Heather McLean
Heather McLean

Regional e-FX perspective on Brazil

On 22 September 2009, the credit rating agency Moody’s became the last of the big three rating agencies to grant Brazil the coveted investment-grade status, clearing the way for deep pocketed US and European institutional investors to look towards the country as a source for generating higher yield returns from investment portfolios. At the same time Brazil has also been seeing rapid growth and demand for FX e-commerce and e-trading services from a wide variety of traders, investors and cash management professionals. Heather McLean sets out to discover what factors are driving demand for e-FX in this Latin American powerhouse.

Last year Brazil emerged in better shape than other peers from the world financial crisis and now dominates Latin American securities trading, with BM&FBovespa, a Brazilian company created in 2008 through the integration of the São Paulo Stock Exchange (Bolsa de Valores de São Paulo) and the Brazilian Mercantile & Futures Exchange (Bolsa de Mercadorias e Futuros), being the largest exchange of the world in terms of market value and the leading exchange in Latin America.   Carlos Areia, CEO at Phare Global Markets, explains: “As the Latin American market attracts more sophisticated investors from around the world seeking better investment alternatives and arbitrage opportunities, it also attracts interdealer brokers offering FX platforms and FX solutions to their customers. Investors and financial players have become more sophisticated and FX has started to be traded as an asset class to generate alpha and also as hedging strategy.” “The fact is that there...continued

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