RMASL30: LatAm plans
15 October 2013 Boca Raton
Image: Shutterstock
Clients need Brazil, largely accepted as Latin America’s most important jurisdiction, to be developed into a free flowing liquid market, according to panellists at the 30th Risk Management Association Conference on Securities Lending in Boca Raton, Florida.
Tony Kim of Morgan Stanley gave attendees a run-down of the size of the individual markets that make up Latin America, with Brazil having an approximate market capitalisation of $1 trillion, Mexico $500 billion and Colombia $250 billion.
Brazil “is certainly not a small market”, said Kim, adding that it is similar in size to South Korea and Taiwan.
Jill Rathgeber of BNY Mellon noted a big difference between Brazil and South Korea and Taiwan, saying that in Brazil collateral cannot be held offshore, but can be in the Asian markets.
Mexico and Brazil are the only markets in Latin America to count for equity finance at the moment, added Carey Chamberlain of HSBC Securities.
James Gerspach of J.P. Morgan agreed, saying those were the Latin American markets in which J.P. Morgan currently lends, as demand in Colombia, Chile and Peru “is very small”.
Despite the country’s size and importance, prime brokers have to be creative when gaining access to supply in Brazil, according to Chamberlain, who added that the market “is not vanilla” and “not easy” to navigate.
He added: “Brazil’s not a liquid market and [we need] a free flowing liquid market for all clients.”
Brazil’s first securities lending association was launched in August. It is charged with improving communication between international players, local participants and the exchange, which oversees transactions through a central counterparty model.
Chamberlain said that he hopes the association will help to answer market participants’ questions and address their needs.
Meanwhile, the RMA is working on its first ever Latin American securities lending conference. The event will be held in Brazil in May 2014.
Tony Kim of Morgan Stanley gave attendees a run-down of the size of the individual markets that make up Latin America, with Brazil having an approximate market capitalisation of $1 trillion, Mexico $500 billion and Colombia $250 billion.
Brazil “is certainly not a small market”, said Kim, adding that it is similar in size to South Korea and Taiwan.
Jill Rathgeber of BNY Mellon noted a big difference between Brazil and South Korea and Taiwan, saying that in Brazil collateral cannot be held offshore, but can be in the Asian markets.
Mexico and Brazil are the only markets in Latin America to count for equity finance at the moment, added Carey Chamberlain of HSBC Securities.
James Gerspach of J.P. Morgan agreed, saying those were the Latin American markets in which J.P. Morgan currently lends, as demand in Colombia, Chile and Peru “is very small”.
Despite the country’s size and importance, prime brokers have to be creative when gaining access to supply in Brazil, according to Chamberlain, who added that the market “is not vanilla” and “not easy” to navigate.
He added: “Brazil’s not a liquid market and [we need] a free flowing liquid market for all clients.”
Brazil’s first securities lending association was launched in August. It is charged with improving communication between international players, local participants and the exchange, which oversees transactions through a central counterparty model.
Chamberlain said that he hopes the association will help to answer market participants’ questions and address their needs.
Meanwhile, the RMA is working on its first ever Latin American securities lending conference. The event will be held in Brazil in May 2014.
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