Thursday, February 23, 2012 5:28:14 AM

BM&F Bovespa swaps hit record high volumes

BM&F Bovespa has seen derivatives trading soar to record highs while cash equities remained flat in a year of dramatic technical change at the Brazilian bourse.

Annual results filed this week show the bourse’s BM&F derivatives segment enjoyed a 7.8% year-on-year rise in average daily traded volume, hitting a new record of 2,700,600 contracts. BM&F Bovespa said the climb was attributable to the volume of trading in Brazilian-interest rate futures contracts, which were the most actively traded contracts, followed by index-based futures and mini-sized contracts, whose year-on volumes soared 37.9% and 51.4%.

But trading volume for the stock market was virtually unchanged from the earlier year at R$6.5 billion (US$3.8 billion).

“Average daily trading value picked up just a thread from the earlier year, but still enough to hit an all-time record,” the bourse said in its annual report, saying the virtually unchanged performance was a result of a 1.3% year-on-year climb in average capitalisation of the stock market and a slight increase in turnover velocity – to 64.2% from 63.8% – driving a 1.1% rise in volume traded in cash equities. “This climb, however, was quashed by a slump in combined average daily trading value in the forward and options markets.”

The bourse launched in 2011 its Puma trading system – a multi-asset electronic platform developed jointly with CME Group which enhances processing capacity, reduces latency and provides new functionality. With successful implementation of derivatives as the first phase now complete, BM&F Bovespa said it was on track to roll out the equities module this year.

“For 2012, we remain confident of the traction provided by the social mobility experienced in Brazil and the ascent of the middle class,” said Edemir Pinto, chief executive officer, BM&F Bovespa. “The significance of the capital markets for investors and entrepreneurs is steadily increasing, and with it the role of BM&F Bovespa as the exchange for all Brazilians.”

Bruce Love +44 (0)20 7397 3818