Brazil Exchanges Seen Merging Quickly

The merger between the Bovespa and the BM&F will be finalized by the end of June, setting the stage for a push into other LatAm markets, Manoel Felix Cintra Neto, the BM&F’s chairman, tells LatinFinance. The executive attributes the rapid integration process to deliberate preparations for the deal on both sides, prior to formal announcement of discussions. “We want to create a center for the liquidity in the region,” says Cintra, adding the idea is to compete on a global scale with other exchanges, such as the US, where a number of liquid LatAm companies are listed. Cintra avoids formulating the expansion as an acquisition spree, though the idea is by no means far fetched, given how other global exchanges have used mergers to gain scale and volume. The merged bourse will be the second largest in the Americas and the third largest in the world, beating the NYSE and Nasdaq in terms of market capitalization, according to Economatica. “We want companies to list themselves in several different places in the region,” says Cintra, noting investors in Chile and Mexico are interested in companies and derivatives products in Brazil, while Brazilian investors would like to invest directly in commodities and companies elsewhere.