EM: Bovespa Eyes Other BRIC Markets


By Anita Hawser

As the world’s key stock exchanges engage in a flurry of mergers aimed at cutting costs and boosting efficiency, Brazil’s BM&F; Bovespa—the fourth largest exchange operator in the world—is looking to spread its wings beyond its domestic shores.

Atop the list of markets into which the exchange would like to break are China and India. China is particularly attractive to the Brazilian exchange as an increasing amount of trade is flowing between Brazil and China. InFebruary, BM&F; Bovespa’s CEO, Edemir Pinto, told news agency Reuters that China and India were of interest because of their growth potential and product similarities. Also in February, Bovespa announced it would sign a memorandum of understanding with the Shanghai Stock Exchange to pursue discussions regarding business opportunities and information exchange. However, the agreement did not provide for cross-listing companies’ stocks on the two exchanges.

Rumors have also emerged about merger discussions between BM&F; Bovespa and the Chicago Mercantile Exchange (CME). The two exchanges already enjoy a global partnership, and Pinto says there is room for the relationship with CME to grow—although he publicly denies the reports of merger discussions. BM&F; Bovespa also has agreements with exchanges in Santiago and Hong Kong.

Last year the Brazilian exchange operator saw record volumes traded across both the BM&F; and Bovespa market segments and record gross proceeds from equity offerings.