CME, Mexico's BMV Plan Electronic Trading Connection For April

The first leg of an electronic trading connection linking Mexican exchange operator Bolsa Mexicana de Valores SAB (BOLSA.MX) and CME Group Inc. (CME) is expected to go live in April, strengthening the U.S. company's ties to fast-growing Latin American derivatives trade.

BMV executives said Wednesday the planned hookup to CME's Globex trading platform will likely be completed in August, opening both exchanges' derivatives contracts to a broader range of potential traders.

"Our CME alliance gives us a sound footing in the current merger environment," said Luis Tellez, chief executive of BMV, on a conference call discussing the operator's fourth-quarter earnings results.

The cross-border pathway for automated trade will be the latest for CME, which for two years has maintained a similar connection to Brazilian markets and also links to futures exchanges in Malaysia and Dubai. CME also holds a 1.9% stake in BMV and has a board seat.

BMV on Wednesday reported a 41% rise in profits for the fourth quarter, earning 186 million pesos ($15.2 million) on 524 million pesos ($42.9 million) in revenue. Full-year income rose to 621 million pesos ($50.8 million) on a 50% rise in 2010 trading volumes, narrowly underperforming a target laid out by Tellez last April.

Heavy growth in BMV's derivatives trade on its MexDer platform was fueled by uptake in its U.S. dollar contracts, with volume rising more than six-fold to represent about 17% of all fourth-quarter trading activity.

The electronic link-up to CME's Globex system will see derivatives orders routed from BMV to the CME in April, with trades going the other way from August, Tellez said Wednesday. CME confirmed the planned timing.

"Although it is difficult to estimate the revenues that this agreement will generate or how fast it will start generating them, we are extremely positive about its success and we have no doubt that in the near future derivatives will be one of the fastest, if not the fastest, growing business segment," Tellez said.

BMV forecast full-year net income for 2011 rising to between 655 million and 670 million pesos, which Tellez said excluded any additional trading activity fostered by the link with CME. The company's board also approved a dividend payment of 540 million pesos, equal to about 91 cents per share.

-By Jacob Bunge, Dow Jones Newswires; 312-750-4117; jacob.bunge@dowjones.com

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