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 largest public securities-trading market, offering 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 also implemented a successful order routing agreement with CME Group and expanded its partnership with CME to develop a multi-asset class platform. The agreement allowed BM&FBOVESPA customers to access the CME Group's contracts through the same trading system on which they trade in the domestic market, BM&FBOVESPA PUMA Trading System; CME Group customers can trade at BM&FBOVESPA through the CME Globex platform.[1]

The company sold its 4 percent stake in CME Group on April 7, 2016 in order to raise funds to buy its Brazilian rival, Cetip SA. In a securities filing, BM&FBovespa said the decision implied the end of the cross-holding agreement with CME. A Cetip takeover would make BM&FBovespa the dominant exchange in Brazil.[2] BM&FBovespa also acquired a 4.1 percent stake in its Mexican peer, Bolsa Mexicana de Valores, in a deal worth around 136 million reais ($37 million).[3]

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. [4]

BM&FBOVESPA is a member exchange of the World Federation of Exchanges.[5][6]

Background

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) - and ranked third among the world's leading securities exchanges by market cap.[7] It is also now the leading Latin American exchange and the second largest in the western hemisphere, surpassing NYSE Euronext and Nasdaq OMX.[8]

Key Products

BM&FBOVESPA's benchmark equity index is known in Brazil as the Indice Bovespa (IBovespa)[9] but is also called the Bovespa Index by many western news sources.[10] 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.[11]

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 Developments

  • BM&FBovespa launched a new clearing house on August 18, 2014, after four years of developing the platform. The exchange first transfered exchange-traded and over-the-counter derivatives to the new clearing house, and will follow that with equities in 2015. The clearing house completes a R$1.5bn project to overhaul Brazil’s trading infrastructure. BM&FBovespa's chief operating officer Cícero Vieira said the lower margin requirements of the new clearing house would free up a total of R$20bn in the market. BM&FBovespa is also planning to sell a blueprint for the clearing house's technology to three other emerging market countries.[12] 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.[13]
  • In March of 2011, it became known that Bolsa Mexicana de Valores (BMV), the Mexican stock exchange, was in “very advanced” talks with its Brazilian counterpart BM&FBovespa over an order-routing agreement expected to increase trading volumes between Latin America’s two largest bourses significantly.[14]
  • 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.[18]

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.[19] 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. 2014 FIA Annual Global Futures and Options Volume: Gains in North America and Europe Offset Declines in Asia-Pacific. FIA.
  2. BM&FBovespa raises $1.25 billion from CME stake sale to buy rival. Reuters.
  3. BM&F Bovespa acquires 4.1% stake of Mexico bourse. MarketWatch.
  4. {{{name}}}. Futures Industry Association.
  5. 2010 Annual Report & Statistics. World Federation of Exchanges.
  6. Members. World Federation of Exchanges.
  7. São Paulo exchange raises CME stake. Financial Times.
  8. About BM&FBOVESPA. BM&FBOVESPA.
  9. Indice Bovespa (BVSP). WikiInvest.
  10. BOVESPA. Bloomberg.
  11. BOVESPA Indices - Brazil Index 50 (IBrX 50). BM&FBOVESPA.
  12. BM&FBovespa to launch clearing house. The Financial Times.
  13. BM&FBOVESPA Clearinghouse starts operating. BM&FBOVESPA.
  14. BMV In Talks With Bovespa Over Routing. FT.com.
  15. Brazil BM&FBovespa ups CME stake on high-speed bet. Reuters.
  16. BM&FBovespa to Raise Stake in CME, Start Platform. Bloomberg.
  17. São Paulo exchange raises CME stake. Financial Times.
  18. BM&F Bovespa challenges global exchanges. Financial Times.
  19. Chief Executive Officer Edemir Pinto. BM&FBOVESPA.