As part of its plans to attract further investment to its market, Argentina’s Rosario Futures Exchange (ROFEX) has joined trading technology provider SunGard’s Global Network (SGN), enhancing its connectivity, order routing and market data capabilities.
According to SunGard, the implementation of SGN will help increase efficiencies and reduce errors for traders on ROFEX by helping them trade electronically, increasing automation across the trade lifecycle.
“SunGard is very important to us, as our agreement with them gives us global distribution,” said ROFEX CEO DiegoFernandez. “This will allow foreign investors to route directly to ROFEX via SunGard’s network.”
For example, explained Fernandez, the average price for dollar futures contracts currently traded in Argentina compared to those traded on over-the-counter markets in the US are between 8–9%, creating a highly lucrative arbitrage opportunity that could be exploited by foreign investors.
Since 2010, says Fernandez, dollar futures have provided the best volumes of any contract in Argentina, with average daily volumes of US$300 million. In September this year, ROFEX achieved a new peak with 6,992,155 contracts in its financial division, exceeding the previous record of August 2010.
“SunGard can help encourage international investors to pay attention to the opportunities that are opening up in Argentina,” said Philippe Carré, global head of connectivity at SunGard. “Already we have seen significant interest in the Latin American markets, and we believe that our connectivity to ROFEX can add real value to both domestic and international market participants.”
In a further possible move to increase its international heft, ROFEX has said it would consider embracing a closer partnership with the Rosario Stock Exchange to form a multi-asset class market. While there have been no formal talks, Fernandez said he would welcome discussions.
“The combination of the equities and derivatives bourses in Brazil strengthened both entities and helped put Brazil on the map as far as international investors are concerned,” Fernandez told theTRADEnews.com. “We believe that by combining with the Rosario Stock Exchange we could emulate Brazil’s success and forge a much stronger international identity.” It would also place the country in a more beneficial position to join MILA, the market integration project between the stock exchanges in Colombia, Chile and Peru, Fernandez added.
Combined, the exchanges involved in MILA have a market capitalisation of around US$600 billion, offering smaller economies in Latin America the opportunity to create a credible investment alternative to Brazil.
A merger between ROFEX and the Rosario Stock Exchange would also help encourage greater competition in Argentina with the Buenos Aires Stock Exchange, the country’s largest bourse.