No MILA role for Bovespa ahead, says Pinto

No MILA role for Bovespa ahead, says Pinto


The disparity in trading volumes and regulations means the BM&FBovespa is unlikely to join MILA, the integrated Latin American market, the head of Brazil’s stock exchange said.

A lack of trading volume on the MILA platform — which is an amalgamation of the Chilean, Colombian, and Peruvian stock exchanges — has held back incorporation of the BM&FBovespa, Edemir Pinto, the chief executive, said.

“Mila is two years old, and still there is not much volume,” he told LatinFinance. “But the design is a good one, and an important one.”

Some 85% of Latin America’s derivatives trading takes place on the BM&FBovespa, Pinto told investors last week.

“Intercontinental operations are very difficult, very complicated,” he told the audience, citing failed merger attempts between such institutions in Singapore and Australia, and London and Toronto.

BM&FBovespa’s management had considered joining MILA, but decided not to, he said. Regulatory differences were another barrier to entry, he said.

Nonetheless, the Brazilian stock market is working with its regional counterparts. It has provided technical assistance to the Chilean stock exchange to develop a derivatives market, said Pinto.

MILA had a stock market capitalization of $660 million at the end of October, and total volume traded was $5.7 billion that month. In contrast, the BM&FBovespa has averaged a market capitalization this year of 2.4 trillion reais ($1.1 billion). Daily trading averaged 6.6 billion reais in October. LF