CETIP
From MarketsWiki
| CETIP S.A. (Balcão Organizado de Ativos e Derivativos) | |
| |
| Founded | 1986 |
|---|---|
| Headquarters | Rio de Janeiro, Brazil |
| Products | Custody, settlement and trading of private and OTC secuirites |
| Web site | http://www.cetip.com.br/ |
Brazil's CETIP is Latin America's largest central depository for OTC and private securities and derivatives and has more than 8,200 customers in Brazil's financial services industry plus over US$1 trillion in assets under custody.
Formerly known as Cetip SA Balcao Organizado de Ativos e Derivatos[1], CETIP raised just over US$500 million (881.4 million reais) through an initial public offering in October 2009 with its shares trading on BM&FBOVESPA.
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Background
CETIP was launched in 1986 by the Central Bank of Brazil and a group of financial institutions with the aim of promoting more safety and efficiency in the Brazilian private securities market by functioning as an interconnected financial network for private securities and derivatives trading. It is the market's main custodian for corporate fixed income - for which it is currently Latin America's largest custodian - and OTC derivatives.[2]
CETIP currently has approximately 8,200 total customers ranging from banks to brokerages and investment funds and has US$1.1 trillion (2.6 trillion Brazilian reais) in assets managed. It is Brazil's largest custodian of OTC derivatives and corporate bonds and the leading processor of its wire transfers. CETIP's average daily trading volume is more than ($28.2 billion) 50 billion reais.
Ownership moves
CETIP remained a mutually-owned non-profit organization until its demutualization in mid-2008 in advance of an [[initial public offering that had been scheduled for later that year but was postponed due to the financial crisis. In May 2009 Boston-based global private equity firm Advent International bought a 30 percent stake in CETIP for about US$170 million and was at that time Brazil's largest private-equity transaction of 2009.[3] Then in mid-October 2009, CETIP announced it would again proceed with an IPO on Oct. 28 on Sao Paulo's BM&FBOVESPA exchange at a stock price of 13 to 17 reais.
Controlling shareholders in CETIP eventually raised 881.4 Brazilian reais by selling 67.8 million common shares at 13 reais each in late October 2009, making it Brazil's third-biggest IPO of the year.[4] Private equity firm Advent International was CETIP's largest shareholder prior to the IPO with almost one third of its stock. Other major shareholders included Banco Santander Brasil and Bradesco, according to Reuters. But on their first day of trading, CETIP shares fell almost 8 percent to 11.89 reais as investors became concerned at the direction of the Brazilian government's tax policies toward market transactions.[5]
Latest results
CETIP's 2009 financial results, released in early March 2010, showed significant revenue growth in both the fourth quarter of 2009 (Q409) and throughout the whole of 2009.[6] Net revenue in Q409 grew to 56.8 million Brazilian reals, 24.8 percent higher than Q408. Whole-year net revenues for 2009 rose 26.5 percent over 2008 to hit 208.8 reals. A company statement attributed the revenue increases to a growth in transactions, custody services and 'monthly utilization'.
Latest news
As Brazil's main share depository, CETIP will now be assigned the role of collector for the Brazilian government's newly introduced tax on Brazilian stocks traded as American depository receipts (ADRs).[7] Brazil introduced the 1.5 percent tax on ADRs in mid-November 2009 to cool off the recent rapid rise in foreign investment capital flowing into Brazilian securities and pushing up the value of the Brazilian real, Dow Jones reported. One month earlier Brazil's government imposed a 2 percent tax on forex inflows also aimed at dampening down the real.
CETIP is currently negotiating with global, German-based securities depository and settlement company Clearstream, part of the Deutsche Borse group, to jointly develop the collateral management services CETIP offers its clients, according to a Reuters report of March 12.[8] The announcement was made one day after CETIP announced solid revenue growth in 2009, with increases above 20 percent in most of its earnings numbers.
CETIP recorded $US67 billion in offshore financial derivative contracts held by Brazilian banks in March 2010 as part of increased supervision of such contracts in Brazil. CETIP director Jorge Sant’Anna told Bloomberg news that amount could rise by a further $50-60 billion over 2010 as Brazilian corporations look to further hedge risk.[9] He estimated that the market for over the counter derivatives in Brazil could grow 20-30% annually until 2012 as demand for such derivatives returns to its pre-2008 levels.
References
- ↑ Brazil's Cetip IPO raises 881.4 mln reais - filing. Reuters. Retrieved on March 17, 2010.
- ↑ About CETIP. CETIP. Retrieved on October 15, 2009.
- ↑ Advent International Invests $170m in Brazilian Financial Services. Latin American Venture Capital Association. Retrieved on October 15, 2009.
- ↑ Cetip holders raise 881.4 mln reais in Brazil IPO. Reuters. Retrieved on November 22, 2009.
- ↑ Shares In Brazil's Cetip Drop On First Day Of Trading. Dow Jones. Retrieved on November 22, 2009.
- ↑ CETIP RECORDS ADJUSTED NET INCOME OF R$110.5 MILLION IN 2009, ADJUSTED EBITDA AND NET REVENUE GROW 32.9% AND 26.5%, RESPECTIVELY, IN THE YEAR. CETIP. Retrieved on March 16, 2010.
- ↑ Brazil Hits Its ADRs With Levy In Fresh Bid To Tame Real. Dow Jones. Retrieved on November 22, 2009.
- ↑ Brazil's Cetip in talks with Germany's Clearstream. Reuters. Retrieved on March 16, 2010.
- ↑ Brazil’s Cetip Registers $67 Billion of Offshore Derivatives. Businessweek. Retrieved on April 6, 2010.
