – 0.16% YTD.
 
Business environment still appears challenging
In line with stagnation on the supply side, demand remained weak with retail sales increasing only 3.6% in Jan-Feb period, which is not different from Dec 2012′s level. While the inventory level hiked 19.9% Y-o-Y, industrial production showed no improvement. In a related note, the government released that by February, the number of enterprises going out of business was 8,600, which exceeded the figure of 8,000 newly created enterprises, implying the fact that the business environment is still very difficult.
 
A bumpy recovery progress reflected by a drop in the PMI.
After adjusting for seasonal factors, including the Tet holidays, the HSBC Vietnam Manufacturing PMI posted 48.3 in February, down from 50.1 in January. This has been the largest dip since last August. Notably, in February, the survey showed a first drop in four months of manufacturing output; a decline in the level of new order received and a sixth time in seven months increase in average input prices.
 
Our ViewAfter a long Tet holiday, the stock market was hit by negative rumors about possible currency devaluation, financial policy changes and further arrests of banking officials. Although these rumours were addressed and corrected in a timely manner by the relevant authorities, the stock market and economy in general showed its uncertainty and vulnerability. In 2013, the story will be mainly about boosting production and restructuring the economy. Fortunately, Vietnam’s leaders’ determination is supported by a relatively stable currency and a healthy trade balance.
We remain cautious and will carefully watch development in the political space and changes in macro economy as that will definitely affect the stock market. We are generally comfortable with our equity position but may look to selectively acquire more stocks if the macro environment becomes more favourable.

Filed under: Banking, News, Risk Management, Vietnam, Wealth Management, , , , , , , , , ,

VAM: Vietnam Market Analysis – December 2012

Improved economic conditions somewhat buoyed the stock market in the last month of the year as all three indices moved up
The VN-index closed at 413.7, gaining 11.23% while VN30 closed at 485.4, picking up 9.42%. HNX was the best performer of three indices, increasing 11.83% to close the month at 57.09.
 
Macro indicators showed joyful December
Market confidence was regained thanks to better-than-expected CPI, trade balance, interest rates cut and detail implementation of the Government on spurring the economy. For the first time in four months CPI slowed in December, with consumer prices rising 6.81% from a year earlier after climbing 7.08% Y-o-Y in November. Consequently, the State Bank cut benchmark interest rates for a sixth time to help companies cope with difficulties in production and business. The trade balance posted a first year of surplus (of US$284mn) since 1993. Despite a gloomy year, FDI disbursement reached USD10.5bn, dropping a marginal 5% YoY. As a result, foreign reserves are significantly improved, reaching US$24 billion, equivalent to 12 weeks of import. The Dong remains unchanged.
 
However, stability was achieved at the cost of growth
Vietnam’s economy expanded at the slowest pace in 13 years in 2012 as a slump in bank lending dampened domestic demand. GDP grew 5.03%, down from 5.89% in 2011, and the lowest since 1999. Bad debt and the gloomy business environment hampered credit growth, which ended 2012 at 6.45% YoY while total liquidity growth and deposit growth were 19.85% and 20.29% YoY, respectively.As the lenders’ liquidity position becomes comfortable and full-year inflation was a lower-than-expected 6.81%, the central bank decided to cut all policy rates and deposit cap rate by 1%, effective on December 24, in an attempt to make banks lend more. But as the real interest rate is still positive, some are speculating on another rate cut, even as the World Bank warned against easing too soon.
On the other front, the HSBC’s Vietnam PMI index fell back to deterioration in December, down to 49.3 from 50.5 last month, as a result of reduction in order inflows, disinvestment of inventory holdings and stagnating production volumes.
 
Government details its determination to spur the economy
To spur the economy and resolve the financial system, the Government started implementing a detailed action plan. Businesses may enjoy lower corporate income tax rate in 2013, i.e. 23% for large enterprises and 20% for SMEs (down from 25% earlier); real estate will receive more support based on a newly approved proposal by MoF, which includes a 50% VAT reduction, 2-year extension on the deadline of land use fees payment and the establishment of AMC aiming to solve rising NPLs. Moreover, USD300mn from Asian Development Bank in a 25-year loan package will help to restructure SOEs in 2013.
 
Authority changes rules to push the capital market
On the capital market, SSC submitted its proposal in support of the stock market to the Ministry, in which key measures might include tax incentives, allowing to issue stocks below par, increasing margin ratio and trading band and most importantly, increasing foreign ownership limit. Otherwise, SBV governor also announced that they are working on revising the Decree 69/2007, wherein special cases, i.e for restructuring commercial banks, the foreign ownership ratio might be allowed to exceed 30%. Since 10th January, the number of gold bar shops will decline from 8,000 to 2,400 including around 900 in Ho Chi Minh City and 400 in Hanoi, after SBV completes the licensing procedures. 
 
Our ViewOn the background of good macro economic indicators coming out in December and improved investor sentiments after seeing the Government’s determination to spur the economy being detailed into action plans, the stock market had a good run in the last month of 2012. We are cautiously optimistic and have started to mobilize cash into Vietnam Dong to be ready for deployment toward increasing equity level for the Fund. We are keen to buy stocks of strong companies with sound cash flow and healthy balance sheets in fundamental industries such as consumers and materials.

Filed under: Banking, Exchanges, News, Risk Management, Services, Vietnam, Wealth Management, , , , , , , , , , , ,

VAM: Vietnam Market Analysis – November 2012

Whilst SBV is still struggling to tackle bad debt, additional banking scandal has fanned market concerns about banking system instability
Coming as another shock that made the market drop 3.27% in one day was the resignation of Mr. Dang Van Thanh as Chairman of Sacombank following his wife’s resignation from Sugar Bourbon Tay Ninh. Though there are many rumors spread around this news, the market is looking at it as uncertainty still exists in the banking system. Fortunately, depositors’ reaction seemed to be calmer this time as there was no sign of “bank run” after the resignation. In the meantime, decision on the SBV’s initiative in setting up company to own and manage bad debt for banks has not been reached.
 
Stability continues to be the priority for next year
The government ended the National Assembly meeting with a good showing of strong determination to restructure the banking system at the lowest cost possible, and preventing any systemic collapse. Since the peak in August last year, inflation has been successfully controlled, at the cost of slowest GDP growth in 13 years. The national CPI growth rate posted a modest increase of 0.47% M-o-M in November, a deceleration from 0.85% in the last month and 2.2% in September when one-off adjustments were made to pharmaceutical and health care items. The government forecasts that 2012 CPI would be around 7.5% Y-o-Y and a decade low target of 6% is set for next year as well.
 
Lower inflation adding pressure on rate cuts
Lower expected FY2012 inflation of 7.5% and healthy liquidity condition of lenders are adding more pressure on rate cuts. By Nov 20, total deposit also increased 15.98% YTD while credit growth including trust investment and corporate bond investment was only 4.15% YTD. Banks now turn to bonds to put excess cash to work, which consequently causes the yield to drop. Under this circumstance, the Government has made known their contemplation of cutting deposit rate or putting a ceiling for lending, with a view to creating better environment to spur economy in 2013. The Government expects the economy will expand at 5.5% next year.
 
Dong confidence is strengthened
Despite the gloomy condition, FDI sector is doing well. Foreign companies’ export turnover rose 30% in eleven months through November, accounting for about two-thirds of total exports. The YTD FDI disbursement has reached USD9.9bn up to November 2012. This amount was down just slightly from USD10.05bn in 11M2011. The negligible decline showed that the foreign capital flow into Vietnam was still stable, helping the balance of payment to remain in surplus this year. The YTD trade balance is also a surplus despite a small deficit in November. And it is likely that Vietnam will record the first year of trade surplus since 1995. The deficit if any, will be lower than USD1bn. The export gains have reinforced Vietnam’s foreign-exchange reserves, expected to reach the equivalent of about 12 weeks of imports by the end of the year, which in turn would support the value of Dong.
 
PMI data signals recovery
The seasonally adjusted HSBC Vietnam Manufacturing PMI posted an increment to 50.5 from 48.7, which is above the neutral 50.0 value for the first time since September 2011. Although the index showed only a marginal improvement, it reflected returns to growth in both production levels and new orders during November. The increase in November’s PMI underscores optimism the economy is recovering after 14 month slowdown, which is in line with the situation in China and U.S. 
 
All three indices moved lower over November with low liquidity
The Vn-Index closed at 377.82, losing 2.64%. The HN exchange tumbled 3.36% to 51.05, whilst the VN30 dropped 3.19% to 443.68.
 
Our ViewWe are hopeful that the worst may be over. The market is waiting for clearer signs of economic turnaround while the Government is showing its determination in solving its problems. The trade-off between stable economy and growth requires consistency in policy setting. The stability of Dong and low inflation target level next year make Vietnam’s business environment more attractive. Fortunately, on the bottom-out journey, Vietnam would be helped by the data signaling a recovery in U.S. and China.

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

Mexico: BMV Mexican Stock Exchange Aims to Attract High Frequency Traders with Platform Upgrade

Mexican stock exchange operator Bolsa Mexicana de Valores detailed its investment in a new trading platform that the bourse hopes will reduce execution time for trades while also boosting trading activity.

The platform will enable the bourse to complete a trade in 90 microseconds, or to facilitate around 100,000 transactions per second, putting it on par with the Singapore Stock Exchange and besting the New York Stock Exchange’s completion rate of 150 microseconds per trade, the Mexican exchange said. The platform, which began handling stock transactions on Sept. 3 and will handle derivatives trades starting in December, cost the bourse 150 million pesos ($11.5 million.)

The Mexican exchange hopes the updated platform will attract a greater number of sophisticated international market participants who are interested in executing algorithmic trades. Currently, such high-frequency trades account for 17% of the volume operated on the bourse, versus 70% of the volume in the U.S., the exchange said. In August the exchange averaged 1.9 million stock transactions a day.

The new platform also incorporates filters to prevent erroneous trades, for example by detecting price action that is out of sync with the market or unusually high volumes. In April the local brokerage house of Bulltick Capital Markets triggered a mini “flash crash” by entering an erroneous trade, knocking Mexico’s benchmark IPC stock index down about 2 percentage points.

Source: FIF Financial Information Forum, 17.09.2012

Filed under: BMV - Mexico, Exchanges, Latin America, Mexico, Trading Technology, , , , , , , , , , , , , , , ,

Greater China Exchanges: Hong Kong, Shanghai and Shenzhen Stock Exchanges set up joint venture

Hong Kong Exchanges and Clearing Limited (HKEx), Shanghai Stock Exchange (SHSE) and Shenzhen Stock Exchange (SZSE) signed an agreement today (Thursday) to establish a joint venture (JV) in Hong Kong with an aim to develop financial products and related services.  The three exchanges hope this new venture will help promote the development of China’s capital markets, enhance the competitiveness of these markets and promote the internationalisation of the three bourses.

 The principal business of the JV will include, but not be limited to, the development and franchising of index-linked and other equity derivatives products; the compilation of cross-border indices based on products traded on the three markets; and the development of industry classification for listed companies, information standards and information products.  They will also include market promotion, customer services, technical services and infrastructure development.

Initially, the JV will develop a series of cross-border indices on which a family of index products will be introduced.  This series of indices will include a benchmark cross-border index comprising large Mainland enterprises listed on HKEx’s wholly-owned subsidiary.  The Stock Exchange of Hong Kong Limited, SHSE and SZSE, and two indices based on this cross-border index – an index comprising A-share constituents and an index comprising Hong Kong market constituents.  The index products will include equity index futures and options based on these indices and they will be traded on HKEx’s derivatives market.

The JV’s nine-member board will be comprised of three directors nominated by each of the exchanges.  SHZE and SZSE will each nominate a Joint Chairman from their representatives on the board.  HKEx will nominate the Chief Executive from its designated directors.

The JV will have an initial paid-up capital of $300 million, with HKEx, SHSE and SZSE each contributing $100 million.  The three exchanges will have equal shareholding interest in the JV.  The exchanges aim to establish the JV within three months from the execution of the agreement.

“Building on the many well-established ties among the three exchanges, the new venture will provide a new platform for our cooperation and we hope that it will contribute to the further development of Hong Kong and the Mainland’s capital markets,” said HKEx Chief Executive Charles Li.

“As China continues to open up and the RMB gradually internationalises, it is inevitable we will have to compete in the international capital market.  Our efforts to further cooperation with HKEx and develop products for the offshore market will bring about a win-win situation for both Hong Kong and the Mainland,” said SHSE President Zhang Yujun.

“The establishment of the JV will help increase foreign investors’ exposure to the Mainland market via Hong Kong.  In addition, the JV can help raise the Mainland capital market’s influence in offshore markets and provide opportunities to explore opening up measures,” said SZSE President and CEO Song Liping.

Source: Mondovisone, 28.06.2012

Filed under: Asia, China, Exchanges, Hong Kong, , , , , , , , , , ,

CFFEX and Deutsche Börese signe Co- Operation Agreement

Deutsche Börse and China Financial Futures Exchange (CFFEX) today signed a Memorandum of Understanding (MoU) in Beijing. The parties agreed on a co-operation and an extensive exchange of information in order to facilitate the further development of both financial markets.

In accordance with the MoU, the two exchange organizations are to start a comprehensive sharing of knowledge and information on business areas and regulatory developments. Further elements of the co-operation agreement include joint training and education initiatives, as well as an employee exchange program and regular visits from each exchange’s senior management.

“We are very pleased to have signed this agreement with CFFEX and look forward to deepening our relationship with leading institutions and authorities of China’s financial markets,” said Andreas Preuss, Deputy CEO Deutsche Börse and CEO of Eurex, the derivatives arm of Deutsche Börse.

Source: MondoVisione, 17.05.2012

Filed under: China, Exchanges, , , , ,

China Financial Futures Exchange & NYSE Euronext sign MOU

Exchanges enter agreement to develop futures and options markets in Europe, US and China

Beijing, Hong Kong, London, New York - NYSE Euronext (NYX) and the China Financial Futures Exchange (CFFEX) have signed a Memorandum of Understanding (MOU) to promote a bilateral partnership to support the development of the exchanges futures and options markets.

The agreement was designed to explore opportunities for extending the reach of both exchanges. The MOU will enable the two exchanges to explore opportunities for information sharing; exchanging and training employees; as well as business cooperation such as joint research into developing strategies for the derivatives market.

“Asia is a strategic priority for NYSE Euronext and we are delighted to partner with Mr. Yuchen and his colleagues at the China Financial Futures Exchange,” said Duncan L. Niederauer, Chief Executive Officer, NYSE Euronext. “This agreement deepens our long term commitment to the region, and by sharing best practices and working collaboratively, CFFEX and NYSE Euronext will further promote the development and advancement of both the Asian and global financial markets.”

Garry Jones, Group Executive Vice President and Head of Global Derivatives, NYSE Euronext, said: “We have customers who trade our derivatives contracts all over Asia and this MOU with the China Financial Futures Exchange – along with our physical presence in Hong Kong, Singapore and Tokyo – further illustrates our commitment to Asian markets. We look forward to unlocking efficiencies and trading opportunities in both markets by working closely and sharing expertise with the CFFEX.”

“This collaboration will further develop both exchanges derivatives markets and facilitate the experiences of our customers and NYSE Euronext’s,” said Zhu Yuchen, Chief Executive Officer , Chinese Financial Futures Exchange.

Source: Automated Trader, 16.05.2012

Filed under: China, Exchanges, , , , , , ,

Brazil:BM&FBOVESPA annuonces 2011 Market Performance and News

BM&FBOVESPA announced 2011 market performance.
Financial volume and number of transactions in the equity market;
  • Total number of contracts traded, DI futures contracts traded and of corn futures contracts and options on corn futures traded in the Derivatives Market;
  • Financial volume and number of equity lending transactions.

Read other highlights (update 11.01.2012):

The total financial volume and the number of trades in the equity market set a record in 2011

In 2011, the total financial volume in the Bovespa segment set a historic record of BRL1.61 trillion, surpassing the previous record of BRL1.60 trillion set in 2010. The average daily financial volume also established a new record of BRL6.49 billion, exceeding the BRL6.48 billion reached in 2010.

The total number of trades reached the milestone of 141,229,649 in 2011, surpassing last year’s record high of 106,418,437. The average daily trading volume also established a new record at 567,187, exceeding the 2010 mark of 430,844.

Historic records set in 2011:

  • Financial volume and number of transactions in the Bovespa segment;
  • Total number of contracts traded, DI futures contracts traded and of corn futures contracts and options on corn futures traded in the BM&F segment;
  • Financial volume and number of equity lending transactions.

Bovespa Segment

In 2011, the total financial volume in the Bovespa segment set a historic record of BRL1.61 trillion, surpassing the previous record of BRL1.60 trillion set in 2010. The average daily financial volume also established a new record of BRL6.49 billion, exceeding the BRL6.48 billion reached in 2010.

The total number of trades reached the milestone of 141,229,649 in 2011, surpassing last year’s record high of 106,418,437. The average daily trading volume also established a new record at 567,187, exceeding the 2010 mark of 430,844.

In December, the financial volume in the Bovespa segment was BRL130.68 billion, compared to the BRL118.72 billion registered in November. The daily average financial volume was BRL6.22 billion in December, compared to BRL5.93 billion in the previous month. There were a total of 12,746,660 transactions carried out in December compared to 12,284,986 in November, and the average daily trading volume was 606,984, compared to 614,249 in November.

Equities

In 2011, the most traded stocks were: Vale PNA, with BRL174.33 billion; Petrobras PN, with BRL125.81 billion; OGX Petróleo ON, with BRL73.22 billion; Itauunibanco PN, with BRL67.73 billion; and Vale ON, with BRL45.05 billion.

In December, the most traded stocks were: Vale PNA, with BRL11.30 billion; Petrobras PN, with BRL8.75 billion; Itauunibanco PN, with BRL5.59 billion; OGX Petróleo ON, with BRL4.33 billion; and Bradesco PN, with BRL3.66 billion

Ibovespa

The Ibovespa closed out 2011 at 56,754 points, down 18.11% for the year.

In 2011, the best performing stocks were: TIM PART S/A ON (+72.58%); CIELO ON (+53.32%); REDECARD ON (+49.20%); KLABIN S/A PN (+42.53%); and ELETROPAULO PN (+41.13%). In 2011, the worst performing stocks were: B2W VAREJO ON (-71.07%); GAFISA ON (-64.95%); HYPERMARCAS ON (-62.06%); GOL PN (-50.00%); and V-AGRO ON (-48.39%).

In December, the Ibovespa declined 0.21%.

The best performing stocks on the Ibovespa, in December, were: TRAN PAULIST PN (+16.03%); ELETROBRAS PNB (+14.06%); CPFL ENERGIA ON (+13.62%); ELETROPAULO PN (+12.97%); and LLX LOG ON (+12.33%). In December, the worst performing stocks were: V-AGRO ON (-39.62%); GAFISA ON (-23.28%); ROSSI RESID ON (-19.76%); BROOKFIELD ON (-16.67%); and CIA HERING ON (-15.02%).

All other indexes

All of the other indexes calculated by the Exchange performed as follows:

IBrX-50 (-14.06% with 8,279 points at the end of 2011; up 0.99% in December);

IBrX-100 (-11.39% with 19,706 points at the end of 2011; up 1.52% in December);

ISE (-3.28 with 2,018 points at the end of 2011; up 3.65% in December);

ITEL (+15.59% with 1,670 points at the end of 2011; up 5.11% in December);

IEE (+19.72% with 32,613 points at the end of 2011; up 9.47% in December);

INDX (-12.12% with 9,618 points at the end of 2011; up 2.31% in December);

IVBX-2 (-4.71% with 5,756 points at the end of 2011; up 0.86% in December);

IGC (-12.45% with 6,679 points at the end of 2011; up 1.76% in December);

ITAG (-11.54% with 8,708 points at the end of 2011; up 2.88% in December);

SMLL (-16.63% a 1,200 points at the end of 2011; up 0.79% in December);

MLCX (-10.39% with 877 points at the end of 2011; up 1.77% in December);

ICON (+0.55% with 1,693 points at the end of 2011; up 3.03% in December);

IMOB (-27.71% with 749 points at the end of 2011; down 5.47% in December);

IFNC (-7.40% with 3.468 points at the end of 2011; up 4.13% in December);

ICO2 (-7.37% with 1,025 points at the end of 2011; up 3.18% in December);

IBRA (-10.84% with 1,810 points at the end of 2011; up 1.68% up);

IDIV (+13.99% with 2,926 points at the end of 2011; up 5.56% in December);

IGCT (-12.36% with 1,877 points at the end of 2011; up 2% in December);

IMAT (-28.51% with 1,592 points at the end of 2011; up 0.90% in December);

UTIL (+22.61% with 2,939 points at the end of 2011; up 9.74% in December).

Market Value

The market value (market capitalization) of the 373 companies listed at BM&FBOVESPA at the end of 2011 totaled BRL2.29 trillion. In 2010, the market value was BRL2.56 trillion for the 381 companies that were listed at that time.

Special Corporate Governance Levels

At the end of 2011, the 182 companies that were part of the BM&FBOVESPA Special Corporate Governance Levels represented 64.87% of the market capitalization, 78.68% of the financial volume, and 82.72% of the trades on the cash market. At the end of 2010, there were 167 companies, representing 65.65% of the market capitalization, 75.14% of the financial volume, and 78.77% of the cash market trades.

In December, the 182 companies that were part of the BM&FBOVESPA Special Corporate Governance Levels represented 64.87% of the market capitalization, 75.82% of the financial volume, and 84.90% of the trades on the cash market. At the end of November, there were also 182 companies, representing 64.55% of the market capitalization, 82.40% of the financial volume, and 85.89% of the cash market trades.

Market Participation

The cash market (round lot) accounted for 93.9% of the total financial volume in 2011, followed by the options market with 4.3%, and by the forward market with 1.8%. The after-market traded BRL11.37 billion in 724,314 trades.

In December, the cash market (round lot) accounted for 94.6% of the total financial volume, followed by the options market with 4%, and by the forward market with 1.4%. The after-market traded BRL887.60 million with 48,002 trades, compared to BRL1.02 billion with 52,952 trades during the previous month.

Investor Participation

In 2011, foreign investors led trading in the Bovespa segment accounting for 34.74% of total contracts traded, compared to 29.57% in 2010. They were followed by institutional investors with 33.34%, compared to 33.29% in 2010, and individual investors with 21.44%, compared to 26.41% during the previous year. Financial institutions accounted for 8.65%, up from 8.35% in 2010, and companies accounted for 1.74% compared to 2.31% the previous year. The group Others accounted for 0.08% compared to 0.06% in 2010.

In December, foreign investors were also the leaders in the Bovespa segment, accounting for 39.07% of total contracts traded, compared to 32.98% in November. They were followed by institutional investors with 32.20% in December, compared to 34.29% in the previous month, and individual investors with 17.99% in December, compared to 20.46% in November. Financial institutions accounted for 8.81% in December, down from 9.33% in the previous month, and companies accounted for 1.92% in December, compared to 2.87% in the previous month. The group Others accounted for 0.01% in December, compared to 0.07% in November.

Foreign Investment

In 2011, the net flow of foreign investment into the Brazilian stock market, up to December, reached BRL8.23 billion, which is the result of BRL9.58 billion in acquisitions carried out by foreign investors in stock offerings (including BRL8.0 billion registered in Brazil) and the negative balance of BRL1.35 billion on the BM&FBOVESPA secondary market.

In December, the balance of transactions carried out by foreign investors at BM&FBOVESPA was a negative BRL2.42 billion, which was the net balance between stock sales of BRL52.08 billion and stock purchases of BRL49.66 billion.

Foreign investor participation in stock offerings, including IPOs, represented 55.3% of the total BRL17.33 billion in transactions related to the publication of the closing announcement dates ending on January 3, 2012, pursuant to information available on the Exchange’s website, under the media section.

Check the data for public offerings and IPOs

Investment Clubs

At the end of 2011, the number of investment clubs stood at 2,852, with 10 new clubs opening in December. In November, total liquid assets were BRL8.97 billion and the number of investment club participants was 117,078, according to the latest data available.

Individual Investors

At the end of 2011, the number of individual investor accounts in the equities market stood at 583,202. At the end of 2010, that number was 610,915.

ETFs

In 2011, the 10 ETFs available for trade at BM&FBOVESPA (BRAX11, CSMO11, MOBI11, BOVA11, SMAL11, MILA11, PIBB11, IT NOW IFNC 11, IT NOW ISUS 11, and IT NOW GOVE 11) reached a total financial volume of BRL12.11 billion with 577,723 transactions carried out. In 2010, there were seven ETFs (BRAX11, CSMO11, MOBI11, BOVA11, SMAL11, MILA11, PIBB11), which together accounted for a total financial volume of BRL6.99 billion, and 196,567 transactions.

In December, 74,438 transactions were carried out with the 10 ETFs available for trade at the Exchange. In November, that number was 86,037. The total financial volume in December was BRL1.21 billion, compared to BRL1.45 billion in November. In December, the ETF BOVA11 registered the largest financial volume with BRL1.15 billion, compared to the BRL1.37 billion it registered in November.

Securities lending

In 2011, securities lending transactions at BM&FBOVESPA reached a new milestone with a financial volume of BRL732.75 billion and 1,417,787 trades, surpassing 2010’s financial volume of BRL465.6 billion and 971,558 trades.

In December, the financial volume for securities lending transactions also set a new record with BRL84.76 billion, exceeding the mark of BRL67.30 billion set in November. The number of transactions in December was 121,897, compared to 122,983 in November.

Real Estate Investment Funds

In 2011, Real Estate Investment Funds (FIIs) accounted for a financial volume of BRL912.46 million and 77,075 transactions. During the previous year, they accounted for a financial volume of BRL379.09 million and 24,983 transactions. At the end of 2011, there were 66 Real Estate Investment Funds registered and authorized for trade on the BM&FBOVESPA markets and on its OTC market.

In December, Real Estate Investment Funds (FIIs) accounted for a financial volume of BRL144.16 million and 7,617 transactions. During the previous year, they accounted for a financial volume of BRL78.54 million and 7,812 transactions.

Fixed Income

In 2011, the financial volume for the fixed income secondary market, counting both the Bovespa Fix and the Soma Fix, totaled BRL268.14 million, compared to BRL416.20 million in 2010. Of this total, debentures accounted for BRL142.78 million, Receivables Investment Funds (FIDC) accounted for BRL25.17 million, and Mortgage Backed Securities (CRI) accounted for BRL100.19 million.

In December, the financial volume for the fixed income market, counting both the Bovespa Fix and the Soma Fix, totaled BRL14.4 million, compared to BRL9.5 million in November. Of this total, debentures accounted for BRL11.76 million, and Mortgage Backed Securities (CRI) accounted for BRL2.38 million.

BM&F Segment

Em 2011, the BM&F segment set a new record for contracts traded with 671,979,899, surpassing the previous 2010 record of 618,634,157. The financial volume in 2011 totaled BRL46.50 trillion, compared to a total of BRL42.51 trillion in 2010, and the average daily trading volume in 2011 was 2,687,920, compared to 2,494,493 in 2010.

In December, the markets in the BM&F segment accounted for a total of 43,358,744 contracts traded and a financial volume of BRL3.10 trillion, compared to 54,301,136 contracts and BRL3.87 trillion in November. The average daily trading volume in December was 2,064,702, compared to 2,715,057 in November. Open interest contracts ended the last trading day of December with 38,230,036 positions, compared to 37,001,711 in November.

Check the data for General Volume

Financial Derivatives

In 2011, the interest rate futures (DI) traded a record 320,821,062 contracts, compared to the previous record of 293,065,417 set in 2010. The US dollar futures ended the year with 86,167,955 contracts traded, compared to 82,453,621 in 2010. The Ibovespa futures traded 21,650,138 contracts in 2011, compared to 18,039,345 during the previous year, and in 2011 the Euro futures (EUR) traded 552,481 contracts up from 390,295 in 2010.

In December, the interest rate futures (DI) accounted for 21,511,662 contracts, compared to 28,561,969 in November. The US dollar futures ended December with 6,239,499 contracts traded, compared to 7,189,024 in November. The Ibovespa futures traded 1,618,153 contracts compared to 1,774,340 during the previous month, and, in December, the Euro futures (EUR) traded 34.546 contracts down from 62.901 in November.

Mini Contracts

In 2011, derivatives mini contracts traded 28,517,331 contracts compared to 18,700,470 in 2010. The Ibovespa futures traded 26,234,515 mini contracts in 2011, up from 16,705,118 in 2010, and the US dollar futures accounted for 1,710,007 mini contracts traded compared to 1,969,427 in 2010.

In December, derivatives mini contracts traded 2,338,964 contracts compared to 2,663,926 in November. The Ibovespa futures market traded 2,172,318 mini contracts, compared to 2,473,109 the previous month. The US dollar futures market traded 164,136 mini contracts down from 186,664 in November, and the open interest on mini contract futures ended December with 14.852 positions compared to 43,983 in November.

Commodity derivatives

In 2011, a total of 2,389,454 futures and options commodity contracts were traded, down from 2,702,705 in 2010.

A total of 558,311 Corn futures and options contracts were traded in 2011, surpassing the previous record of 490,265 in 2010. Live cattle futures and option contracts totaled 1,170,100 in 2011, down from 1,352,469 in 2010. Arabica coffee ended 2011 with 463,121 contracts traded compared to 694,348 in 2010, while the Ethanol futures market traded 94,726 contracts in 2011, up from 22,615 in 2010 and the Soybean market traded 70,639 contracts.

In December, a total of 160,585 futures and options commodity contracts were traded, down from 245,561 in November. When trading closed in December there were 129,006 open interest contracts, compared 133,410 at the end of the previous month.

Live cattle futures and options contracts totaled 82,627, in December, compared to 160,824 in November. Corn closed out the period with a total of 44,768 futures and options contracts traded, up from 42,279 in November. Arabica coffee ended December with 23,106 contracts traded, down from the 28,791 contracts traded in November. The Soybean market registered 3,310 contracts in December compared to 6,622 during the previous month, and the Ethanol futures market accounted for 6,774 contracts traded, compared to the 7,045 contracts traded in November.

Click here for the monthly commodities report

Agribusiness Securities

After adding up all of the transactions carried out in the SRTA registration system, the agribusiness securities registered at BM&FBOVESPA totaled BRL8.68 billion in 2011, compared to BRL1.24 billion in 2010. In 2011, a total of 46,690 records were also checked for agribusiness securities, and together they represented the cumulative financial volume of BRL29.43 billion, up from the 15,270 records with a trading volume of BRL10.05 billion in 2010. The stock of LCAs (Agribusiness Credit Bills) registered in the stock market in 2011 totaled BRL7.46 billion, compared to the BRL297 million registered during the previous year.

After adding up all of the transactions carried out in the SRTA registration system, the stock of agribusiness securities registered at BM&FBOVESPA totaled BRL8.68 billion in December, compared to BRL8.02 billion in November. The stock of LCAs totaled BRL7.46 billion in December, compared to BRL6.77 billion in November.

Spot Gold

In 2011, the spot gold market (250 grams) traded 23,579 contracts, compared to 9,567 in 2010. The financial volume for the spot gold market totaled BRL509.80 million, compared to BRL179.02 million the year before.

In December, the spot gold market (250 grams) traded 749 contracts, down from 2,240 in November. The total financial volume in December was BRL18.03 million, compared to BRL55.44 million in the month before.

Spot Dollar

In 2011, the spot US dollar totaled 12,859 transactions with a financial volume of US$32.89 billion, compared to 14,339 transactions and a financial volume of US$31.41 billion in 2010. The financial volume of U.S. dollars traded on the Brazilian interbank settlement market and registered in the BM&FBOVESPA FX Clearinghouse was US$588.83 billion, with 31,462 trades, down from US$718.31 billion and 36,428 trades in 2010.

In December, the spot dollar totaled 1,547 transactions with a financial volume of US$2.07 billion. In November, 1,999 transactions were registered with a financial volume of US$2.17 billion. In December, the financial volume of U.S. dollars traded on the Brazilian interbank settlement market and registered in the BM&FBOVESPA FX Clearinghouse was US$40.62 billion with 2,711 transactions, compared to US$37.65 billion and 2,475 transactions in November.

Public Fixed Income

In 2011, the financial volume for the public fixed income secondary market, counting all the transactions carried out on Sisbex, totaled BRL257.58 billion, compared to BRL116.89 billion in 2010. Of this total, BRL5.1 billion was related to final transactions and BRL251.1 billion was related to repo transactions. The financial volume for public securities lending transactions totaled BRL1.36 billion in 2011.

In December, the financial volume for the public fixed income secondary market, counting all the transactions carried out on Sisbex, was BRL18.6 billion, up from BRL6.9 billion in November. Of this total, BRL32.10 million was related to final transactions and BRL18.57 billion was related to repo transactions.

Investor Participation

In 2011, financial institutions led trading in the markets of the BM&F segment accounting for 36.41% of total contracts traded, compared to 42.40% in 2010. They were followed by institutional investors with 31.27% in 2011, compared to 29.61% in 2010, and foreign investors with 25.86% compared to 22.40% during the previous year. Individual investors ended the year with 5.22%, up from 3.88% in 2010, and companies accounted for 1.24%, compared to 1.71% the previous year.

In December, financial institutions led trading in the markets of the BM&F segment accounting for 38.08% of total contracts traded, compared to 35.75% in November. They were followed by institutional investors with 32.53%, down from 34.49% the previous month. During this same period foreign investors accounted for 23.04%, compared to 23.18%. Individual investors ended the year with 4.48% in December compared to 5.19% in November; and companies accounted for 1.83%, up from 1.34% the month before.

Individual investors

At the end of 2011, there were 135,256 individual investors with at least one active account registered at the Derivatives Clearinghouse, compared to 137,820 at the end of the previous year.

DMA

BM&F Segment

In December, the transactions carried out via Direct Market Access (DMA) in the BM&F* segment totaled 25,617,886 contracts traded in 2,483,514 trades. During the previous month, 31,537,229 contracts were traded in 2,887,206 trades.

The volumes registered by each DMA model in the BM&F segment were as follows:

Traditional DMA – 12,266,856 contracts traded in 879,061 trades in December, compared to 15,783,631 contracts traded in 1,219,049 trades in November;

Via DMA provider (including orders routed via the Globex System) – 8,225,628 contracts traded in 234,539 trades in December, compared to 10,736,890 contracts traded in 252,343 trades the month before;

DMA via direct connection – 1,255 contracts traded in 303 trades in December, up from 1,034 contracts traded in 289 trades during the previous month; and

DMA via co-location – 5,124,147 contracts traded in 1,369,611 trades in December, compared to 5,015,674 contracts traded in 1,415,525 trades in November.

In December, the transactions carried out by foreign investors who were presented to BM&FBOVESPA by CME (which either use the order routing system or access the BM&FBOVESPA markets via co-location) totaled 2,240,922 contracts traded in 537,582 trades. In November, those totals were 2,297,168 and 554,624 respectively.

BOVESPA Segment

In December, the transactions carried out via Direct Market Access (DMA) in the BOVESPA*segment had a total financial volume of BRL86.68 billion in 12,297,326 trades. During the month of November, those numbers were BRL92.18 billion and 11,690,154 respectively.

The volumes registered by each DMA model in the BOVESPA segment were as follows:

Traditional DMA – BRL71.67 billion in 9,727,649 trades in December, compared to BRL76.89 billion in 9,411,041 trades in November;

Via DMA provider – BRL1.04 billion in 188,596 trades in December, compared to BRL981.77 million in 119,734 trades in November; and

DMA via co-location – BRL13.87 billion in 2,369,659 trades in December, compared to BRL14.21 billion in 2,150,118 trades in November.

* Direct access to the BM&FBOVESPA market segments is carried out through DMA models 1, 2, 3 and 4.

In model 1 or traditional DMA, the client accesses the trading system through technological intermediation of a brokerage house.

In model 2 or via DMA provider, the client does not use the technological intermediation of a brokerage house, but rather connects to the system through an authorized access provider. DMA via order routing with CME Globex is also a form of DMA model 2.

In model 3 or DMA via direct connection, the client connects to the system through a direct connection.

In model 4 or DMA via co-location, the client installs its own computer within the Exchange’s facilities.

Notes: The volumes registered by access modality include both buy and sell sides of a trade. The volumes by access modality for both the BM&F and the Bovespa market segments have been reported in a consolidated manner in the BM&FBOVESPA statements since May 2009.

Source: BM&FBOVESPA, 10.01.2012

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

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.

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.

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, , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Brazil: BM&FBOVESPA – News September 2011 – Nr.20

Launch of the first stage of the BM&FBOVESPA PUMATrading System

BM&FBOVESPA announces the conclusion of the first stage of development and integrated tests with the market of its new trading platform, named the BM&FBOVESPA PUMA Trading System. This is a multi-asset electronic trading platform that has been developed by BM&FBOVESPA and CME Group. BM&FBOVESPA PUMA Trading System will replace the Global Trading System (GTS), Mega Bolsa, BOVESPA FIX and SISBEX, integrating them into a single system with greater processing capacity, extremely low latency, and new functions. The implementation will occur in stages:

  • 1st Stage: Substitution of GTS (derivatives and spot foreign exchange);
  • 2nd Stage: Substitution of Mega Bolsa (equities and equity derivatives);
  • 3rd Stage: Substitution of BOVESPA FIX (fixed-income corporate securities) and SISBEX (government securities).

The Exchange implemented the BM&FBOVESPA PUMA Trading System in the spot foreign exchange market on August 29, 2011. The other stages will be executed in the following weeks, at dates to be announced at an opportune moment. As part of the GTS replacement effort, instruments will migratein four-stages. At each stage, orders sent to the Exchange for these contracts will be processed exclusively by the new system. The migration stages are:

  • 1st Migration: Spot foreign exchange contracts.
  • 2nd Migration: Agricultural derivatives.
  • 3rd Migration: Financial derivatives (interest rates, foreign exchange, inflation indices, gold etc.), except for derivatives based on stock indices.
  • 4th Migration: Derivatives based on stock indices.

Automated solution for market surveillance, operation and market oversight

BM&FBOVESPA and BOVESPA Market Supervision (BSM), the Brazilian self-regulatory organization in charge of inspecting and supervising transactions and trade authorizations, announced on September 15 that they will use NASDAQ OMX’s SMARTS Integrity market surveillance platform to monitor trading across their equities and commodities platforms. Using SMARTS Integrity, BM&FBOVESPA and BSM will have a comprehensive portfolio of alert scenarios for market behavior.

> More information

BM&FBOVESPA and BNDES present new portfolio for the Carbon Efficient Index

BM&FBOVESPA and BNDES announced on September 5 the composition of the theoretical portfolio of the Carbon Efficient Index, valid from September to December 2011. The ICO2 is an index composed of stocks in IBrX-50 index companies that have accepted involvement in the initiative, adopting transparent practices as regards greenhouse gas emissions (GGEs). The calculation of shares in the ICO2 index takes into consideration the greenhouse gas emissions and free float of companies.

The portfolio valid as of today can be viewed here.

New head of BM&FBOVESPA for UK

BM&FBOVESPA announces that Sergio Gullo has been hired as the new chief representative for BM&FBOVESPA in London. He will report to BM&FBOVESPA International Business Development Officer Lucy Pamboukdjian and be responsible for operations with the European, Middle Eastern and African markets. Sergio Gullo has been active in the financial market for more than 27 years. He was Business Development Manager in the United Kingdom for BGC Partners and has worked in financial institutions such as Banco Votorantim and Renaissance Capital, specializing in emerging markets and always in commercial areas with a focus on fixed income and structured products. He also held a wide range of positions at Lloyd’s TSB Bank for 19 years, in both Brazil and the UK.

New office in London

The BM&FBOVESPA office in London has moved to One New Change, 4th floor (London, EC4M, 9AF, United Kingdom). The London office may be contacted by e-mail at sgullo@bvmf.com.br and by telephone at (+44) 203 379 3978.

BM&FBOVESPA and Shenzhen Stock Exchange Sign Memorandum of Understanding

BM&FBOVESPA (BVMF) and the Shenzhen Stock Exchange (SZSE) signed on September 26 a memorandum of understanding (MOU) which includes personnel exchange, mutual training and information and experience sharing. Ms Song Liping, President of the Shenzhen Stock Exchange, and Mr. Edemir Pinto, CEO of BM&FBOVESPA, signed the MOU last month during the 5th International, Financial and Capital Market Conference in Campos do Jordão, in the state of São Paulo.

BM&FBOVESPA’s options and capital raising activity

According to the WFE (World Federation of Exchanges), BM&FBOVESPA is ranked as #1 in volume of Stock Options contracts trades and #4 in IPOs (Capital Raised). These and other regulated exchange industry numbers are available at: http://www.world-exchanges.org/statistics

Securities Lending

In August, the total number of securities lending transactions reached a record 141,721 compared to the previous record of 121,971 in May 2011 and to 114,989 in July. Financial volume was BRL 62.63 billion in August from BRL 52.16 billion the previous month.

Ibovespa and other index portfolios, valid for September-December 2011

BM&FBOVESPA has announced the Ibovespa theoretical index portfolio, which will be valid from September 5 to December 29, 2011, based on the closing of the September 2, 2011 trading session. The new portfolio now includes common shares in BR Malls and Cia Hering, which brings its total to 68 stocks in 63 companies.

> More information

BM&FBOVESPA launches app for Google Chrome web browser

BM&FBOVESPA announced on September, 16th that users of the Google Chrome web browser can download a free app that allows real time monitoring of the share prices of companies traded on BM&FBOVESPA and of the directions taken by the main capital market indexes. This tool allows users to customize their share portfolio, storing in the “Favorites” tab the companies that they wish to monitor daily. The app includes films that explain stock investment, wealth creation, and financial education. It also contains messages that are sent to the BM&FBOVESPA twitter channel @Info_BMFBOVESPA

To obtain the BM&FBOVESPA Google Chrome app, please access the Google Web Store and download the file at: https://chrome.google.com/webstore.

2011 EVENTS

Family Office Summit – Latin America

BM&FBOVESPA is currently sending invitations for this event promoted by the World Research Group and which will be held in São Paulo September 26-28. A BM&FBOVESPA representative is scheduled to talk about alternative investments. The summit will present current trends for optimizing effective strategies and alternative methods to produce investments for single and multi family offices in the Brazilian capital market. There will be a special networking session bringing together managers, single and multi family offices, advisors and consultants.

Location: Intercontinental São Paulo – Alameda Santos, 1123, São Paulo , SP.
Date: September 26-28, 2011.

> Full Agenda and Registration

2nd FX Growth Markets Series: Brazil – Profit & Loss

BM&FBOVESPA will join the Profit & Loss FX Growth Markets conference on October 20, 2011 at the Tivoli Hotel in São Paulo. Profit & Loss has been operating its highly successful series of Forex Network and FX Growth Markets conferences for more than 10 years, with regular annual events held in London, New York, Chicago, Singapore, Brazil, Mexico, Colombia, Chile, Shanghai and Toronto, and comes to Brazil for the second time. A BM&FBOVESPA representative will talk at the event.

Location: Tivoli Hotel São Paulo, São Paulo, Brazil
Date: October 20, 2011.

> Full Agenda

BM&FBOVESPA at Chicago’s FIA EXPO

BM&FBOVESPA will exhibit at FIA EXPO 2011. The event attracts approximately 5,000 people from more than 30 countries, from senior staff at brokerage firms and exchanges to floor traders, pension fund managers, corporate treasurers, CTAs and CPOs, and individual investors. BM&FBOVESPA staff will present the Exchange’s products, connectivity, DMA access via Globlex, co-location and others.

Location: Hilton Chicago, USA
Date: October 10-12, 2011

> More info

The World Cup of ETFs and Indexing Latin America

BM&FBOVESPA is lending its support to the World Research Group’s “World Cup of ETFs and Indexing Latin America.” The event aims at providing attendees with the best practices for ETFs use, as well as a comprehensive analysis of market structure, regulations and current and future opportunities. The expected audience includes pension funds, hedge fund managers and investors, investment advisors, financial consultants, and other market participants. A BM&FBOVESPA representative will talk about the Exchange’s ETF products.

Location: São Paulo (TBC)
Date: October 17-18, 2011.

> Full Agenda and Registration

Volumes and trades by Direct Market Access (DMA)

BM&F Segment
In August, BM&F* market segment transactions carried out through order routing via Direct Market Access (DMA) registered 41,417,494 contracts traded and 4,431,750 trades. In July, the volume reached 20,009,841 contracts traded and 2,417,398 trades.

The volumes registered by each access modality in the BM&F segment were as follows:

  • Traditional DMA – 17,540,231 contracts traded, in 1,306,241 trades, in comparison to 7,440,774 contracts and 797,002 trades in July;
  • Via DMA provider (including orders routed via the Globex System) – 14,088,756 contracts traded, in 435,281 trades, compared to 7,040,432 contracts and 258,881 trades in July;
  • DMA via direct connection – 4,210 contracts traded in 830 trades, against 3,691 contracts and 977 trades in July;
  • DMA via co-location – 9,784,297 contracts traded, in 2,689,398 trades, compared to 5,524,944 contracts and 1,360,538 trades in July.

In August, transactions carried out by foreign investors presented by CME to BVMF (who use the Globex-GTS order routing system or access BVMF markets via co-location) totaled 5,308,308 contracts traded, in 1,235,349 trades, compared to 2,897,744 contracts and 688,862 trades in July.

BOVESPA Segment
In August, order routing via DMA in the BOVESPA* segment totaled BRL 138,522,096,000.00 and 17,021,408 trades, from BRL 95,030,778,000.00 and 11,225,193 trades the previous month.

Trading volumes per type of DMA in the BOVESPA segment:

  • Traditional DMA – Volume of BRL 120,451,427,000.00 and 14,098,638 trades from BRL 87,674,861,000.00 and 10,091,956 in July;
  • DMA via co-location – Volume of BRL 16,691,370,000.00 and 2,755,498 trades from BRL 6,381,361,000.00 and 1,007,081 in July;
  • DMA via provider – Volume of BRL 1,379,299,000.00 and 167,272 trades from BRL 974,556,000.00 and 126,156 in July.

* Direct access to the BM&FBOVESPA market segments is carried out through DMA models 1, 2, 3 and 4. In model 1 or traditional DMA, the client accesses the GTS or Mega Bolsa through technological intermediation of a brokerage house. In model 2 or via DMA provider, the client does not use the technological intermediation of a brokerage house, but rather connects to the system through an authorized access provider. DMA via order routing with CME Globex is also a form of DMA model 2. In model 3, the client connects to the system through a direct connection. In model 4 or via co-location, the client installs its own computer within the Exchange’s facilities.

Notes:

The volumes registered by access modality include both buy and sell sides of a trade.

The volumes by access modality for both the BM&F and the BOVESPA market segments have been reported in a consolidated manner in the BM&FBOVESPA statements since May 2009.

MARKET RESULTS

BM&F Segment August 2011

Derivatives markets in the BM&F segment (including financial and commodities derivatives) totaled 78,606,873 contracts and BRL 5.23 trillion in volume in August, compared to 44,199,125 contracts and BRL 3.35 trillion in July. The daily average of contracts traded in the derivatives markets in August was 3,417,690, in contrast to 2,104,720 in July. Open interest contracts ended the last trading day of August with 37,821,302 positions, compared to 30,716,596 in July.

BOVESPA Segment August 2011

In August 2011, the equity markets (BOVESPA segment) financial volume totaled a record BRL 177.906 billion, in a record 16,234,673 trades, with daily averages of BRL 7.73 billion and a record 705,855 trades. This was in comparison to the prior total volume record of BRL 155.55 billion in October 2010, the prior total trades record of 11,172,707 in May 2011 and the prior daily average trades record of 544,88 in February 2011.

Source:BM&FBOVESPA, 20.09.2011

Filed under: BM&FBOVESPA, Brazil, FIX Connectivity, News, Trading Technology, , , , , , , , , , , , , , , , , , , , ,

China: Shanghai Stock Exchange: SSE 380 Style Indices, SSE Health Care Index, SSE Agriculture Index to be launched

To further enhance the SSE and CSI index family as well as to provide new analysis tool and underlying instrument for investors, SSE 380 Style Indices 、SSE Health Care Theme Index and SSE Agriculture Theme Index and are to be launched on October 18th,2011 by SSE and CSI.

See the SSE 380 Style Indices Methodology

Source; Mondo-visione, 20.09.2011

Filed under: China, Exchanges, News, , , , , , ,

Brazil: Greek accord might buy some peaceful time – Monthly Allocation July 2011 – BANIF

Greek accord might buy some peaceful time

We maintain our negative view on the international market for July. In the US, after a series of weak economic indicators, even worse than initially expected, there is no evidence of a turnaround in the short term, especially while the unemployment rate remains at high levels. The ongoing recovery in Japan, together with a slight reduction in commodity prices and the slight reduction in US interest rates (10-yr bonds) seem to us to be a base for some economic recovery that to date has not yet materialized. We believe that potentially increasing inflation might stress the Chinese market, but this possibility remains uncertain for the moment. In the Euro zone, economic indicators tend to play a secondary role to political tension, as the outcome for the Greek debt remains undefined. The recent measures approved by the parliament enabled only the receipt of a tranche of aid previously negotiated. We expect a temporary ease in this tension, which might pick up shortly as it negotiates a second aid package by September, under uncertain political support from all European countries. The dominant feeling is that Greece has no orthodox solution while it remains under the Euro umbrella and tied to its rules. The biggest fear, however, is not of Greece defaulting, but that it would spread the problem to other countries also on the list of troubled economies.

Despite our negative view for international markets, we believe that July may be less negative than June was, mainly due to the temporary ease that the Greek accord brought. However, tensions should increase with the negotiations for the next agreement, expected by September.

Local inflation likely to continue low

Inflation in July might continue low, although not as low as in June, which confirmed and even surpassed the most optimistic expectations. While in June inflation was slightly negative (according to some of the main indexes), consensus expectations for the IPCA in July are around 0.15-0.20%. This reduction was a result of seasonal factors that might lose effect shortly, with inflation likely to pick up as they do.

Delinquency rates increased slightly in June, but we tend to believe this is not a source of concern because: 1) personal income is likely to show improved figures because of the recently reduced inflation and 2) the amount of late payments, the step before writing off debt, decreased for two months in a row.

We predicted that June’s local positive sentiment based on reduced inflation would overcome a bad international scenario, but this did not materialize. We continue with the same views for July, bad internationally and good locally. This time, however, we believe that the negative mood might continue to prevail.

We changed our portfolio to be more defensive, having in mind our somewhat negative view for the market. We have added Tractebel and Telesp (both with 5% stake), two traditionally defensive names, we reduced weight on Even (from 10% to 5%) and have withdrawn Itaú.

Source: BANIF CVC, 01.07.2011

Filed under: BM&FBOVESPA, Brazil, China, News, , , , , , , , , , , ,

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