Monday, 12 January 2009

Clearinghouses Volumes To Fall, S&P Says. What Does This Mean For BM&FBovespa?

Standard and Poor's said in a report released Jan. 9 that the global exchange and clearinghouse industry will experience a downturn in volumes and transactional revenues this year. Nothing surprising. The companies were becoming accustomed to increasing trading, clearing, and settlement volumes. For some institutions, such as BM&FBovespa, this could be the first down year since they became public companies.

There will be fewer IPOs and bond sales this year, and the most likely scenario in the derivatives markets is that trading may decrease. Last month, the company reported that equities and fixed-income markets traded 71.70 billion reais in November (a total of 5.54 million trades,) compared with 122.54 billion reais traded in October (a total of 5.54 million transactions.) The drop was .. eehhmm, 41 percent! Companies listed in the exchange lost 20 billion reais worth of market value in the same period.

The bad news don't stop there: Trading of interest-rate futures contracts totaled 6.92 million contracts, down by about half from the 13.77 million traded in October. Currency futures traded 4.95 million contracts, compared to 8.09 million in the previous month. Ibovespa futures traded 1.4 million contracts, compared to 2.29 million in the same period. Investors do not seem that confident on the BM&FBovespa story. Check the price graph (obtained from Yahoo!Finance).


  1. Did I see that right? The value of trades went down 41 percent but the number of trades remained the same? Seems to say that traders trade no matter what is happening and the decline in the value of assets (as recorded by trading) has had NO impact on the level of trading. Seems to show that gambiling levels remain the same, no matter what the losses. Now that's scary.

  2. Value is falling, and therefore commissions should be falling. revenue down. I will try to update this one ... the thing is, take a look at third paragraph and see the numbers ... bad.