Software provider Progress Apama has predicted strengthening Brazilian demand for algorithmic trading solutions after unveiling its first client in the country, broker Ágora Corretora de Titulos e Valores Mobiliaro.
Giles Nelson, senior director of strategy at Apama, Progress Software’s complex event processing and algorithmic trading tools division, said both buy- and sell-side firms in Brazil are increasingly interested in using trading algorithms to facilitate their strategies.
“Algorithmic trading in Brazil is getting a lot of interest at the moment,” Nelson told theTRADEnews.com. “Brazil’s economy has been growing quite quickly, the market is quite liberal in nature and there is an increased amount of electronic trading generally. Because there is not much history of using technology for trading, it is easy for firms to adopt algorithmic trading technology without interfering with legacy systems. That combination of circumstances means it is a fairly hot market for us at the moment.”
This week, Apama announced that Ágora Corretora, a subsidiary of Banco Bradesco, had chosen Apama’s complex event processing (CEP) platform to support algorithmic trading in its equities operation.
The broker will initially use the Apama CEP platform to develop proprietary trading strategies for use on Brazil’s BM&F Bovespa exchange and will later grant access to its buy-side clients. As such, Ágora Corretora will become the first Brazilian broker to allow its clients to create, execute and monitor customised trading strategies. While there is no firm schedule for buy-side access, Nelson said it could be implemented within three to six months.
A big driver for the growing demand for trading algorithms, according to Nelson, is increasing global interest in investing in Brazilian stocks. “Individuals and asset management firms want to invest in Brazilian securities and a proportion of those want to trade using algorithms,” he said.
Unlike some emerging markets, which suffer from wide bid-ask spreads and slow matching technology on stock exchanges, Brazil’s market infrastructure is conducive to algorithmic trading, Nelson contended. “It is a sophisticated market where spreads have come down significantly and where exchanges have invested a fair amount in technology recently,” he said.
Nelson said Apama has signed up more firms in Brazil and elsewhere in the region. “We have a pipeline of activity,” he said.