The new resolutions 133, 134 and 135 of the CVM (Real Estate Securities Commission) should negatively impact the B3 (B3SA3), which needs to prepare for a more competitive market, evaluates the Great Investments.
The authority responsible for regulating the markets made two main changes: the definition of criteria for the best execution (better order execution) and regulation so that block trades (large lot trades) can now be traded outside the handbag.
The measure provides for the “possibility of trading block trades in OTC, allowing part of the volume traded on the stock exchange to be captured by other institutions”, explain Eduardo Nishio and Bruno Bandiera, analysts at the brokerage.
According to experts, the decision is “another of the short-term negative factors that weigh on the share price”. In addition to change, the environment macroeconomicthe drop in volumes traded on the Stock Exchange, competition risks and potential legal liabilities were already weighing on the securities.
B3 shares have accumulated a drop of almost 30% in 12 months, at around R$11.67, and are practically stable in the last month.
Long term
Despite the challenging environment, the brokerage firm maintains its buy recommendation for B3, with a target price of BRL 16 for actions – which indicates a high potential of about 39%.
In a long-term perspective, Nishio and Bandiera believe that eventually economic activity will return to normalized levels, with fees falling, “a scenario that would benefit most of B3’s products, reinforcing our constructive thesis for the company”.
In addition, experts argue that the most likely is the emergence of a new competitor with bilateral trading platforms or a multilateral platform that uses the company’s post-trading.
“Continuing the post-trade concentration at B3 would mitigate the impacts of greater competition in trading”, they argue.
In this scenario, the impact would be reduced, as only about 20% of the price of the B3 listed segment is justified by trading services and 80% by post-trading.
market monopoly
B3 (Brasil, Bolsa e Balcão) is a company that resulted from successive mergers with other companies in the stock market and trading.
Between 2000 and 2005, there was a national movement to integrate the Stock Exchanges that existed in the country.
There were nine companies operating options on the market, but after the merger between Bovespa (formerly the São Paulo Stock Exchange) and the Rio de Janeiro Stock Exchange, there was only one company responsible for transactions in Brazil.
In 2008, Bovespa merged with the Securities, Commodities and Futures Exchange (BM&F), responsible for trading commodities.
The company was called BM&FBovespa until 2017, when it merged with the Custody and Financial Settlement Center for Private Securities (Cetip), and B3 became what the market currently knows, with a monopoly in the stock exchange market in Braziland the largest stock exchange in the Latin America.
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Source: Moneytimes
I am an author at Global happenings and I mostly cover automobile news. In my time working in the automotive industry, I have developed a keen interest in the latest developments and trends. My writing skills have also allowed me to share my knowledge with others through articles and blog posts.
