Latin American Electronic Trading: Caliente!
Note that while this report is distributed by TABB Group, the Intellectual Property Rights belong to Aditat, therefore excluding this report from the Research Alliance catalog.
Latin America, dominated by Brazil and Mexico, is growing faster than fortune seekers from the global exchanges, banks and vendors can fly south. The major stock markets were up 400% over the last decade, and the Brazilian derivatives market, BM&F, is now the sixth largest derivatives market in the world with growth of 67% in Q1 2010. In March 2010 the number of single stock option contracts traded on the Brazilian derivatives exchange BM&F passed the number of contracts traded on CBOE, ISE or NasdaqOMX.
Brazil and the rest of Latin America have not received the same adulation as other emerging market rock stars. This changed in 2009, as Brazil emerged early and unscathed from the worldwide financial crisis.
Latin America’s time has now come. In the last two years, major exchanges have gone public, trading volumes have soared, brokers have rushed to deploy electronic trading services, early mover technology vendors have racked up impressive sales, and high frequency trading has begun.
Proprietary trading shops of local banks co-located at the exchanges battle it out with traders who have just flown in from Chicago. Brokerage firms rush to deploy new algorithms to their buy-side clients. Exchanges play “hard to get” with global exchanges eager to bolster their emerging market credentials. Local technology vendors with relationships try to keep out foreign vendors with advanced technology. Brazilian bankers migrate back from New York to Sao Paulo because the bonuses are better. And everyone’s trying to arbitrage local stocks against American Depository Receipts.
The opportunity is there. This report is your map.
Latin America. Caliente!
This 41-page PowerPoint report focuses on the two largest markets Brazil and Mexico, but also covers Chile, Argentina, Peru and Columbia. The report covers both equity and listed derivative markets.
The report is divided into these sections:
- Overview of the economies in the region, and stock market performance.
- Exchange trading volumes – Data on size and growth rates of Latin American exchanges with a focus on BOVESPA (Brazil equities), BM&F (Brazil derivatives) and Mexico Exchange.
- Exchanges - Review of the current state and future plans of the major exchanges in each market, including BM&FBovespa. Mexico Exchange, Santiago Exchange (Chile), and Argentinian exchanges. Technologies used internally, trading systems and networks offered to clients, partnerships such as BM&F and CME, regional alternative marketplaces.
- Brokerage – Local and international equity and derivative brokers, recent acquisitions, technologies used in house and offered to clients.
-Three case studies of local brokerage firms showing what in-house and vendor trading technologies they use and offer to clients.
- Buy Side – Data on the types of asset management firms and what assets they own. Pension funds/hedge funds/retail investors/proprietary trading groups/foreign investors. Trading software and network vendors used by the buy side, including both local and foreign vendors.
- Technology vendors – Market shares by OMS technology vendor, including local and global vendors. Usage of OMS, EMS, equity and derivatives systems, market data and network connectivity. Including local vendors CMA, Extol, Cedro, Estado, Apligraf and international vendors GL Trade, Bloomberg, Reuters, Fidessa, Marco Polo Networks, Charles River RTS, Pat Systems, Trading Technologies, CQG, TradingScreen, NYSE Technologies/NYFIX, BT Radianz, Progress Software Apama, Streambase. In-depth information about local OMS, market data and network vendors CMA and Extol.
- High frequency trading – Data on the growth of DMA/algorithmic trading/high frequency trading in Brazil during the last two years across both equity and derivatives trading. Review of what high frequency or algorithmic services exchanges and brokers provide. Case study of a high frequency trading firm in Brazil, with detail on the technologies used
- Merger & Acquisition targets – local technology vendors with potential to be acquired.
About the Author
Martin Koopman has worked in the securities trading industry as President Cameron Systems, President North America Orc Software, CEO FMO Pty Ltd and as a consultant with The Boston Consulting Group. He lives in New York City and can be contacted at firstname.lastname@example.org