BM&FBovespa Profit Misses Estimates on Lower Trading Volume

BM&FBovespa SA (BVMF3), the operator of Latin America’s biggest securities exchange, posted third-quarter profit that missed analysts’ estimates as trading volume dropped, curbing revenue growth.

Adjusted net income was 378.5 million reais ($186.3 million), compared with an average estimate of 385.3 million reais, according to data compiled by Bloomberg. Net income fell 5.3 percent to 276.5 million reais, while revenue rose 5.7 percent from a year ago to 521.6 million reais, the company said in a regulatory filing yesterday.

Average daily trading volume in derivatives fell 20 percent from the previous three months to 2.7 million contracts on speculation the central bank’s cycle of interest-rate cuts is ending. After lowering the benchmark Selic 5.25 percentage points since August 2011, policy makers are expected to hold it at 7.25 percent at the meeting scheduled to end on Nov. 28, according to a central bank survey of about 100 economists published Nov. 5.

There was “a loss of momentum against the relatively strong numbers posted in the previous quarter” because of “modest” trading volume in derivatives, Alexandre Spada, an analyst at Banco Itau BBA SA in Sao Paulo, wrote in a note to clients on Oct. 22.

Average trading volume in stocks was 7.2 billion reais in the third quarter, a 6.1 percent decline from the previous three months and a 8.7 percent growth from a year earlier, according to the filing.

Shares have jumped 41 percent this year, while the Bovespa index rose 4.8 percent.

To contact the reporter on this story: Ney Hayashi in Sao Paulo at ncruz4@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos in New York at papadopoulos@bloomberg.net

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