The Brasil Bolsa Balcão S.A, commonly known as B3 and is one of the world’s largest financial market infrastructure provider by market value has published its fourth quarter and full year 2018 financial results.
The year, 2018 marked the first full year result for B3 and has managed to achieve a strong financial performance during the period. The B3 exchange came into existence after the merger of three separate exchanges, São Paulo Stock Exchange (Bovespa), the Brazilian Mercantile and Futures Exchange (BM&F) and CETIP. The exchange provides trading in all financial instruments including FX, stock indices, interest rates, commodities and more.
The full-year revenue for B3 is reported at R$5.352 billion ($1.42 billion) in all business segment, representing an increase of 20.6 per cent year-on-year. The BM&F segment during the period generated an average daily volume of 3.7 million contracts in 2018, a growth of 20.8 per cent compared to 2017.
The BM&F segment has the highest trading volume of contracts in Interest rate Brazilian real (BRL), with more than 1.9 million contracts, representing a rise of 2.3 per cent year-on-year. The strong volumes were mainly contributed due to the volatility and uncertainty in the market fueled by a reduction in interest rates in 2017 and the Brazilian elections in 2018.
The Interest Rates in USD contracts volume for FX Rates has been boosted by 31.6 per cent, due to the demand for hedging against exchange rate variations. The average daily volumes for FX Rates in 2018 were 690,100 contracts, an increase of 27.4 per cent from 541,800 contracts in 2017.
The revenue per contract (RPC) also managed to climb higher by 7.3 per cent year-on-year for the BM&F segment in 2018. Higher revenue realisation was mainly driven by 17.1 per cent appreciation in USD against BRL. More specifically, the average RPC for FX rates was R$3,355 ($890.50) in 2018 and RPC for interest rates in USD also grew by 18.6 per cent year-on-year.
In the fourth quarter of 2018, the average daily volume in the derivatives market (BM&F segment), came in at 3.7 million contracts, reporting a growth of 15.6 per cent compared to the final quarter of 2017. The growth in the final quarter was mainly driven by 41.7 per cent increase in the volumes of Interest rates in USD and 26.7 per cent year-on-year growth in FX rates. The trading volume for stock indices also doubled during the final quarter.