FiNETIK – Asia and Latin America – Market News Network

Asia and Latin America News Network focusing on Financial Markets, Energy, Environment, Commodity and Risk, Trading and Data Management

VAM: Vietnam Market Analysis – January 2013

All indices recorded strong gains in January as investors’ sentiment improved
The VN-Index surged 15.5% to close at 479.8 while the HNX jumped 9.7% to 62.62. The VN30, after reaching its all time high at 577, eased back to 564.01 at the end of the month, gaining 16%.
 
Timely measures to give market a boost
With effect from15th January 2013, the trading band on HSX and HNX have been loosened to 7% and 10%, from 5% and 7%, respectively. Besides, SSC also introduced other measures to support the stock market such as tax incentives, allowing to issue stocks below par value, increasing margin ratio and most importantly, increasing foreign ownership limit by non-voting rights in some selective industries (namely at weak banks to over 30%, and at securities companies to 100%).
Furthermore, SBV also intends to participate in domestic gold trading to stabilize domestic gold price, closing the gap with global price, thus discouraging people from holding too much gold. Those measures to boost the stock market, especially the possibility on increasing foreign ownership and the proposal to tighten gold control have somewhat created the wave of optimistic buying in January.
 
A wave of Japanese FDI and record remittances to welcome Tet
According to the Ministry of Planning and Investment, FDI disbursement in January reached USD420mn in total, up 5% YoY. Total newly registered and top-up capital grew 74% YoY, of which newly approved projects registered USD257mn, a 293% YoY increase, and top-up capital touched USD24.3mn, rising 25.2% YoY. Japanese became the biggest investor making up 57.6% total newly approved projects so far this year.
Thanks to the surge before Tet holiday, total remittances this year are estimated at a record USD10 billion. The total foreign reserve has increased to USD26bn, equivalent to 2.3 months of imports, a historical high and an 8.3% increase from USD24bn as at the end of 2012. The healthier FX reserve helps to safeguard the value of the Dong.
 
Tet, on the other hand, narrows trade surplus
Januaryrecorded a smaller trade surplus as demand for imports increased before Tet holiday. Exports exceeded imports by only USD200 million in January, after a revised trade surplus of USD498 million in December. From the previous month, export value decreased 2.5% while the import value edged up about 0.4%, although both of them showed huge improvement, more than 40%, compared to the same period last year. Foreign invested enterprises continue to be the leading sector with 66% and 55% of total export and import value, respectively. They also outperform domestic sector in terms of more import growth and less export reduction during the first month of 2013.
 
Credit drop and CPI jump surprise market.
The industrial production index (IIP) decreased 3.2% from December amid pessimistic outlook for stagnation on retail sales. Indeed, consumers continued to reduce spending at the prospect of lower income and no year-end bonus. The retail sales edged up just 2.2% MoM in Jan, the month before a long Tet holiday. As a result, credit dropped 1.06% YTD, according to the press release from a government meeting.
In contrast, January’s PMI moved in a different direction with the IIP since it increased to 50.1 from 49.3, thanks to modest improvement in new order volumes from domestic market and marginal job growth. Amidst stagnation of industrial production and credit growth, a solid increase in average input prices, a component of PMI basket, after a marginal reduction in December, suggests that SBV should be more cautious about further easing as inflation risk came back from the beginning of a new year. Jumps in health care (9.5% MoM) and foodstuff (1.96% MoM) items led CPI to soar 1.25% MoM (7.07% YoY) in January, exceeding market expectation. Accordingly, inflation risk puts any rate cut rumors on hold until at least after Tet holiday.
 
Government charts out tasks for banking sector with focuses on inflation control and bad debt resolution
Main objectives of SBV in 2013 continue to be curbing inflation, stabilizing macro economy alongside with restructuring banking sector and tackling NPL issues. For 2013, the SBV targets to keep credit growth at 12%. Importantly, SBV has submitted to government the plan that allows AMC to purchase bad debts based on book value (after provision) and pay by bonds to the bank. Banks could use AMC bonds as collateral to get cheap fund from SBV at a discount rate. Commercial banks with NPLs higher than 3% will be forced to bring down their NPLs to 3%.
On the other hand, as there are many linkages between real estate market and NPL problems in banking system, government also issued the Resolution No.2, which introduces several tax incentives, credit line for low income individuals to purchase social houses and transferring commercial housing projects into social housing. However since social housing only accounts for a small portion of property sector, we think these solutions are not effective enough to rescue the whole troubled real estate market.
 
Our ViewBullish momentum remained in the first month of 2013 thanks to good round of macroeconomic indicators release. While capital inflow continued being positive, actions of authorities looked effective in boosting the market. However, as stocks ran too high and too fast during the last two months, we start to be skeptical about the strength of this momentum. A month before Tet, inflation risk seems to be coming back and industrial stagnation looks a bit tense. We maintain a cautiously optimistic view and relatively high equity holding, particularly stocks with strong fundamentals in consumers, pharmaceuticals and materials sectors. As Government is showing more and more determination to improve the economy and clean up the banking sector, stickers with strong cash flow, low debt and high beta are also in our consideration to pick up to ride the market’s uptrend.
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Filed under: Exchanges, News, Vietnam, Wealth Management, , , , , , , , , , ,

ICE gets green light for Brazilian fixed income trading platform

IntercontinentalExchange (NYSE: ICE), a leading operator of global markets and clearing houses, and Cetip S.A., Latin America’s largest private fixed income depository, announced that the jointly developed fixed income trading platform Cetip | Trader is expected to launch on February 25, 2013.

This follows a successful beta test that started in August and final regulatory approval from the Brazilian securities regulator Comissao de Valores Mobiliarios (CVM) today.

“This platform reinforces Cetip’s commitment to develop an efficient and transparent secondary market, respecting and improving the practices of our local over-the-counter market,” said Cetip Managing Director Carlos Ratto.

Cetip | Trader offers market participants access to voice confirmation, electronic trading and historical data in a single platform. Over the past few months, it has been thoroughly tested in a simulated trading environment with approximately 80 institutions entering more than 100,000 mock trades. While the platform was initially developed for corporate and government bonds, its flexible architecture is adaptable for new products as driven by market demand.

“We are providing an innovative solution that brings the front office a more dynamic and intuitive language,” said Cetip Trading Solutions Manager Ricardo Vit. “Cetip | Trader is a flexible and simple tool that will help keep our customers ahead of the curve.”

“ICE was pleased to work with Cetip to build a product that is customized for the Brazilian market, available in Portuguese, and that provides a complete trading solution to the market for corporate and government bonds,” said ICE Senior Vice President and Chief Strategic Officer Dave Goone.

ICE Link, ICE’s post-trade processing service, will also be available to Cetip | Trader customers beginning February 25. ICE Link has developed straight-through-processing workflows customized for the Brazilian bond market. These workflows enable middle and back office operations to more efficiently and effectively allocate trades and submit them to Cetip for registration.

Said Vit, “In addition to easier access to liquidity and execution, the complete solution also aims for better operational risk mitigation and total cost reduction on the life of a trade. ICE Link allows standardization in the trade workflow and better data integrations with counterparties and internal systems. This provides market participants a level of automation never before experienced in the Brazilian over-the-counter market.”

Source:  IntercontinentalExchange, 08.02.2013

Filed under: Brazil, Exchanges, Latin America, Trading Technology, , , , , , ,

Peru: LSE signs Bolsa de Valores de Lima to MillenniumIT tech

London Stock Exchange Group today announced that it has entered into a technology partnership with Bolsa de Valores de Lima.

MillenniumIT, a wholly-owned subsidiary of London Stock Exchange Group will provide state of the art trading and Smart Order Routing technology to Peru’s markets via its ultra low latency, highly scalable trading platform, Millennium Exchange and Millennium SOR.

Tony Weeresinghe, Director of Global Development at London Stock Exchange Group and CEO of MillenniumIT, said: “This is a significant achievement for us. Peru is one of Latin America’s fastest growing economies, and there is need for efficient, reliable capital markets infrastructure as business and investment continues to develop there. We look forward to building on this partnership, and playing our part in the next stage of Bolsa de Valores de Lima’s development.”

Francis Stenning, CEO at Bolsa de Valores de Lima, said: “We are very conscious of the relevance of technology in our business. That is why we believe this upgrade in our electronic trading platform and order routing system will take us to the forefront of technology. It will allow Bolsa de Valores de Lima to keep up with the growing Peruvian economy, provide new services to the local market and increase its efficiency. This will allow us to benefit from better tools and a strategic alliance with one of the most developed stock exchanges in the world, London Stock Exchange Group, and to take advantage of more globally interconnected markets, including MILA.”

Source: Finextra, 18.01.2013

Filed under: Exchanges, Latin America, Peru, Trading Technology, , , , , ,

VAM: Vietnam Market Analysis – December 2012

Improved economic conditions somewhat buoyed the stock market in the last month of the year as all three indices moved up
The VN-index closed at 413.7, gaining 11.23% while VN30 closed at 485.4, picking up 9.42%. HNX was the best performer of three indices, increasing 11.83% to close the month at 57.09.
 
Macro indicators showed joyful December
Market confidence was regained thanks to better-than-expected CPI, trade balance, interest rates cut and detail implementation of the Government on spurring the economy. For the first time in four months CPI slowed in December, with consumer prices rising 6.81% from a year earlier after climbing 7.08% Y-o-Y in November. Consequently, the State Bank cut benchmark interest rates for a sixth time to help companies cope with difficulties in production and business. The trade balance posted a first year of surplus (of US$284mn) since 1993. Despite a gloomy year, FDI disbursement reached USD10.5bn, dropping a marginal 5% YoY. As a result, foreign reserves are significantly improved, reaching US$24 billion, equivalent to 12 weeks of import. The Dong remains unchanged.
 
However, stability was achieved at the cost of growth
Vietnam’s economy expanded at the slowest pace in 13 years in 2012 as a slump in bank lending dampened domestic demand. GDP grew 5.03%, down from 5.89% in 2011, and the lowest since 1999. Bad debt and the gloomy business environment hampered credit growth, which ended 2012 at 6.45% YoY while total liquidity growth and deposit growth were 19.85% and 20.29% YoY, respectively.As the lenders’ liquidity position becomes comfortable and full-year inflation was a lower-than-expected 6.81%, the central bank decided to cut all policy rates and deposit cap rate by 1%, effective on December 24, in an attempt to make banks lend more. But as the real interest rate is still positive, some are speculating on another rate cut, even as the World Bank warned against easing too soon.
On the other front, the HSBC’s Vietnam PMI index fell back to deterioration in December, down to 49.3 from 50.5 last month, as a result of reduction in order inflows, disinvestment of inventory holdings and stagnating production volumes.
 
Government details its determination to spur the economy
To spur the economy and resolve the financial system, the Government started implementing a detailed action plan. Businesses may enjoy lower corporate income tax rate in 2013, i.e. 23% for large enterprises and 20% for SMEs (down from 25% earlier); real estate will receive more support based on a newly approved proposal by MoF, which includes a 50% VAT reduction, 2-year extension on the deadline of land use fees payment and the establishment of AMC aiming to solve rising NPLs. Moreover, USD300mn from Asian Development Bank in a 25-year loan package will help to restructure SOEs in 2013.
 
Authority changes rules to push the capital market
On the capital market, SSC submitted its proposal in support of the stock market to the Ministry, in which key measures might include tax incentives, allowing to issue stocks below par, increasing margin ratio and trading band and most importantly, increasing foreign ownership limit. Otherwise, SBV governor also announced that they are working on revising the Decree 69/2007, wherein special cases, i.e for restructuring commercial banks, the foreign ownership ratio might be allowed to exceed 30%. Since 10th January, the number of gold bar shops will decline from 8,000 to 2,400 including around 900 in Ho Chi Minh City and 400 in Hanoi, after SBV completes the licensing procedures. 
 
Our ViewOn the background of good macro economic indicators coming out in December and improved investor sentiments after seeing the Government’s determination to spur the economy being detailed into action plans, the stock market had a good run in the last month of 2012. We are cautiously optimistic and have started to mobilize cash into Vietnam Dong to be ready for deployment toward increasing equity level for the Fund. We are keen to buy stocks of strong companies with sound cash flow and healthy balance sheets in fundamental industries such as consumers and materials.

Filed under: Banking, Exchanges, News, Risk Management, Services, Vietnam, Wealth Management, , , , , , , , , , , ,

ICE to acquire NYSE Euronext for 8.2 billion USD – Back Ground and Analysis

The overall mix of the $8.2 billion of merger consideration being paid by ICE is approximately 67% shares and 33% cash. The transaction value of $33.12 represents a 37.7% premium over NYSE Euronext’s closing share price on Wednesday.  The transaction is expected to close in the second half of 2013, subject to regulatory approvals.

Investors see plenty of upsides in a takeover by ICE, which would create a powerhouse in cross-asset trading and reduce Nyse Euronext’s reliance on stagnating, hyper-competitive equity markets. Nyse’s share of trading on stocks listed on the Big Board has shrunk from 82% to just 21% in a fiercely competitive market.  For ICE, a tie-up with Nyse Euronext will give the energy trading bourse a leg-up into the expanding market for over-the-counter derivatives contracts and the geographical outreach to take on the Chicago Mercantile Exchange.

The two companies have already inked an agreement for Nyse Liffe to move its clearing operations to ICE Clear Europe. The implications of the deal for Nyse Liffe’s plans to move its clearing from LCH.Clearnet to a newly-constructed inhouse CCP by June 2013 have not been spelled out.

The combined company is expected to save up to $450 million through cost synergies in the second full year post closing. ICE has successfully integrated more than a dozen acquisitions in the last decade.  An earlier bid by ICE to take over Nyse Euronext in tandem with Nasdaq OMX was nixed by the US Justice Department on anti-competitive grounds. Observers see no similar objections being raised to a straight merger, with Nasdaq OMX removed from the equation. FinExtra 20.12.2012

NYSE and ICE: Not So Nice for European Equities

Given the sweeping changes hitting exchanges on the back of growing regulation and falling equity volumes in Europe, the combined entity would increase its chance of success, dominating European energy, commodity and short-dated fixed income trading, as well as OTC credit clearing; and leap-frogging Deutsche Boerse to become the world’s third-largest exchange group, with a combined market value of $15.2 billion.

However, not all divisions would benefit. Whilst a tie up with ICE would enable London-based Liffe to compete more effectively with CME Group in both trading and clearing of OTC products, for Euronext the future looks less certain. According to NYSE’s investor presentation explaining the deal, ICE “intends to explore an IPO of Euronext if market conditions allow and if European policy makers are supportive.” See full article at TABB Forum 20.12.2012.

ICE and NYSE Euronext Enter Clearing Services Agreement; ICE Clear Europe to Clear NYSE Liffe’s Derivatives Markets

ICE and NYSE Euronext agree that their wholly owned subsidiaries, ICE Clear Europe Limited and LIFFE Administration and Management have entered into a clearing services agreement pursuant to which ICE Clear Europe will provide clearing services to the London market of NYSE Liffe (“NYSE Liffe”). The clearing services agreement will allow NYSE Liffe to transition seamlessly from their current clearing arrangements. See full article at Bob´s Guide 20.12.2012

Inside ICE takeover of NYSE Euronext ( Tabb Forum Video Interview)

Exchange Consolidation: Getting Over Merger Mania

At this time last year, NYSE Euronext and Deutsche Bourse were more than midway through a year-long merger push that would have resulted in an exchange operator with an estimated $16 billion in combined market capital and a near monopoly on the European exchange-traded derivatives business. Consolidation, it seemed, was the key to competing in the global exchange landscape.

But dreams of consolidation, synergies and economies of scale were quickly dashed. The two biggest cross-border exchange deals — NYSE/DB merger and the proposed merger of the Singapore Exchange (SGX) and the Australian Securities Exchange (ASX) — were blocked by regulators, and the LSE’s attempt to buy the Toronto Stock Exchange (TMX), which also failed initially due to reluctant regulators, eventually lost out to a domestic bid from Maple Group Acquisition Corp. earlier this year. see full article at TABB Forum 12.12.2012.

Filed under: Exchanges, News, , , , , , , ,

Nyse Technologies expands SFTI network in Asia

Nyse Technologies, the commercial technology division of Nyse Euronext, today announced the continuing expansion of its Secure Financial Transaction Infrastructure (SFTI) in Asia with the introduction of two access centres located in Hong Kong.

Customers now, for the first time, have direct access to the SFTI network, allowing them to connect from Hong Kong to services offered by NYSE Technologies through SFTI, including access to Hong Kong Exchanges & Clearing (HKEx), all major international trading venues, market data solutions, plus the NYSE Euronext capital markets community.

As part of the expansion of the SFTI network to include Hong Kong, NYSE has also extended SFTI to the new HKEx Data Centre colocation facility, giving customers there access to all the services available on SFTI through a simple cross connect to their colo racks. NYSE Technologies also plans to expand SFTI in the region to connect other markets like Australia and Korea.

NYSE Technologies’ Secure Financial Transaction Infrastructure provides access to a comprehensive range of capital markets products through a single point of access and offers low-latency trading access to the NYSE Liffe and NYSE Euronext markets. SFTI Asia is the most recent extension of the global backbone, enabling Asian firms to receive market data and trade on multiple markets. Designed to be the industry’s most secure and resilient network, SFTI is specifically built for electronic trading and market data traffic thus enabling firms to reduce their time-to-market, improve their performance and significantly lower the cost of their trading infrastructure. Furthermore, the global backbone allows customers to connect to their trading infrastructure distributed in financial centres around the world using a SFTI connection on the other side of the world.

“The addition of these important access centres in Hong Kong is a further step in the expansion of NYSE Technologies’ footprint and reach of the SFTI Asia network and adds to our established presence in Singapore and Tokyo.” Daniel Burgin, Head of Asia Pacific, NYSE Technologies, commented. “Offering multiple access centres in the Asia Pacific region allows them to use SFTI Asia to connect to regional and global exchanges and markets in a cost effective way through a single connection at each of the client’s locations around the region. This eliminates the overheads and costs associated with maintaining separate network connections in each location to multiple trading venues.”

Source: NYSE Technology 06.12.2012

Filed under: Australia, China, Data Management, Data Vendor, Exchanges, Hong Kong, Japan, Korea, Market Data, News, Singapore, , , , , , , , , , , , , ,

HKEx completes LME acquisition

Hong Kong Exchanges and Clearing Limited (HKEx) and LME Holdings Limited (LME Holdings), the parent company of The London Metal Exchange Limited (LME), are pleased to announce that the acquisition of the entire issued ordinary share capital of LME Holdings by HKEx has completed today.

Completion was effected by the delivery of the relevant court orders to the Registrar of Companies for England and Wales.

The transaction brings together the leading operator of exchanges and clearing houses in Asia, with the world’s leading non-ferrous base metals trading venue.

Charles Li, Chief Executive of HKEx said, “We are delighted that, as of today, the LME is formally part of the HKEx group. We are confident that this partnership will deliver enormous benefits over time as we leverage our relationships and knowledge to build on LME’s strong global position.”

Martin Abbott, Chief Executive of the LME said, “The LME will remain the world’s foremost base metals exchange thanks to HKEx’s position in Asia, its infrastructure and resources. We begin a new chapter today but the LME is more secure than at any point in its 135-year history.”

Source: Finextra, 06.12.2012

Filed under: Exchanges, Hong Kong, Services, , , , , , , ,

Brazil:Revenue and income on the up at BM&FBovespa

BM&FBOVESPA S.A. (BVMF3) today reported third quarter earnings ending September 30, 2012. The Bovespa segment recorded its second strongest performance to-date.

This performance together with higher Rate per Contract (RPC) for derivatives and growth in non- trading and settlement segments delivered solid revenue increase. Also, expense control in the quarter contributed to improve operating performance.

3Q12 gross revenues reached R$581.3 million, up 6.2% over 3Q11, reflecting growth across all segments;
Adjusted expenses[1] were R$136.0 million, roughly flat compared to 3Q11. Adjusted expenses rose by 6.4% over the previous quarter in line with the Company’s budget for the year;
Operating income reached R$346.8 million, up 7.0% over 3Q11 and operating margin increased by 84 bps;
EBITDA grew 8.1% and EBITDA margin increased by 162 bps compared to 3Q11;
Adjusted net income[2] totaled R$400.6 million, increasing by 0.3% over 3Q11 as operating income growth was offset by a reduction in financial income and higher non-cash taxes;
Adjusted earnings per share rose 1.7%, to R$0.21;
Average Daily Trading Value (ADTV) for the Bovespa segment reached an all-time-high of R$8.4 billion in September 2012;
ADTV of Exchange Traded Funds (ETFs) was up 90.2% year-over-year. Average assets under custody of Tesouro Direto rose by 45.6%;
Average RPC in the BM&F Segment increased 14.7% year-over-year, offsetting the 4.0% reduction in the Average Daily Volume (ADV) for the segment;
R$221.2 million in dividends and interest on capital, comprising 80% of 3Q12 GAAP net income.

“We maintained focus on delivering our strategy to grow and diversify revenues and drive operational excellence,” said BM&FBOVESPA Chief Executive Officer Edemir Pinto. “We are also making significant advances in building state-of-the-art technological capabilities which will place our trading technology and capacity at the forefront of global best practices.”
“In this way, we are ready to capture and optimize the opportunities presented by Brazilian capital markets and this new era of low interest rates. We are making infrastructure investments, focusing on market integrity, developing markets and products, and strengthening relationships with market participants” Mr. Pinto added.

Chief Financial, Corporate Affairs and Investor Relations Officer, Eduardo Refinetti Guardia, said: “BM&FBOVESPA achieved solid results and strong operating leverage in the third quarter, consistently expanding margins and cash generation.”

Filed under: BM&FBOVESPA, Brazil, Exchanges, , , , , ,

ATG taps Nyse Technologies for ATS Brasil

Americas Trading Group (ATG) today announced the formation of a new company that will develop a liquidity center targeting the Brazilian exchange market called Americas Trading System Brasil or ATS Brasil.

Utilizing trading solutions developed by NYSE Technologies, the technology unit of NYSE Euronext, ATS Brasil will offer customers a new equities matching platform in Latin America.

ATG will maintain the controlling interest as well as operational management of the company with NYSE Technologies as a minority shareholder and the core technology provider. ATS Brasil plans to begin operations in 2013, subject to approvals by the Central Bank of Brazil and the Brazilian Securities Commission (CVM).

Fernando Cohen, ATG´s President, believes that the entry of ATS Brasil will have a positive effect on the local stock market as it will contribute to expanding the range of products and services offered to investors in the region. Cohen also emphasized the importance of NYSE Technologies’ decision to expand into the Brazilian market by becoming a partner of ATS Brasil.

Cohen stated that initially ATS Brasil intends to operate in a model known as “the organized OTC market” based on computerization and transparency in order registration and execution, and adopt rigid mechanisms of self-regulation. He further noted that ATS Brasil was not created to compete with BM&FBovespa, but rather to complement it by improving liquidity and price formation for Brazilian assets.

“The entry of ATS Brasil starts a new cycle in the Brazilian exchange market. Our innovative, high-performance order execution platform will generate more liquidity for the capital markets. This initiative should stimulate cost reduction by offering efficiency gains for investors and create the real possibility of placing the Brazilian market within international standards,” said Fernando Cohen.

Dominique Cerruti, President and Deputy CEO, NYSE Euronext said, “As a leading operator of global markets and market technology, we have designed and deployed proven, market-tested trading platforms in key market centers around the world. We are pleased to partner with ATG ith ATG as they expand their business into equities matching with the ATS Brasil initiative. Our technology platform should provide customers and market participants with the same high-quality trading experience, performance and reliability that they’ve come to expect from NYSE Euronext’s own exchanges.”

ATS Brasil will use the Universal Trading Platform (UTP) developed by NYSE Technologies and used by NYSE Euronext’s global markets. UTP has the capacity to process high volumes of messages with very low latency, giving market participants the opportunity to submit thousands of orders per second while also improving market transparency and liquidity. Additionally, ATS Brasil is expected to attract new investors to the Brazilian market, including local and international high frequency traders. ATG will also utilize NYSE Technologies’ Secure Financial Transaction Infrastructure (SFTI) network to provide global access and direct market data distribution for customers trading outside Brazil. 

Source: FinExtra , 06.11.2012

Filed under: BM&FBOVESPA, Brazil, Exchanges, Latin America, Market Data, Mexico, Trading Technology, , , , , , , , , , ,

Cemex aims for $950m Latin American float in Colombia

Cemex, the Mexican cement producer, hopes to raise up to $950m from the partial sale of its Latin American subsidiary, people familiar with the deal told the Financial Times on Monday.

The company has set a price range of 11,000-13,500 Colombian pesos a share for the sale of about 24 per cent, or 126.6m shares, in Cemex Latam Holdings, Cemex’s Central and South American unit, in a forthcoming initial public offering on the Colombian stock exchange.

 
FT related CEMEX news:
The IPO of Cemex Latam, which includes Brazil, Colombia, Costa Rica, El Salvador, Guatemala, Nicaragua and Panama, is part of the company’s ongoing efforts to pay down its high debt. As of end of September, gross debt, which includes perpetual notes, stood at $17.7bn.

The planned IPO follows a recent refinancing agreement for about $7bn in loans, which extends maturities by three years from 2014 to 2017. At the time, analysts welcomed the agreement, saying that it bought the company valuable time to allow global cement markets to recover.

“The refinancing lays to rest any residual concerns about the company’s solvency,” one analyst who asked not to be named, told the FT recently.

That, coupled with positive results during the third quarter – Cemex said that earnings before interest, taxes, depreciation and amortisation (ebitda) between July and the end of September grew 9 per cent compared with last year to reach $730m, the highest ebitda generation in three years – has fuelled a rally in the company’s share price this year.

For years, Cemex was considered one of the most successful “multilatinas” as Latin American multinationals are known, as it embarked on a 20-year acquisition spree that turned it into the world’s third-largest cement producer by volume.

But the Monterrey-based company came unstuck following its purchase of Rinker, the Australian building-materials supplier, for $15.3bn – an acquisition it financed with short-term loans and that came on the cusp of the US housing crash.

Source: Financial Times, 22.10.2012

Filed under: Colombia, Exchanges, Mexico, News, , , , , , , ,

Alternative Latin Investor: Wealth Management Issue 18

The Alternative Latin Investor Issue #18 is focusing on Wealth Management in Latin America.

Special Issue: Wealth Management

The World’s First Diamond Fund
Lack of Transparency in Colombia: Root Causes
LatAm Wealth Management Overview
Private Aviation Takes Off in Latin America
High-Tech Financial Technology Hits LatAm

…and much more. Regulations,  Tax & Money Laundering, Structured Finance, Political Risks,  Agri Business, Impact Investment, Wine Investment, Infrastructure, Art

Please view and access Issue 18  in the following formats

Virtual Viewer http://www.alternativelatininvestor.com/Issue18-Preview.htm

For more details and information please view http://www.alternativelatininvestor.com

Source: AlternativeLatinInvestor 18.10.2012

Filed under: Argentina, Banking, BM&FBOVESPA, Brazil, Chile, Colombia, Energy & Environment, Islamic Finance, Mexico, News, Services, Trading Technology, Wealth Management, , , , , , , , , , , , , , , , , ,

Nyse Technologies, Bolsa Mexicana and ATG build Mexican trading infrastructure

Nyse Technologies, the commercial technology division of Nyse Euronext (NYX: NYX) today announced that in collaboration with Bolsa Mexicana de Valores (BMV) and Americas Trading Group (ATG) it has built and deployed a state-of-the-art trading infrastructure complete with global connectivity, risk management functionality and direct market data distribution for customers trading in Mexican markets.

Designed to support the launch of Bolsa Mexicana’s new matching engine and midpoint hidden order book, this solution incorporates advanced technology developed specifically for every part of the trade cycle to provide unprecedented accessibility, performance and risk management for trading on Bolsa Mexicana’s exchanges with the aim of establishing Mexico as a premier Latin American investment destination.

Initially, this collaboration will provide:
• A new co-location model for access to cash and derivatives markets (through ATG directly at the KIO Data Center)
• Global connectivity for buy side, sell side and vendors from the US, Europe, Asia and also other Latin American markets such as Brazil and Chile.
• Sophisticated risk management functionality for international order routing (solution implemented by NYSE Technologies)
• Low touch order stamping by Bolsa Mexicana’s members to settle orders
• Global Market Data distribution via NYSE Technologies Secure Financial Transaction Infrastructure (SFTI) with direct contracting with BMV

“We are excited to again work with one of Latin America’s leading market operators in Bolsa Mexicana and market participants in ATG to deliver dramatic improvements across critical elements of the trade cycle,” said Dominique Cerruti, NYSE Technologies. “By continuing to improve access to key Latin American exchanges and customers, we continue to realize our vision of creating a global capital markets community with cutting-edge connectivity, performance and risk management.”

“Today’s announcement with NYSE Technologies and ATG demonstrates our ongoing commitment to grow and enhance our markets in Mexico to deliver highly flexible multi-market, multi-asset trading,” said Jorge Alegria, Head of Market Operations, Bolsa Mexicana de Valores. “We look forward to extending our relationship and cooperation with NYSE Technologies in several important areas that will f further expand that growth and performance in the near future.”

Source: FinExtra, 18.10.2012

Filed under: Asia, BMV - Mexico, Chile, Colombia, Data Management, Data Vendor, Latin America, Market Data, Mexico, Risk Management, Trading Technology, , , , , , , , , , , , , , ,

VAM: Vietnam Market Analysis – September 2012

Markets declined in September
September was characterized by sideways market movements for the VN-Index, with the largest gap between the month’s high and low being approximately only 15 points. Closing the month at 392.57, the index gave up 0.87% for the month. The Hanoi exchange moved quite differently – a near downward trajectory to close the month at 55.47, down 9.7%. The VN30’s performance more closely resembled the VN-Index, with only narrow swings during the month, to close at 456.48, down 1.89% from August.
 
Market reacted to ACB resignations as developments troubled investors
In an unexpected announcement, ACB accepted the resignation of its BOD Chairman and two Vice Chairmen, this month. The resignations were initially claimed to be for personal and health reasons, yet were later announced to be connected to the arrest of ACB’s founder and the former CEO for economic violations (one of which being permission granted for approximately USD 34million to be deposited into competing banks at rates above the stipulated cap). A former BOD member of ACB, now on the Board of Eximbank, also resigned and is also to be prosecuted together with all the resigned ACB executives. Upon the dissemination of this information, the markets dropped, however only temporarily, as the news was widely expected.
 
Credit mobilization vastly exceeds credit growth
Credit growth from January to September 20, of this year, reached only 2.53%, much below the 8-10% target for 2012. While some banks have posted relatively high growth figures, such as BIDV and Military Commercial Jt Stock Bank, whose growth reached 13.5% and 10% respectively in the first 8 months; most of their credit growth however was for commercial bond lending. Removing commercial bond lending, loans outstanding to institutions and individuals decreased. In another example, VCB grew their credit 7.2% in the first 8 months, however savings growth was 13%. In efforts to ensure liquidity and being bound by the 9% deposit rate cap, many banks have begun to offer 13% interest for 13-month deposit terms. With dong lending rates now ranging between 13-15%, profits will come under pressure.
 
Health care and Education lead September’s CPI increase
In August, YoY inflation continued to abate to 5.04%, this month however, inflation rose to 6.48% YoY. September’s CPI rose 2.2% MoM, the highest MoM increase since May 2011. The increase is largely due to Healthcare, pharmaceutical items (17.02% increase), Education items (10.54% increase), and Transport and Telecoms (3.83%) increases. While Education’s increase was mostly due to seasonal factors, a series of rising petroleum prices played a notable role in the increase of one-off items.
 
GDP in first 9 months grew 4.73% over same period 2011
2012’s GDP growth is now expected to be 5.2%, thus requiring Q4 growth rate of 6.6%  fairly optimistic as Q3 growth was 5.35% and Q4, 2011 growth reached only 5.98%. GDP has however, been steadily improving from Q1 and Q2. Low credit growth, declining exports and slow retail sales, combine to make up slow domestic growth. Export value declined an estimated 5.8% in September, according to GSO; however, import value also dropped 4.4%, bringing the Q3 trade balance to a USD 531 million surplus. Retail revenue growth in September increased 1.08% for the month, improved over the 0.7% growth recorded in August.  For the first 9 months of 2012, nominal retail sales growth was 17% however; it reached only 6.4% in real terms. The Index of Industrial production also showed some signs of improvement, increasing 4.5% on month with increases in the manufacturing index being the largest contributor to the improved index.
   
FDI disbursement level paces 2011’s levels
Vietnam attracted approximately 73% of 2011’s January – September FDI, for a total of USD 9.52 billion. While overall attraction had declined, FDI disbursed reached USD8.1 billion, totaling 98.8% of YoY’s disbursed FDI. The Foreign Investment Agency expects disbursed FDI to reach USD 10 billion by year-end. Strong FDI disbursements have bolstered the FX reserves nearly USD 23 billion and contributed to S&P’s upgraded economic outlook and Fitch Rating’s affirmed B+ status of the dong.
 
Moody’s adjust government bond rating on banking sector weakness
At nearly the month’s end, Moody’s Investors Service downgraded Vietnam’s credit rating one notch to B2, with a stable outlook. At cause for the downgrade are the country’s banks and the risk that the government will need to partially recapitalize them given the lack of private sector solutions. The rating agency also downgraded all 8 of the Vietnamese banks it assesses due to deteriorating asset quality and profitability pressure.
 
Our ViewWith uncertainty regarding economic and banking reform still lingering around, we prefer to be conservative at this time, holding high cash and only retaining our core equity holdings; companies which we have high conviction in and believe will stand the test of change.
We take this opportunity to do our homework well, combing the market carefully for resilient companies with little or no debt, strong growth potential, good cash flow and earnest management. Although valuations of certain companies and sectors have become quite attractive, we are not rushing in just yet. Too much change is happening or expected to be happening. So we need a little more certainty before getting back into the market.

Source: VAM Vietnam Asset Management, 15.10.2012

Filed under: Asia, Banking, Exchanges, News, Risk Management, Vietnam, , , , , , , ,

BMV – Mexico’s Stock Exchange to change trading hours from October 29 – November 1st, 2012

Mexico’s Stock Exchange  will change its trading hours from 08:30-15:00 local time (09:30-16:00 EST) to 07:30-14:00 local time (8:30-15:00 EST) from October 29 thru November 1 to adjust to the daylight savings time difference between Mexico and the US. Mexico’s Stock Exchange will continue to trade the same trading hours that the NYSE is open, during that period.

Source: BMV,10.10.2012

 

Filed under: Exchanges, Mexico, , , ,

Mexico: BMV Mexican Stock Exchange Aims to Attract High Frequency Traders with Platform Upgrade

Mexican stock exchange operator Bolsa Mexicana de Valores detailed its investment in a new trading platform that the bourse hopes will reduce execution time for trades while also boosting trading activity.

The platform will enable the bourse to complete a trade in 90 microseconds, or to facilitate around 100,000 transactions per second, putting it on par with the Singapore Stock Exchange and besting the New York Stock Exchange’s completion rate of 150 microseconds per trade, the Mexican exchange said. The platform, which began handling stock transactions on Sept. 3 and will handle derivatives trades starting in December, cost the bourse 150 million pesos ($11.5 million.)

The Mexican exchange hopes the updated platform will attract a greater number of sophisticated international market participants who are interested in executing algorithmic trades. Currently, such high-frequency trades account for 17% of the volume operated on the bourse, versus 70% of the volume in the U.S., the exchange said. In August the exchange averaged 1.9 million stock transactions a day.

The new platform also incorporates filters to prevent erroneous trades, for example by detecting price action that is out of sync with the market or unusually high volumes. In April the local brokerage house of Bulltick Capital Markets triggered a mini “flash crash” by entering an erroneous trade, knocking Mexico’s benchmark IPC stock index down about 2 percentage points.

Source: FIF Financial Information Forum, 17.09.2012

Filed under: BMV - Mexico, Exchanges, Latin America, Mexico, Trading Technology, , , , , , , , , , , , , , , ,