UPDATE 1-BM&FBovespa wants stakes in Latin American rivals, CEO tells FT
(Adds share performance, comments in paragraphs 3-5)
By Guillermo Parra-Bernal
SAO PAULO Nov 24 (Reuters) - BM&FBovespa SA wants to buy up to 15 percent of every major stock exchange operator in Latin America in a move to assert the influence of Brazil's sole listed bourse across the region, Chief Executive Officer Edemir Pinto told the Financial Times.
São Paulo-based BM&FBovespa, which was created after the tie-up of two arch-rivals in 2008, hired two banks last month to acquire stakes in the main exchanges of Mexico, Colombia, Chile, Peru and Argentina, Pinto said in an interview with the FT published on Monday.
According to the FT report, Pinto said the goal of those purchases is to ensure a board seat on each bourse. According to JPMorgan Securities executives led by Domingos Falavina, BM&FBovespa could spend about $270 million on the plan.
"We view this initiative with skepticism," Falavina wrote in a client note. "Integrating exchanges is largely dependent on integrating clearing houses and also the custody of assets, and we sense local governments unwilling to forfeit the control over their financial assets."
Shares of BM&FBovespa gained 1.3 percent to 10.70 reais on Monday.
Pinto's remarks underscore a trend among the world's largest exchanges, which are building up stakes in some rivals to tap into the potential of some of the world's fastest-growing capital markets. CME Group Inc, which owns a stake in BM&FBovespa, and Nasdaq OMX Group Inc are among bourse operators increasing their foothold in countries across Latin America and Asia.
The media office of BM&FBovespa confirmed the content of the FT story.
According to the FT, BM&FBovespa would be interested in buying some of the capital of Mexico's Bolsa Mexicana de Valores SAB, Bolsa de Valores de Colombia SA, Argentina's Mercado de Valores de Buenos Aires SA, Chile's Bolsa de Comercio de Santiago SA and Peru's Bolsa de Valores de Lima SA.
The largest exchange in Latin America outside Brazil is Bolsa Mexicana, which earned about $60 million, or the equivalent of 8 percent of BM&FBovespa profits last year. Assuming the company acquires 15 percent stakes in the five bourses, earnings at BM&FBovespa could climb by $14 million annually, according to JPMorgan's Falavina. (Reporting by Guillermo Parra-Bernal; Editing by W Simon and Chizu Nomiyama)
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