BM&FBovespa Buys Mexico Bourse Stake in Bid for More Integration

  • Operator has already purchased stake in Chile's exchange
  • BM&FBovespa has said it sees chance for new distribution

BM&FBovespa SA, the operator of Latin America’s biggest securities exchange, bought a stake in Bolsa Mexicana de Valores SAB as it expands its relationship with regional bourses.

The Sao Paulo-based company bought about 4.1 percent of the operator of the Mexican exchange for 136 million reais ($37 million), according to a regulatory filing late Tuesday. BM&FBovespa said it will continue to evaluate opportunities for growth.

The bourse has said it wants to play a role in the financial integration of Latin America, and it has already purchased a minority stake in Chile’s Bolsa de Comercio de Santiago. Last year, Chief Product Officer Eduardo Guardia told analysts that minority stakes could open the door to board seats, help it get closer to more of the region’s investors and eventually allow it to distribute products through new channels. The company has also held talks with the Colombian exchange, according to remarks by the president of that bourse last year.

At the time, BM&FBovespa’s Guardia said the plan was intended to show results in the medium to long-term, and analysts shouldn’t expect it to drive results immediately.

“Clearly it’s positive” for the Mexican exchange, said Aldo Miranda, an equity sales trader at CI Casa de Bolsa SA in Mexico City. “It’s a sign of confidence and it’s a significant stake.”

Bolsa Chief Executive Officer Jose-Oriol Bosch said in a telephone interview that the Mexican exchange operator learned of the purchase Tuesday. He said while it’s always positive when anyone buys your shares, he declined to speculate on the Brazilian operator’s strategy.

The Bolsa’s bylaws cap ownership by a single outside shareholder at 5 percent and under Mexico’s market law an investor’s holdings of a single issuer are limited to 10 percent unless specific permission is granted by the Finance Ministry, Bosch said. The bylaws don’t distinguish between foreign and local investors, he said.

Declining Volume

In Brazil, trading volume has declined over the past two years and economists forecast the country’s worst recession in a century, prompting companies with the wherewithal to do so to look for diversification opportunities elsewhere.

BM&FBovespa is also engaged in a takeover bid for Cetip SA, Brazil’s largest clearing house. On Wednesday, Estado de S. Paulo columnist Sonia Racy reported Cetip had accepted BM&FBovespa’s offer to merge, citing a banker involved in the deal who wasn’t identified. The exchange operator said in a separate regulatory filing that there’s no new information that needs to be communicated to the market.

Last month, Cetip rejected a second takeover bid from BM&FBovespa, but said it authorized its financial advisers to start discussing a merger.

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