BVMF Presentation - December 2012
Transcript of BVMF Presentation - December 2012
-
7/30/2019 BVMF Presentation - December 2012
1/49
December 2012
-
7/30/2019 BVMF Presentation - December 2012
2/49
This presentation may contain certain statements that express the managements expectations, beliefs and assumptions
about future events or results. Such statements are not historical fact, being based on currently available competitive,financial and economic data, and on current projections about the industries BM&FBovespa works in.
The verbs anticipate, believe, estimate, expect, forecast, plan, predict, project, target and other similar
verbs are intended to identify these forward-looking statements, which involve risks and uncertainties that could cause
actual results to differ materially from those projected in this presentation and do not guarantee any future BM&FBovespa
performance.
The factors that might affect performance include, but are not limited to: (i) market acceptance of BM&FBOVESPA services;
(ii) volatility related to (a) the Brazilian economy and securities markets and (b) the highly-competitive industriesBM&FBovespa operates in; (iii) changes in (a) domestic and foreign legislation and taxation and (b) government policies
related to the financial and securities markets; (iv) increasing competition from new entrants to the Brazilian markets; (v)
ability to keep up with rapid changes in technological environment, including the implementation of enhanced
functionality demanded by BM&FBovespa customers; (vi) ability to maintain an ongoing process for introducing
competitive new products and services, while maintaining the competitiveness of existing ones; (vii) ability to attract new
customers in domestic and foreign jurisdictions; (viii) ability to expand the offer of BM&FBovespa products in foreign
jurisdictions.
All forward-looking statements in this presentation are based on information and data available as of the date they weremade, and BM&FBovespa undertakes no obligation to update them in light of new information or future development.
This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be
any sale of securities where such offer or sale would be unlawful prior to registration or qualification under the securities
law. No offering shall be made except by means of a prospectus meeting the requirements of the Brazilian Securities
Commission CVM Instruction 400 of 2003, as amended.
Forward Looking Statements
2
-
7/30/2019 BVMF Presentation - December 2012
3/49
BVMF STOCK PRICE
Recent Performance
3
-
7/30/2019 BVMF Presentation - December 2012
4/49
BVMF3 Recent performance
Updated until 11/30/2012.
BVMF3 YTD: +31.0%
Ibovespa YTD: +1.3%
4
IOFs10/17
R$14.97
Goodwill
11/30
R$13.01
Competition
News
01/05
R$13.10
Rumors
about IOF
Exchanges Mergers
02/08
R$11.18
BATs
02/15
R$11.43
Reductions of VolumesEstimates by the Market
New IOF on
Derivatives
07/26
R$9.55
Direct Edge
11/21
R$10.11
Removal of
IOF on Equities
12/01
R$10,54
Aug-10
Sep-10
Oct-10
Nov-10
Dec-10
Jan-11
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11
Dec-11
Jan-12
Feb-12
Mar-12
Apr-12
May-12
Jun-12
Jul-12
Aug-12
Sep-12
Oct-12
Nov-12
BM&FBOVESPA IBOVESPA
Oxera's Report
Release
06/18
Change of IOF
on foreign
exchange
transactions
06/14
-
7/30/2019 BVMF Presentation - December 2012
5/49
BRAZILIAN MARKET OPPORTUNITIES
5
-
7/30/2019 BVMF Presentation - December 2012
6/49
Source: ABRAPP, WFE and BM&FBOVESPA6
Equity Market (BOVESPA Segment)Low penetration in the Brazilian market
Clients base: huge potential in retail and pension funds segments
Number of custody accounts (thousands) Pension funds portfolio
Low penetration of equityand derivatives in the maininvestors portfolios
Stable and low interestrate environment encouragemore exposure in equities
Recent growth in the numberof retail investors, but stilllow compared to othermarkets
Listed Companies
Low number of listed companies compared toother countries
Lack of important economic sectors in theexchange, for instance: oil & gas, infrastructure,retail, IT and pharmaceutical,
Investment cycle may bring new companies andsectors to the exchange
Currently, SMEs are not able to raise moneythrough equity easily
Dec11 Listed Companies (27th in the World)
2002 2011
Equity
Fixed Income and Others
R$168 billion
R$574 billion
30.1%
27.7%
69.9%
72.3%
6.752
4.988
3.945 3.838 3.520 3.2762.886
2.079 1.816
373
India USA Canada China/HK Japan Spain UK Australia Korea Brazil
-
7/30/2019 BVMF Presentation - December 2012
7/49
7
Derivatives Market (BM&F Segment)Growth in the credit level will favor volumes
Credit: very low credit level and even lower in the case of mortgage transactions
Credit to GDP
Interest Rate in BRL contracts: growth in credit levels, specially in fixed rates, support the increase the activity offinancial institutions
FX contracts: growth in the amount of foreign trading and change in the culture of the Brazilian entrepreneurs canpush up volumes in this group of contracts, mainly in currencies other than US$
Index-based contracts: growth in cash equity market, the launching and development of ETFs and the growth ofexposure to equity by institutional investors can drive the growth of these contracts
Commodities contracts: cash settled contracts and the change in the behavior of farmers that are becoming moresophisticated
Trade Flow (total Imports + Exports in USD billions)
229
281
371
281
384
482
2006 2007 2008 2009 2010 2011
4.5%
5.8%
27.4%
51.0%Mortgage
Total Credit
-
7/30/2019 BVMF Presentation - December 2012
8/49
MAIN INITIATIVES
8
-
7/30/2019 BVMF Presentation - December 2012
9/49
Launching of new productsProduct diversification strengthens revenues and competitive position
15 ETFs currently tradedGrowth in ETFs
Market makers for options on 10 stocks and IBOVESPAMarket maker for
options
Cross-listing of futures contracts with CME Group (stock index-based and commodities contracts) and BRICS exchange (stockindex-based contracts)
Cross-listing ofderivatives with CME
and BRICS
A platform for retail investors to trade in government bondsthrough the Internet
Incentives granted to brokerage firmsTesouro Direto
Serves demand from trading or arbitrage strategies andborrowing demand to avoid settlement failsSecurities Lending
9
-
7/30/2019 BVMF Presentation - December 2012
10/49
ADTV(in R$ millions)
Average Assets under Management*
Consistent GrowthHistoric record of volumes keeping long term growth trend
(in R$ millions)
ETFs Exchange Traded Funds Tesouro Direto
Average Assets under Custody
(in R$ billions)
Average Number of Investors Retail Investors
(in thousands)
*Excluded PIBB11. 10
23.8 27.536.3 42.3
64.482.7 78.9 83.0 86.0
88.4 89.4
1.3 1.82.9
3.96.1
8.67.9 8.8
9.3 9.9 9.9
Hi h G h P d
-
7/30/2019 BVMF Presentation - December 2012
11/49
High Growth Products
Real Estate Funds (FII) and Agribusiness Credit Bills (LCA)
Agribusiness Credit Bills (LCAs)Real Estate Funds (FIIs)
FIXED INCOME AND REAL ESTATE PRODUCTS
0.1
25.4
Jan-11
Feb-11
ar-11
Apr-11
ay-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11
ec-11
Jan-12
Feb-12
ar-12
pr-12
ay-12
Jun-12
Jul-12
Aug-12
Sep-12
Assets under custody (R$ billions)
60%40%
Mkt. Shar e BVMF Other
11
19.7
96.2
# of investors
23.8
22.5
0
5
10
15
20
25
30
ADTV (R$ MM) Mkt Cap (R$ BN)
h h d
-
7/30/2019 BVMF Presentation - December 2012
12/49
213.0 210.7
53.1 89.7
9M11 9M12
PETR + VALE Others
2.9
3.96.1
8.66.4
9.3
2009 2010 2011 9M12 3Q11 3Q12
80 89123
153 143119
2009 2010 2011 9M12 3Q11 3Q12
Focus on product and market development, supportinghigher sophistication of market participants
Selected fast-growth products accounted for 7.6% oftotal revenues in 3Q12 (7.3% in 3Q11)
High Growth ProductsIncreased sophistication of market participants
ETFs (ADTV - R$ MM) Tesouro Direto (custody - R$ Bn)
HIGH GROWTH PRODUCTS
Options on stocks/indices (ADTV - R$ MM) Stock index futures (ADVthd contracts) Securities Lending (Open Interest)
Ibovespa index-related products (options onIbovespa, stock indices futures and ETFs) werenegatively impacted by reduced volatility whencompared to 3Q11
-1.1%
+68.9% -17.3%CAGR: +24.1%-6.5%
+45.6%CAGR: +43.8%
+90.2%CAGR: +85.3%
(R$ billion)
12.720.5
30.2 30.9 31.6 29.5
2009 2010 2011 9M12 3Q11 3Q12
CAGR: +34.5%
18.6 28.548.7
118.5
53.8
102.3
2009 2010 2011 9M12 3Q11 3Q12
12
-
7/30/2019 BVMF Presentation - December 2012
13/49
Licensing TRADExpress Real Time Clearing system
Objective: integrating and modernizing our existing clearing facilities should proceed over 2012.
Integrated tests with the market and implementation of the systems scheduled to take place in 2013/2014
Partnership advantages: License to use the software
Access to the source code
Selling rights over our new clearing platform
Multi-asset trading platform (PUMA Trading System)
State of the art in trading technology and technological independency
Derivates module successfully implemented in 2H11 Equities market to be concluded in 2H12
Strategic Projects
Registration systems for OTC derivatives
Objective: modernize, improve and expand the range of our registration services for OTCderivatives, while offering our customers a streamlined, quality solution and thoroughregulatory reporting tool
One of the most flexible and complete engines for registration, price discovery, riskassessment, capture and lifecycle processing of these transactions
Three-module implementation: the first one is schedule to 2H12, the second one for1H13 and third module of the platform will be announced in due course
13
Cl i H I i
-
7/30/2019 BVMF Presentation - December 2012
14/49
Clearing Houses IntegrationBuilding a state of the art platform
Equity and Corporate
Debt (R$ 70 bn*)
Equity, ETFs and fixedincome cash market
Equity and indicesderivatives (options andforward)
Securities lending
Derivatives
(R$ 107 bn*)
Financial andcommodities derivatives(futures, options andforward)
OTC derivatives
FX
(R$ 4 bn*)
FX spot market
(US$ vs. R$)
Securities
(R$ 1 bn*)
Cash market and forwardmarket for governmentbonds
INTEGRATED CLEARING HOUSE=
Capital efficiency
* Aggregate of pledged collaterals at our clearinghouses totaled R$181.3 billion in September 30, 2012. 14
M i P j t
-
7/30/2019 BVMF Presentation - December 2012
15/49*CORE, Close-out Risk Evaluation.
Main ProjectsDeliveries already implemented and programmed
INTENSE DELIVERY PHASE STARTING IN 4Q12
4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 (...)
Migration ofPUMA
TradingSystem(equities)
New integrated clearing house/ CORE*
Construction of the New Data Center
OTC DerivativesPlatform (Calypso)
Fixed income
tradingplatform
Fee structure redesigning and introduction of incentive programs
Development of new products / markets: ETFs, market making programs for the options market; dual listings
Fixed income
registrationplatform
Crosslisting
(...) (...)
(...) (...)
15
I i l P j
-
7/30/2019 BVMF Presentation - December 2012
16/49
Strengthening the sales force in other countries
- Offices in New York, London and Shanghai
Partnerships with international exchanges
- Strategic partnership with CME Group
- Asia: MoU and discussions with HKEx, Shanghaiand Shenzhen Exchanges
- Latam: MoU with Chile and Colombia exchangeand discussions with Peru and Colombia
- Cross-listing agreements signed with CMEGroup and BRICS exchanges
International ProjectsCreating a global market
16
-
7/30/2019 BVMF Presentation - December 2012
17/49
BUSINESS MODEL AND REGULATORY
FRAMEWORK
17
-
7/30/2019 BVMF Presentation - December 2012
18/49
Panel sponsored by CVM
-
7/30/2019 BVMF Presentation - December 2012
19/49
On June 29, CVM sponsored a discussion with stakeholders
Regulator: the study shows that competition in exchange industry is not urgent
Participants view
Regulator: market integrity and transparency are priorities
Brokers: most of them have doubts about the benefits and showed concerns related to cost risingand risks
Investors: in general have a perception that prices are in line with international benchmarks and are
concerned with market integrity Infrastructure providers (exchanges): non consensus regarding the necessity of opening the clearing
house or not in order to create the conditions for competition
BVMF main considerations:
Understates regulatory and IT/infrastructure cost for brokers
Disregards implicit costs of liquidity fragmentation and does not assess qualitatively the priceformation impacts
Compares inadequately the other market costs when does not use the All in cost
Market size is not big enough to embrace new exchanges
Recognizes the importance of clearing houses integration
19
Panel sponsored by CVMMain points
E it M k t S ttl t St t
-
7/30/2019 BVMF Presentation - December 2012
20/49
DTCC
BRAZIL(All the trades must be matched on an
exchange environment)
USA(Brokers can internalize orders)
BVMF
Post tradingClearing (CCP)
SettlementCentral Depository
Trading
BVMF
Brokers
A and B
Investors Investors
Brokers
A and B
Investors Investors
Broker
A
Broker
B
100% vertically integrated: clearing, settlement andcentral depository at the beneficial owner level
Brokers control their clients portfolios and settlepositions through BVMFs infrastructure (this
impacts the post-trade fees charged by BVMF)
DTCC does the clearing, settlement and centraldepository of securities at the brokers level
Each broker (prime broker) has its own structure tocontrol their clients portfolios and settle positions
(this impact the prime brokers costs)
Trading Venues
20
Equity Market Settlement StructureBrazil Compared with USA
-
7/30/2019 BVMF Presentation - December 2012
21/49
Updated until: 11/30/2012
Market Capitalization (US$ billions) and EBITDA Margin (%)
Listed Exchange Business Model
Diversified and Integrated Integrated Derivatives Diversified but Not Integrated*
* Do not provide post-trading services for the equity market
Business Model
21
Source: Bloomberg
* 12 mths to 30 June 2012.
18.3 17.312.0 10.9 9.6 6.0 5.7 5.4 4.2 4.0 2.7
1.8
65.5%
77.9%
61.6% 58.6%
69.7%
42.3%
62.2%
76.9%
49.1% 47.6%59.4%
72.0%
CME HKEx BVMF Deutsche
Boerse
ICE SGX Nyse
Euronext
ASX* LSE Nasdaq TMX BME
EBITDA Margin 2011Diversified and integrat ed Derivat ives Diversified but not integrat ed
Brazilian Market Regulatory Framework
-
7/30/2019 BVMF Presentation - December 2012
22/49
Brokers &
investors
Trading
Pos-Trading
Regulation prohibits internalization of orders, dark pools
and ATS/MTFs, stocks trading in both exchange and OTCsimultaneously
Settlement and clearing of stocks trading must be donethrough a CCP
Settlement and clearing at the beneficial owner level
make the Brazilian market safer and more resilient
Under the regulation in place, potential competitorswould be obliged to provide the same integrated
solution, with the same rules and transparency
The final investor pays the exchange fee
Other exchanges have been seeking integrated models(self clearing models)
Naked access is not allowed
Naked short selling is not possible
22
Brazilian Market Regulatory FrameworkLegal requirements: resilience, transparence, clear rules.
-
7/30/2019 BVMF Presentation - December 2012
23/49
33.5%
30.4%
9.0%
27.1%
Nov12
Source: Bloomberg (in USDtraded value of 35 companieswith ADRs programs )
End of CPMF
(Financial
Transaction Tax)
Sarbanes-Oxley Act
(Jul. 2002)
*Updated until 11/30/2012
36.1%
63.9%
Novo Mercado
Launching
(Dec. 2000)
23
Brazilians stock trading breakdown
Public Offerings in Number of Companies*2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Total
IPOs - 1 - 7 9 26 64 4 6 11 11 3 142
Follow ons 14 5 8 8 10 16 12 8 18 11 11 6 127Total 14 6 8 15 19 42 76 12 24 22 22 9 269
Dual Listings (IPO) - - - 2 1 1 - - 1 - - - 5
End of IOF Tax (2%) for
foreign investors
(Dec. 2011)
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Apr-11
May-1
1
Jun-1
1
Jul-11
Aug-1
1
Sep-1
1
Oct-11
Nov-1
1
Dec-1
1
Jan-1
2
Feb-1
2
Mar-12
Apr-12
May-1
2
Jun-1
2
Jul-12
Aug-1
2
Sep-1
2
Oct-12
Nov-1
2
Other USA Venues - Brazilian ADRs NYSE - Brazilian ADRs
BM&FBOVESPA - companies with ADRs BM&FBOVESPA (except companies with ADRs)
-
7/30/2019 BVMF Presentation - December 2012
24/49
OPERATIONAL HIGHLIGHTS
24
-
7/30/2019 BVMF Presentation - December 2012
25/49
**Relation of the trading value in the cash market and the market cap of the exchange. Updated until 10/31/2012. 25
BOVESPA Segment: operational highlights
Average Daily Traded Value ADTV (BRL billions)
Number of Custody Accounts (Thousands) Turnover Velocity** (12 months average)
Updated until 11/30/2012.
-
7/30/2019 BVMF Presentation - December 2012
26/49
BOVESPA Segment: capital raising activity
26* Excludes the capitalization with barrels reserves by federal government - BRL74.8 billion in Petrobras offering.
Public Offerings (BRL billions)
There are 7 offerings in the pipeline:
IPO (4): VIX Logstica; AutoBrasil Participaes; Cia. Estadual de guas Esgotos CEDAE; Lynx S.A
Follow-on (3): IdeiasNet S.A.; Equatorial Energia S.A.; Aliansce Shopping Centers S.A.
Additionaly, there are 16 Real Estate Funds filed in CVM: estimated value of R$2,6 billion
Pipeline: already announced to the market
Updated until 11/30/2012.
4.3 8.5 15.1 14.526.8 22.2
63.2
10.8 6.44.55.4
15.4
55.67.5 23.8
11.2
7.23.9
8.8 13.9
30.4
70.1
34.3
46.0
74.4
18.0 10.3
2004 2005 2006 2007 2008 2009 2010* 2011 2012
Follow-On
IPO
BOVESPA Segment
-
7/30/2019 BVMF Presentation - December 2012
27/49
15.2%
14.1%
1.8%
4.7%
16.2%
3.9%0.6%
6.8%
10.4%
26.4%
Oil, Gas and Biofuels Basic Materials Capital Goods and Services Construction and TransportationConsumer Non Cyclical Consumer Cyclical Information Technology Telecommunications
Public Utilities Financial
15.7%
21.6%
2.5%
3.6%
8.6%
2.6%
0.3%
11.1%
11.5%
22.4%
177%
126% 121%
109%100%
136%
67%75%
87%
72%
129%
100%
39%
174%
137%
158%
119%107%
129%
75% 76%
96%
72%
138%
80%
44%
129%
110% 109% 104%
89% 87%
60%57% 55% 50% 49% 46%
35%
Singapore Canada Chile USA Korea Australia Japan France India Brazil UK China Mexico
2009 2010 2011
Market Capitalization to GDP (%)*
Market Capitalization by Economic Sector
BOVESPA SegmentPotential to increase the number of listed companies
* Source: World Bank
27
Dec11 Dec05
Hong Kong : 438% 481% 365%
-
7/30/2019 BVMF Presentation - December 2012
28/49
28
BM&F Segment: operational highlights
Average Daily Traded Volume ADTV (Thousands of contracts)
Rate per Contract - RPC (BRL)
2006 2007 2008 2009 2010 2011 2012* O-11 N-11 D-11 J-12 F-12 M-12 A-12 M-12 J-12 J-12 A-12 S-12 O-12 N-11*Interest rates i n BRL 0.906 0.950 1.141 0.979 0.889 0.918 1.001 0.927 0.843 1.086 1.045 1.064 0.926 0.948 0.922 1.059 1.026 1.076 1.130 0.924 1.044
FX rates 2.244 1.859 2.065 2.161 1.928 1.894 2.183 1.991 1.870 2.082 2.106 1.929 1.876 1.991 2.015 2.237 2.325 2.453 2.481 2.506 2.370
Stock Indices 1.419 1.501 2.145 1.620 1.564 1.614 1.495 1.635 1.518 1.719 1.316 1.674 1.328 1.502 1.233 1.708 1.403 1.750 1.407 1.752 1.400
Interest rates in USD 1.094 0.965 1.283 1.357 1.142 0.941 1.004 1.066 0.836 0.930 0.958 0.804 0.911 0.991 1.021 0.955 1.143 1.027 1.086 1.024 1.164
Commodities 4.749 3.195 3.587 2.307 2.168 2.029 2.190 2.645 2.302 2.385 1.688 2.033 2.183 2.228 1.945 2.099 2.014 2.270 2.840 2.680 2.485
Mini contracts 0.034 0.054 0.162 0.176 0.128 0.129 0.116 0.128 0.122 0.132 0.131 0.130 0.130 0.122 0.113 0.116 0.111 0.110 0.109 0.112 0.107
OTC 1.571 2.111 2.355 1.655 1.610 1.635 1.739 1.234 2.051 2.444 2.438 1.515 1.822 1.880 1.203 1.321 1.523 2.693 1.139 1.738 1.711
Total RPC 1.247 1.224 1.527 1.365 1.134 1.106 1.182 1.166 1.040 1.293 1.236 1.227 1.079 1.100 1.074 1.272 1.222 1.277 1.314 1.098 1.242
*Updated until 11/30/2012.
Interest Rate in BRL Contracts
-
7/30/2019 BVMF Presentation - December 2012
29/49
29
Interest Rate in BRL ContractsStructural changes behind the growth in volumes
Interest Rate in BRL Contracts Breakdown by Maturity (thousands of contracts)
Uncertainty in consensus impacts short term contracts
Fixed Rate Credit in BRL billions Public Debt / Fixed Rate - in BRL billions
Source: Brazilian Central Bank
Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12
Jan'05:
BRL 180.0
Sep'12:
BRL 820.8
Jan'05:
BRL 151.4 bn
Sep'12:
BRL 725.0 bn
Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12
BM&F Segment
-
7/30/2019 BVMF Presentation - December 2012
30/49
BM&F SegmentGrowth in interest rate contracts with longer maturity
30
BRL INT. RATE: ADV PER MATURITY (MILLIONS OF CONTRACTS)
BRL INT. RATES: REVENUES (IN R$ MILLION)
CAGR: -16%
CAGR: +19%
CAGR: +3%
CAGR: -5%
CAGR: +13%
CAGR: +9%
11.9 11.0
25.8 24.9 23.5
47.240.7
75.389.9 96.1
59.151.7
101.1114.8 119.6
3Q08 3Q09 3Q10 3Q11 3Q12
1st-4th Maturity 5th Maturity Total
0.20.3
0.8 0.80.6
0.5 0.4
0.81.0
1.2
0.7 0.8
1.7
1.8 1.8
3Q08 3Q09 3Q10 3Q11 3Q12
1st-4th Maturity 5th Maturity Total
Hi h F T di (HFT)
-
7/30/2019 BVMF Presentation - December 2012
31/49
31
High Frequency Trading (HFT)
BM&F SegmentHFT (ADTV in thousands of contracts and mkt. share)
Bovespa SegmentHFT (ADTV in BRL billions and mkt. share)
Co-location(ADTV in thousands of contracts and mkt. share)
Co-location(ADTV in BRL billions and mkt. share)
0.6
1.10.8
1.0 0.9 0.8 0.81.0
0.91.1
1.2 1.21.0 1.1 1.0
0.8 0,8
0.3
0.4
0.3
0.30.3
0.2 0.3
0.4
0.3
0.30.3 0.2
0.2 0.3 0.3
0.2 0,20.2
0.2
0.2
0.20.2
0.1
0.2
0.4 0,31.0
1.7
1.31.5
1.3
1.1 1.1
1.4
1.2
1.41.5 1.5
1.3 1.3
1.51.4 1,3
8.6% 11.4%10.4%10.3%11.5% 9.3% 8.7% 8.4% 8.4% 9.0% 10.3% 8.8% 10.3%10.0% 9.1% 10.2% 10.1%
Jul-11 Aug-11Sep-11 Oct-11Nov-11Dec-11 Jan-12 Feb-12Mar-12Apr-12May-12Jun-12 Jul-12 Aug-12Sep-12 Oct-12Nov-12
ADTV (Foreigners) ADTV ( Indiv iduals) ADTV ( Institutionals) % of overall market
199 228
574720 725
1,1361,425
1,283 1,313
1.5% 1.8%
4.3%5.6% 5.1%
7.4%9.9% 9.6% 9.9%
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 Oct/12 Nov/12
-
7/30/2019 BVMF Presentation - December 2012
32/49
FINANCIAL HIGHLIGHTS
32
Highlights 3Q12 vs. 3Q11
-
7/30/2019 BVMF Presentation - December 2012
33/49
FINANCIAL HIGHLIGHTS
Gross Revenue: R$581.3 million, +6.2%
Bovespa Seg.: R$263.4 million, +5.9%
BM&F Seg.: R$219.3 million, +6.8%
Other revenues: R$98.7 million, +5.8%
Net Revenue:R$521.6 million, +5.7%
Adjusted Expenses:R$136.0 million, -0.2%
Operating Income: R$346.8 million, +7.0%
EBITDA: R$375.6 million, +8.1%
EBITDA Margin:72.0%
Adj. Net Income:R$400.6 million, +0.3%,
Adj. EPS: R$0.208, +1.7%
Payout: R$221.2 million in dividends and interest oncapital, 80% of GAAP net income in 3Q12
OPERATING HIGHLIGHTS
Bovespa Segment:
ADTV: +8.7%
Margin: flat
BM&F Segment:
RPC: +14.7%
ADV: -4.0%
High growth products:
ETFs: +90.2% ADTV
Tesouro Direto: +45.6% AUM
FII : strong growth in market capitalization andnumber of investors
LCA: consistent increase of register volume
MAIN PROJECTS FOR 4Q12 Cross listing: listing of S&P 500 mini contracts at BVMF
and Ibovespa at CME
PUMA Trading System: equities module
Registration Platforms
g g Q QGrowth in all business lines and costs under control
1 Excludes stock options plan, depreciation, provisions and tax on dividends from CME Group. 2 Excludes deferred liability recognized in correlation with temporary differences from amortization ofgoodwill for tax purposes, the impact of the stock options plan, the investment in associate (CME Group) accounted for under the equity method of accounting, net of taxes related to dividends and
recoverable taxes paid overseas to be compensated. 33
Financial Highlights
-
7/30/2019 BVMF Presentation - December 2012
34/49
OPERATING CASH GENERATION
Payout:R$221.2 million, R$131.2 million in dividendsand R$90.0 million in interest on capital, 80%ofGAAP net income in 3Q12.
Share buyback program: up to 60 million sharesauthorized for repurchase until June 28, 2013
+6.9%
g gFocus on cash generation and shareholders return
*Includes collaterals pledged by participants in the form of cash, receivables and rights in securities under custody, as well as payouts still undisbursed.
** Includes third party collaterals and restricted funds at BM&F Settlement Bank (Banco BM&F).
RETURNING CAPITAL TO SHAREHOLDERS
CASH AND FINANCIAL INVESTMENTS
(R$ million) (R$ million)
Budget range : R$230-260 million
Actual 3Q12: R$52.3 million
Actual 9M12: R$124.2 million
CAPEX BUDGET FOR 2012
340.5 364.1
3Q11 3Q12
1,270
1,551
1,207
1,443
1,166
468
380
383
340
343
284
270
354
363
390
1,487
1,582
1,714
1,979
2,100
3,508
3,782
3,658
4,125
3,999
3Q11
4Q11
1Q12
2Q12
3Q12
Market participants cash collateral and others* Restricted funds
Subsidiaries** Available funds
34
Revenue Breakdown in 3Q12
-
7/30/2019 BVMF Presentation - December 2012
35/49
9.2%
30.1%
1.4%
3.8%
14.3%
22.7%
18.5%
37.0%: Financial/Commodities Derivatives
14.3%: Trading
22.7%: Post-trading
39.3%: Cash Equities
9.2%: Trading
30.1%: Post-trading
5.2%: Derivatives on Stocks and Indices
1.4%: Trading
3.8%: Post-trading
4.5%: Depository, Custody and back-office3.2%: Securities Lending
3.1%: Vendors
2.2%: Trading Access (brokers)
1.9%: Listing
3.6%: Others
QDiversified revenue sources as a differential
REVENUE BREAKDOWN (3Q12)
Gross Revenue:R$581.3 million
18.5%: Other revenues
35
Expenses in 3Q12
-
7/30/2019 BVMF Presentation - December 2012
36/49
47%
14%
14%
8%
2%
15%
Personnel
Data. Proc.
Depr./
Amort.
ThirdParty
Marketing
Other
-0.2%
ADJUSTED EXPENSES: 3Q11 vs. 3Q12
pFocus on cost control and higher operating efficiency
ADJUSTED EXPENSES
Expenses:R$174.8 MM
TOTAL EXPENSES BREAKDOWN (3Q12)
(R$ million)
ADJUSTED EXPENSES: 2Q12 vs. 3Q12
(R$ million)
(R$ million)
136.3
163.9
125.4 127.9136.0
3Q11 4Q11 1Q12 2Q12 3Q12
127.9
136.0
2.5
(0.3)
4.8 0.1
(0.8)
1.7
2Q12 Adj.Exp. Personnel Data proc. Third Party Commun. Marketing Others 3Q12 Adj.Exp.
136.3 136.0
1.5
(0.7)
2.4
(1.1)(2.5)
0.1
3Q11 Adj.Exp.
Personnel Data proc. Third Party Commun. Marketing Others 3Q12 Adj.Exp.
36
Reduction in OpEx Budget
-
7/30/2019 BVMF Presentation - December 2012
37/49
p gFocus in cost control
2012 adjusted OpEx budget range lowered to R$560 million - R$580 million,
from R$580 million - R$590 million
37
268
204
9M12:
124
230-260
2010 2011 2012
CapEx budget (R$ MM)
2012 ADJUSTED OPEX BUDGET REVISED DOWNWARDS
Nominal reduction in expenses: inflationary growth in expenses fullycounterbalanced by greater operating efficiency
Budget includes planned transfer of resources to BSM of approximately
R$15 million in 4Q12
Budget range : R$230-260 million
Actual 3Q12: R$52.3 million
Actual 9M12: R$124.2 million
544(actual)
585(actual)
585(mid-point)
570(mid-point)
00
50
00
50
00
50
00
50
00
50
00
2010 2011 2012e
(old budget)
2012e
(revised budget)
Adjusted expenses budget (R$ MM)
Zero nominalgrowth
-
7/30/2019 BVMF Presentation - December 2012
38/49
38
Appendix
38
Fully integrated Business Model
-
7/30/2019 BVMF Presentation - December 2012
39/49
Listing(stocks, bonds, funds,
asset-backed securities,Among others )
Commodities
Certification
Trading(stocks, derivatives, corporate and government
Bonds, funds, spot US Dollar, among others)
Central Counterparty (CCP)Clearing and Settlement
(for all products)
Central Depository
(stocks and corporate bonds)
Securities Lending
(stocks and corporate bonds
Custody(services provided for fundsand other market
participants)
Market Data
Indices Licensing
Software Licensing
(used by brokerageHouses and other
market participants)
OTC Derivatives
(registration and collateralmanagement)
y gDiversified sources of revenues
Services for issuers, brokers and
commodities tradingTrading, Clearing and Depository Activities Others Services
39
Trading Access
(Brokers)
New Products Pipeline
High Frequency Trading - HFT
-
7/30/2019 BVMF Presentation - December 2012
40/49
New Products Pipeline
40
New pricing policy (both segments)
Main Characteristics
Differentiated fees by tier only for day trades transactions executed by a registered HFT
A HFT Committee created to approve and monitor the HFTs
The new pricing policy was implemented in Nov10
Bovespa Segment
In the Bovespa Segment, different tiers were created for individuals and non-individuals HFT investors
BM&F Segment
In the BM&F Segment, the 70% flat discount was replaced by a volume tiered based discount, only for day trades,divided into trading and registration fees
Individuals
ADTV tier (BRL millions)
Trading Fee
(bps)
Settlement
Fee (bps) Total
Up to 4 (inclusive) 0.70 1.80 2.50
From 4 to 12.5 (inclusive) 0.50 1.80 2.30
From 12.5 to 25
(inclusive) 0.20 1.80 2.00
From 25 to 50 (inclusive) 0.05 1.75 1.80
Above 50 0.05 1.55 1.60
Non-individuals
ADTV tier (BRL millions)
Trading Fee
(bps)
Settlement
Fee (bps) Total
Up to 20 (inclusive) 0.70 1.80 2.50
From 20 to 50 (inclusive) 0.50 1.80 2.30From 50 to 250
(inclusive) 0.20 1.80 2.00From 250 to 500(inclusive) 0.05 1.75 1.80
Above 500 0.05 1.55 1.60
BOVESPA Segment: foreign investment flow
-
7/30/2019 BVMF Presentation - December 2012
41/49
*Includes regular trades and public offering. Updated until Sep. 30, 2012.
Monthly Net Flow of Foreign Investments* (in BRL billions)
BOVESPA Segment: foreign investment flow
41
(0.6)
0.5
3.43.8
6.1
4.2
6.4
1.7
5.2
9.0
2.11.4
(1.6)
0.3
6.5
1.5
(1.5)
3.7 3.5
(0.6)
10.0
4.4
2.10.7
0.4
1.7
(1.3)
0.3
3.41.92.2
(0.4)(0.2)
0.81.0
(2.4)
7.2
(1.1)(1.3)
3.9
(2.3)
0.3(0.3)1.1
(4.2)
(1.2)
0.5
Operational highlights: investor s participation in Total Volume
-
7/30/2019 BVMF Presentation - December 2012
42/49
Operational highlights: investor s participation in Total Volume
42
Bovespa Segment (Investors Participation in Total Value)
BM&F Segment (Investors Participation in Total Volume)
Investment Funds
-
7/30/2019 BVMF Presentation - December 2012
43/49
Investment Funds
43
AUM Evolution (in BRL billions)
Source: ANBlMA (Jul-12) and Investment Company Institute ICI (2Q12).
Percent of Equity Fund Assets
Worldwide Brazil
Equity
funds14%
657861 899
1,070
1,301
1,5131,375
1,703 1,7871,925
2,180
11%
10% 11%11%
15%22% 14%
18% 18%15%
14%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Nov-12
EquitiesFixed Income
Equity
funds
40%
-
7/30/2019 BVMF Presentation - December 2012
44/49
3Q12 EARNINGS
44
Bovespa Segment
-
7/30/2019 BVMF Presentation - December 2012
45/49
ADTV growth and flat margins
OPERATING HIGHLIGHTS
ADTV and margin in basis-points
Average market cap and turnover velocity
HFTs: ADTV (R$ millions) and participation of volume (%)
3Q12 x 3Q11:
+8.7% ADTV => 9.8% growth of cash equitiesADTV
foreign investors ADTV went up 26.2% => foreignHFTs ADTV rose 24.9%
all-time-high monthly ADTV of R$8.4 billion inSep-12
record of 1.5 million trades in 9/14
stable trading margins at 5.7 bps
higher turnover velocity of 70.4%
6.6% growth in the average market capitalization
3Q12 x 2Q12: ADTV 6.1% down compared to the previous
record of R$7.6 billion in 2Q12
margins 4.2% higher => lower participation ofinstitutional investors and day trades, which paylower fee rates
6.6 6.4 7.2 7.6 7.2
5.71 5.58 5.91 5.50 5.73
3Q11 4Q11 1Q12 2Q12 3Q12
ADTV (R$ billions) Margin (bps)
2.2 2.2 2.5 2.4 2.4
69.3% 66.6% 66.2% 75.0% 70.4%
-
3Q11 4Q11 1Q12 2Q12 3Q12
Average Stock Market Capitalization (BRL trillions) Turnover Velocity (%)
835.1 916.7 873.91,185.6 1,043.5
319.3 249.2 325.3
268.3251.6174.6 146.0 -
0,273,8
1,329.1 1,311.91,199.1
1,454.1 1,368.9
10.3% 10.3%8.5%
9.4% 9.8%
3Q11 4Q11 1Q12 2Q12 3Q12
Foreigners Individuals Institutionals % of overall market
45
BM&F Segmenth
-
7/30/2019 BVMF Presentation - December 2012
46/49
15% 3% 6%
16%7% 2%
4%
4% 2%
8%
7% 22%
57%79% 68%
3Q11 2Q12 3Q121s t Maturity 2nd Maturity 3rd Maturity 4th Maturity 5th Maturity
Average RPC growth
OPERATING HIGHLIGHTS
ADV (millions of contracts) and RPC (R$)
HFTs: ADV (thd contracts) and participation of volume (%)
BRL Int. Rates - volumes by maturities (%)
3Q12 x 3Q11:
+14.7% RPC
=> depreciation of R$/US$ rate impacting RPCof FX (+36.2%) and USD int. rates (+25.3%)contracts;
=> 10.1% increase in RPC for BRL int. rate due toconcentration of trading in longer maturitiescontracts (4th and 5th)
-4.0% ADV => drop in ADV of BRL int. rate (-2.4%), indices (-17.3%) and FX (-13.8%) wentdown
Lower participation of HFTs, due mainly to areduction in ADV of FX and indices contracts
3Q12 x 2Q12:
+12.0% RPC => reflecting the depreciation ofR$/US$ rate (-6.5%) and reduction of day tradeoperations of BRL int. rates
-19.8% ADV compared to the previous record ofR$3.4 million contracts in 2Q12
65% 86% 90%
1.8 1.5 1.7 2.3 1.8
0.5 0.5 0.50.5
0.50.3 0.3 0.3
0.30.4
2.8 2.5 2.73.4
2.7
1.1061.157 1.172 1.133
1.269
3Q11 4Q11 1Q12 2Q12 3Q12
Int. Rate BRL FX Indices Others RPC (BRL)
68.2 50.9 46.5 68.7 58.3
148.3119.9 129.5 140.0 73.8
178.7
139.6 134.8
224.0
209.1
24.4
24.8101.4
9.8
0.9
7.8% 7.2% 8.0% 6.3% 6.7%
419.5335.2
412.2 442.5342.2
-
100,0
200,0
300,0
400,0
500,0
3Q11 4Q11 1Q12 2Q12 3Q12
Equities FX Mini contracts Others % in Ove rall Volume
46
Net incomeN i i d b f ll i fi i l i
-
7/30/2019 BVMF Presentation - December 2012
47/49
399.6
27.9
(3.9)
(37.1)
14.1
400.6
3Q11
Adjusted net
income
Net revenues Expenses* Financial
Income
Income tax 3Q12
Adjusted net
income
324.1 346.8
3Q11 3Q12
375.6347.5
3Q123Q11
Net income impacted by a fall in financial income
Adjusted net income did not fully capture the revenue growth due to a plunge in
interest income
Financial Income: 3Q12 vs. 3Q11
+8.1%
EBITDA growth in line with operating income
growth
ADJUSTED NET INCOME EBITDA
R$45.5 million,down 44.9%
Financial Revenue: R$67.6 million, down 33.7% due mainlyto lower interest rates
Financial Expenses: R$22.1 million, a 14.0% growth due todepreciation of 24.0% in R$/US$
OPERATING INCOME
(R$ million)
(R$ million)
+7.0%
(R$ million)
* Excludes stock options planand tax on dividends from CME Group.47
Final RemarksBVMF b d i i
-
7/30/2019 BVMF Presentation - December 2012
48/49
BVMF better prepared to capture opportunities
OPPORTUNITIES IN BRAZILIAN MARKETS
New reality of lower interest rates
Capital markets set to become a moreimportant alternative for long-termfunding
MAINTAINING MARKET INTEGRITY
Control, governance, transparency and
market security Strengthening the integrity of Brazilian
capital markets targeting growth
WHAT IS BVMF DOING?
Investing intensively in trading and post-trading platforms
Increasing focus on customers (brokers and investors): revisiting the fee structure, investingin product development
Stringent cost controls
Ensuring market integrity by establishing efficient controls and strengthening BSM
WHAT IS ALREADY HAPPENING!
Operating leverage materialization
Revenue growth, despite slow economic growth scenario and international instability
High potential products have been showing strong growth
48
-
7/30/2019 BVMF Presentation - December 2012
49/49