BM&FBOVESPA

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BM&FBOVESPA S.A. (also BM&F Bovespa)
BM&FBOVESPA.gif
Founded 2008
Headquarters São Paulo, Brazil
Key People Edemir Pinto, CEO
Products BOVESPA Index, Brazil Index 50
Website www.bmfbovespa.com.br
Releases Company News

Brazilian equities and derivatives exchange BM&FBOVESPA is Latin America's leading exchange and the second largest in the western hemisphere, surpassing NYSE Euronext and Nasdaq OMX.[1] It offers products from equities to spot commodities to interest-rate futures contracts.

BM&FBovespa was created in 2008 by the merger of two existing exchanges, the Bolsa de Mercadorias & Futuros and Bolsa de Valores de Sao Paulo.

BM&FBovespa posted volume of over 1.35 billion derivatives contracts traded in 2015, according to the Futures Industry Association's survey of the world's leading derivatives exchanges, down 4.4 percent from 1.42 billion in 2014. [2]

BM&FBOVESPA is a member exchange of the World Federation of Exchanges.[3][4]

History

BM&FBOVESPA was formed in 2008 by the union of two São Paulo-based securities exchanges - the São Paulo Stock Exchange (BOVESPA) and the Brazilian Mercantile and Futures Exchange (BM&F).[5]

BM&FBOVESPA called a halt to all open outcry exchanges trading on June 30, 2009 and shifted to electronic trading of its high-volume interest rate futures contracts. Analysts said the move allowed the exchange to attract more sophisticated automated traders. It subsequently opened offices in London to go with other foreign outposts in New York and Shanghai.[6]

The company has continued a strategy of expanding by buying minority stakes in other Latin American exchanges. It acquired its Brazilian rival, Cetip SA, in April of 2016, making it the dominant exchange in Brazil. It also purchased minority stakes in Chile’s Bolsa de Comercio de Santiago and Mexico’s Bolsa Mexicana de Valores SAB.[7]

BM&FBovespa became the top shareholder of the Bolsa de Valores de Colombia in July of 2016, buying 9.99 percent of the Colombian exchange for 44 million reais ($13 million).[8]

The bourse has said it wants to play a role in the financial integration of Latin America.

BM&FBovespa previously had an order routing agreement with CME Group and and developed a mutli-asset class platform that allowed CME Group customers to trade at BM&F through CME Globex. [9] However, it sold its 4 percent stake in CME Group on April 7, 2016 to raise funds to buy Cetip.[10]

BM&FBovespa launched a new clearing house on August 18, 2014, after four years of developing the platform. The exchange transferred exchange-traded and over-the-counter derivatives to the new clearing house, and followed that with equities in 2015. The clearing house completed a R$1.5bn project to overhaul Brazil’s trading infrastructure.[11] The new clearinghouse includes exchange-traded and OTC derivatives; equities and corporate bonds; spot FX; and federal government bonds in a single clearinghouse and unites all four existing clearing houses. Previously all of these markets used separate clearinghouses.[12]

Key Products

BM&FBOVESPA's benchmark equity index is known in Brazil as the Indice Bovespa (IBovespa)[13] but is also called the Bovespa Index by many western news sources.[14] It is made up of the the market's most liquid stocks and is based on total returns weighted by their trading volume on the BOVESPA stock exchange.

BOVESPA's Brazil Index 50 (IBrX-50) measures total return of the 50 most liquid stocks listed on BOVESPA weighted according to the market value of their outstanding shares. The IBrX-50 is intended as a benchmark index for investors and portfolio managers and is rebalanced every four months.[15]

Contract Volume

Year Total Annual Volume* Percent Change
2015 1,358,592,857 (-)4.4%
2014 1,417,925,815 (-)11.6%
2013 1,603,706,918 (-)2.0%
2012 1,635,957,604 9.0%
2011 1,500,444,003 6.1%
2010 1,413,753,671 54.5%
2009 920,375,712 --

2014

Exchange Volume Percent Change
Bolsa de Volares de São Paulo 790,094,482 (-) 13.3%
Bolsa de Marcadorias & Futuros 627,831,333 (-) 9.4%
BM&FBovespa 1,417,925,815 (-) 11.6%

Key People

Two months after the 2008 merger that formed BM&FBOVESPA, former BM&F CEO Edemir Pinto was appointed the group's new CEO.[16] Pinto joined BM&F in 1986 and served as CEO from 1999 until May 2008 after previously serving as Derivatives Clearinghouse Officer from 1987.

References

  1. About BM&FBOVESPA. BM&FBOVESPA.
  2. 2015 Annual Global Derivatives Volume Survey. Futures Industry Association.
  3. 2010 Annual Report & Statistics. World Federation of Exchanges.
  4. Members. World Federation of Exchanges.
  5. São Paulo exchange raises CME stake. Financial Times.
  6. BM&F Bovespa challenges global exchanges. Financial Times.
  7. BM&F Bovespa acquires 4.1% stake of Mexico bourse. MarketWatch.
  8. BM&FBovespa Buys Top Colombia Exchange Stake in Integration Push. Bloomberg.
  9. 2014 FIA Annual Global Futures and Options Volume: Gains in North America and Europe Offset Declines in Asia-Pacific. FIA.
  10. BM&FBovespa raises $1.25 billion from CME stake sale to buy rival. Reuters.
  11. BM&FBovespa to launch clearing house. The Financial Times.
  12. BM&FBOVESPA Clearinghouse starts operating. BM&FBOVESPA.
  13. Indice Bovespa (BVSP). WikiInvest.
  14. BOVESPA. Bloomberg.
  15. BOVESPA Indices - Brazil Index 50 (IBrX 50). BM&FBOVESPA.
  16. Chief Executive Officer Edemir Pinto. BM&FBOVESPA.