01.06.2012

Banks Turn to LatAm

01.06.2012
Terry Flanagan

Credit Suisse has acquired a broker-dealer license in Chile, the latest show of confidence by a global financial institution in the Latin American markets.

Latin America, as one of the leaders among the emerging markets, is increasingly attracting investing activity from abroad, at the same time that local investors are looking for more sophistication.

“Chilean private investors are increasingly demanding a more sophisticated approach in terms of asset allocation as well as gaining access to a truly global platform for specialized financial services and products,” said Silvan Wyss, Head of Credit Suisse Private Banking Latin America.

It is not only banks looking toward the emerging markets in Latin America, but exchanges as well. Direct Edge will look to launch a new electronic exchange to be based in Rio de Janeiro in late 2012.

The U.S.’ fourth largest equities exchange operator by market share has announced plans to enter the Brazilian market with Direct Edge Equities, an all-electronic platform for the trading of Brazilian equities. The exchange is expected to go live in the fourth quarter of 2012, pending regulatory approval from the Comissao de Valores Mobiliarios.

Direct Edge’s move to launch a Brazilian exchange is the latest chapter in Latin America’s ascent as an emerging market.

Finamex, a Mexican agency-only broker-dealer, recently announced the launch of a new suite of algorithms aimed at trading U.S.-based securities in the Mexican market. The algorithms are designed to arbitrage any price discrepancies or inefficiencies between venues due to data latency.

The move is part of a shift in the Mexican trading landscape toward more algorithmic trading. Exchange operators Bolsa Mexicana de Valores and MexDer have each entered into strategic partnerships with CME Group whereby they utilize the Chicago derivative exchange’s technology. Since the partnerships began, the markets have seen speed increase and become more efficient.

The Mexican Stock Exchange will look to join the consortium of Latin American exchanges in a move to bolster the region’s markets. BMV also recently launched a sustainability index, which is only the third such index in the global financial markets. The company also plans on offering an ETF for the index, giving those investors who are interested in investing in Mexican sustainability companies the ability to do so.

 

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