Cetip SA - Balcao Organizado de Ativos e Derivativos, Brazil’s biggest securities clearinghouse, plans to start offering commodities options contracts this year and expects derivatives trading volume to increase 10 percent in 2011.
The contracts may start trading in the first half, Carlos Ratto, an executive director at Cetip, said in an interview yesterday in Sao Paulo.
Cetip is expanding as commodities prices soar and exchanges diversify to increase revenue. The UBS Bloomberg Constant Maturity Commodity Index has almost doubled in the past two years as metals, crude and agriculture prices gained. In December, Cetip agreed to buy GRV Solutions SA, a provider of credit-risk management services, for 2 billion reais ($1.2 billion). Investors are returning to derivatives after incurring losses in 2008 when companies including meatpacker Sadia SA made wrong-way currency bets, Ratto said.
“Despite the fact that the problem was not the product, but the use of the product, it suffered a lot during the crisis,” Ratto said of derivatives. “The trend is that this aversion slowly reduces and the companies start using more derivatives.”
Brazil’s derivatives trading expanded 10 percent in 2010 to 850 billion reais from a year earlier, Ratto said. This year, volume is likely to rise by the same percentage, he said.
Cetip rose 55 percent in the last 12 months through yesterday, compared with a 0.8 percent fall for Brazil’s benchmark Bovespa stock index. The shares rose 1.8 percent to 23.69 reais in Sao Paulo trading at the market close.
Derivatives are contracts whose value is derived from stocks, bonds, loans, currencies and commodities, or linked to specific events such as changes in interest rates or the weather.
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