presentation - lunch merrill lynch - november 2009

7/30/2019 Presentation - Lunch Merrill Lynch - November 2009

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1

BM&FBOVESPANovember 2009


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2

Forward Looking Statements

This presentation may contain certain statements that express the managements expectations, beliefs and assumptions

about future events or results. Such statements are not historical fact, being based on currently available competitive,

financial and economic data, and on current projections about the industries BM&F Bovespa works in.

The verbs anticipate, believe, estimate, expect, forecast, plan, predict, project, target and other similar

verbs are intended to identify these forward-looking statements, which involve risks and uncertainties that could cause

actual results to differ materially from those projected in this presentation and do not guarantee any future BM&F

Bovespa performance.

The factors that might affect performance include, but are not limited to: (i) market acceptance of BM&F services; (ii)

volatility related to (a) the Brazilian economy and securities markets and (b) the highly-competitive industries BM&F

Bovespa operates in; (iii) changes in (a) domestic and foreign legislation and taxation and (b) government policies related

to the financial and securities markets; (iv) increasing competition from new entrants to the Brazilian markets; (v) ability

to keep up with rapid changes in technological environment, including the implementation of enhanced functionality

demanded by BM&F customers; (vi) ability to maintain an ongoing process for introducing competitive new products and

services, while maintaining the competitiveness of existing ones; (vii) ability to attract new customers in domestic and

foreign jurisdictions; (viii) ability to expand the offer of BM&F Bovespa products in foreign jurisdictions.

All forward-looking statements in this presentation are based on information and data available as of the date they weremade, and BM&F Bovespa undertakes no obligation to update them in light of new information or future development.

This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be

any sale of securities where such offer or sale would be unlawful prior to registration or qualification under the securities

law. No offering shall be made except by means of a prospectus meeting the requirements of the Brazilian Securities

Commission CVM Instruction 400 of 2003, as amended.


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3

1. MACRO ENVIRONMENT

2. EXCHANGES INDUSTRY

3. IT DEVELOPMENTS

4. OPERATIONAL HIGHLIGHTS

5. TRENDS AND STRATEGIES


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4

(1,0)

0,0

1,0

2,0

3,0

4,0

5,0

Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09

GDP Annual Growth (%) - Expectation

2009 2010

4,1

4,4

4,7

5,0

5,3


Brazilian CPI (%) - Expectation

2009 2010

Macroeconomic Environment

Source: Central Bank Focus survey and Central Bank statistics.

231

4.46

4.27

4.83

0.2

44.0

42.0

30

33

36

39

42

45


Public Sector Net Debt to GDP Ratio (%)

Expectation

2009 2010

0

50

100

150

200

250

Dec-98

May-99

Oct-99

Mar-00

Aug-00

Jan-01

Jun-01

Nov-01

Apr-02

Sep-02

Feb-03

Jul-03

Dec-03

May-04

Oct-04

Mar-05

Aug-05

Jan-06

Jun-06

Nov-06

Apr-07

Sep-07

Feb-08

Jul-08

Dec-08

May-09

Oct-09

International Reserves (actual) -USD billions


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5

Standard & Poors

Investment Grade

04.30.08

Fitch

Investment Grade

05.29.08

Moodys

Investment Grade with

positive outlook

09.22.09

Source: Bloomberg.

Macroeconomic EnvironmentEmerging Markets CDSs Spreads 5 years

BRAZILS CREDIT RISK IS BACK TO THE PRE-CRISIS LEVEL WHEN THE COUNTRY RECEIVED THE INVESTMENT

GRADE FROM S&P AND FITCH


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6

PRE-SALT OIL RESERVES

Positive perspectives in terms of investments in Brazil

Petrobrass Current Production: 2,050 thousand

barrels per day

Pre-Salt Oil Production (barrels/dayths)

2013 . 219

2015 . 582

2017 . 1,336

2020 . 1,815

Source: Central Bank Focus survey

35.0

25.0

Source: Petrobras

77 93 77

-150

102

2004 2005 2006 2007 2008

Trade Balance

Net Imports/Exports

ThousandBarrels/day

1.855

2.680

3.920

1.945 2.257

2.876

1.779

2.270

3.012

2008 2013 2020

Oil Production - Brasil Domestic Demand - Oil Derived

Processed Oil

Growth on domestic production will drive more exports

NEW INVESTMENTS PERSPECTIVES IN BRAZIL WITH THE EXPLOITATION OF OIL RESERVES IN THE PRE-SALT

Foreign Investments and the New

Brazils Oil Perspectives


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3. IT DEVELOPMENTS




8/50888

Diversified and Integrated

Exchanges

Integrated Derivatives

Exchanges

* Do not provide pos-trading services for the equity market

Listed Exchanges Business Model

Diversified but Not

Integrated Exchanges*


9/50999

20.819.6

16.915.2

7.9 7.1 6.3 5.4

4.1 3.9 2.9 2.0

67.2%

77.1%

59.1%

68.0% 68.4%

48.4%

64.9%

84.0%

63.2%

50.2%

70.8%

52.5%

0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

70,0%

80,0%

-

5

10

15

20

25

30

CME HExK Deutsche

Boerse

BVMF ICE Nyse

Euronext

SGX ASX LSE Nasdaq BME TMX

Market Capitalization (US$ billions) and 2008 EBITDA Margin (%)

EBITDA Margin 2008

Listed Exchanges

Date: 11/11/2009

Diversified and integrated Derivatives Diversified but not integrated

Majority of Integrated Exchanges above 60% EBITDA Margin


10/50101010

Listing

(stocks, bonds, funds,

asset-backed securities,

among others)

CommoditiesCertification

Trading

(stocks, derivatives, corporate and government

bonds, funds, spot US Dollar, among others)

Central Counterparty (CCP)

Clearing and Settlement

(for all the products)

Services for Issuers and

Commodities tradingTrading, Clearing and Depository Activities

Central Depository(stocks and corporate bonds)

Securities Lending

(stocks and corporate bonds)

Custody

(services provided for

funds, and other market

participants)

Market Data

Indices Licensing

Software Licensing

(used by brokerage

houses and other

market participants)

Other Services

OTC Derivatives

Registration and

Collateral Management

Fully Integrated Business Model


11/50111111

Central Depository

Clearing (CCP)

Trading on the Exchange

BRAZIL USA

BVMF

BVMF

BVMF

DTCC

DTCC

NYSE Nasdaq

BATS Direct Edge

TRF Dark Pools

Beneficial Owner Level

Broker Level

All the tradesmust be

matched on an

exchange

environment

BrokerBrokers can internalize

orders

Equity Market Settlement StructureBrazil compared with USA


12/50121212

US Exchanges and Trading VenuesMarket share

US CONSOLIDATED EQUITIES VOLUME BREAKDOWN (OCT09)

Source: Rosenblatt Securities Inc. Trading Talk


13/50131313

83.3%

56.3%

15.0%

32.1%

0.1%

11.6%

1.56%

NYSE BVMF

Broker Commission Exchange / Trading fee Clearing/ Settlement and Custody Regulatory Fees

Trading

Clearing

CCP

Central Depository

Securities Lending

By Broker:

Intermediary in the

trading activity

By Broker:

Intermediary in the

trading activity

Clearing

Securities Lendings

activity

Counterparty risk on the

Internalization of

orders*

Trading

* Not allowed according to Brazilian regulation

ASSUMPTIONS:

1.COMPANY X S.A. (ADR) 1MM Shares Price: USD 16.00 exchange rate as of 7/7/2009

2.Brokerage commissions reflect different types of electronic executions

All-in Transaction Cost ComparisonBRAZIL x USA

Services offered to investors: Services offered to investors:


14/50141414

28.9%

25.1%

13.5%

32.5%

Oct09

Source: Bloomberg (in USD traded value of 35 companies with ADRs programs Level 2 and Level 3.

Novo Mercado

Launching

End of CPMF

(Financial

Transaction Tax)Sarbanes-Oxley Act

(SOX)

*Updated until 11/12/2009

54.1%

45.9%

Brazilians Stock Trading Breakdown

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Jan-08

Feb-08

Mar-08

Apr-08

May-08

Jun-08

Jul-08

Aug-08

Sep-08

Oct-08

Nov-08

Dec-08

Jan-09

Feb-09

Mar-09

Apr-09

May-09

Jun-09

Jul-09

Aug-09

Sep-09

Oct-09

Other USA Venues -Brazi lian ADRs NYSE -Brazi lian ADRs BM&FBOVESPA -companies with ADRs BM&FBOVESPA (except companies with ADRs)

2001 2002 2003 2004 2005 2006 2007 2008 2009* TotalIPOs - 1 - 7 9 26 64 4 4 115Follow ons 14 5 8 8 10 16 12 8 16 97Total 14 6 8 15 19 42 76 12 20 212

Dual Listings - - - 2 1 1 - - 1 5

Public Offerings in Number of Companies


15/50151515

2,208

2,035

1,933

2,201

Sep/01 - Oct/19 Oct/20 - Nov/12

Buys Sells

Foreign Investor Trading (Buys and Sells)

7.8% drop in buys and 13.9% expansion in sells of foreign investors in BOVESPA Segment between

the two periods: Sep/01-Oct/19 and Oct/20-Nov/12

ADRs

ADRs traded volume in US grew more than the same Stocks traded volume in the BOVESPA segment

between Sept/01- Oct/19 and Oct/20 Nov/16

* Includes only dual listed companies except Santander

Average of Foreign Investors Trading*

(Sep-Oct09 BRL millions)

Stocks and ADRs ADTV*

(USD billions)

* Does not include the Santander IPO because it was considered as a FDI

IOF Effects


16/50161616

ADR terminations have been growing after the IOF implementation

Issuances and Terminations of ADR Programs (BRL billions)

10 Most Traded ADR Programs* Other ADR Programs Less Liquid*

* Does not include Santander ADRs

IOF Effects


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3. IT DEVELOPMENTS




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Customer DistributionIntermediary

(CM / Broker)BM&FBOVESPA

Traditional

DMA(Aug 08)

DMA ViaProvider(Dec 08)

Access Via

Broker

DMA Via

Co-location(Jun 09)

Open Outcry

GTS

GTSFIX Gateway

GLOBEX GTS

Order routing(Sep 08)

NET

GLOBEX

NETDMA

Provider

Remote access monitoring

and maintenance

Application for Co-locationNET

Marco PoloBloombergCedro

(ended on June 30th, 2009)

BM&F SegmentDirect Market Access (DMA) Development

Direct

Connection(Oct 09)

NET

NET


19/50191919

Structure where the equipment is installed

(switches and servers)

Co-location Service:

BM&F Segment Jun09 BOVESPA Segment Nov09

Contracting Modalities:

Brokerage House Co-location

Only the broker can access the rack where its

servers are installed

Investor Co-location

Only the investor can access the rack where its

servers are installed

Co-location Development

Co-location

BM&F Segment (Jun09) and Bovespa

Segment (4Q09)

12 hacks hired e 2 active participants

Average Daily Traded Volume via Co-location(thousands of contracts)


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DMA Evolution CME-Globex Evolution

Algotraders Fast growth

BM&F SegmentDMA and CME Order Routing Evolution

Trading Volumes Evolution Participation per type of contract


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212121

NSC V900

New Multi Gateway

MEGABOLSA STATION

SLE

SCOM, SNEG, SCOT

User DistributionIntermediary

(CM/Broker)BM&FBOVESPA

BVMF / HP

NYSE EuronextGL Trade

Traditional

DMA

Via DMA

Provider

Access Via

Intermediary

Via DMA

Co-location

Bloomberg TradeBook

Others

Homebroker

GLWIN

Any ISV

NETWORK

NETWORK NETWORK

RTT Oct09 1 1016 50

HUB

NETWORK

DMA Provider

Remote access tracking and maintenance

Application of Co-location (ATS)NETWORK

268454299RTT Jan09 135

2H09

RTT May09 54 10153 584

(May,2009)

(Oct09)

(4Q09)

(4Q09)

Bovespa SegmentTrading System Development

l


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GTS

Investor

Single

Trading

Screen

ONE FRONT END

SOLUTION

(To be delivered in

4Q09)

Single FIX Protocol

interface: cost

reduction for market

participants

Trading Systems

(Mega Bolsa and GTS)

BM&FBOVESPA

Clearing House

CLEARING HOUSES

INTEGRATION

(Kick-off of theproject)

The integration will

allow cross margining

and improvement of

risk and cash

management

Mega BolsaGTS

Investor

Mega Bolsa

GTS / Sisbex

FX

Mega Bolsa

SecuritiesDerivativesEquities

CURRENTLY AFTER

Trading

Clearing

New IT DevelopmentsTrading and Post Trading Integrations


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Main developments in 3Q09

BM&FBOVESPA Communication Network (RCB): complement to the RCCF services

BM&F Segment: Cedro authorization as a DMA Provider

Main developments and concluded projects in 4Q09

MegaDirect (Oct09): will allow the hiring of ISVs (independent software vendors) and will reduce

latency to 16 milliseconds

Increased capacity at the equities clearing center (Nov09): from 770 thousand to 1.5 million trades

IT Projects


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3. IT DEVELOPMENTS



O ti l Hi hli ht


25/50

252525

931 952 716563

795614

1,128

911 740

1,215

772 689 805 822 648

571 564

570

434

353

401

384

415

491

452

427 494470 520

416

92 88

87

83

5981

80

8473

83

60 7772

135

86

161 161

170

156155

164

158

146159

129

133 116154

174

154

1Q08 2Q08 3Q08 4Q08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09*

BRL Int. Rate (Thousands) FX (Thousands) Index (Thousands) Others (Thousands)

Average Daily Traded Volume - ADTV (thousands of contracts)

Rate per Contract - RPC (BRL)

1,756 1,765

1,550

1,220

1,3621,260

1,7501,555

1,463

1,879

1,392 1,3771,500

1,651

Operational HighlightsBM&F Segment

1,304

*Updated until November 17, 2009

1Q08 2Q08 3Q08 4Q08 J-09 F-09 M-09 A-09 M-09 J-09 J-09 A-09 S-09 O-09 N-09*

Interest Rates in BRL 1,102 1,064 1,264 1,155 0,796 0,939 0,923 0,921 1,076 0,877 1,030 1,085 1,092 1,044 0,980

FX Rates 1,850 1,785 2,050 2,686 2,183 2,397 2,653 2,543 2,347 2,134 2,094 2,017 1,986 1,921 1,673

Stock Indices 2,132 2,460 2,159 1,792 1,323 1,792 1,564 1,901 1,569 1,838 1,505 1,745 1,406 1,575 1,286

Interest Rates in USD 1,078 1,057 0,955 1,767 1,417 1,469 1,790 1,859 1,691 1,331 1,282 1,208 1,062 0,979 0,959

Commodities 3,283 3,892 3,814 3,069 1,622 2,298 2,344 2,411 2,372 2,299 2,264 2,528 2,554 2,764 1,970

Web Trading 0,155 0,160 0,160 0,173 0,171 0,189 0,192 0,206 0,186 0,197 0,181 0,181 0,164 0,151 0,142

OTC 2,057 2,322 2,580 2,421 1,646 2,358 3,175 1,588 2,118 1,522 1,460 2,059 1,282 1,432 0,908

Total RPC 1,401 1,381 1,593 1,778 1,213 1,484 1,361 1,440 1,547 1,230 1,374 1,440 1,363 1,340 1,191

O ti l Hi hli ht


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Average Daily Traded Value - ADTV (BRL Billions)

Daily Average Number of Trades (Thousands)

Number of Custody Accounts(Thousands) Turnover Velocity** (12 months average)

**Relation of the trading value in the cash market and the market cap of the exchange

Operational HighlightsBovespa Segment

30.8% 29.4%36.8% 37.6% 38.7%

42.3%

56.4%63.2%

66,4%

2001 2003 2004 2005 2006 2007 2008 2009

*Updated until November 17, 2009

508

540 551 559 548 543 538579

1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 Oct'09

5.96.5

5.34.3

3.6

4.1 4.04.9 5.4 5.4 4.9 5.4

5.6

7,3 7,0


205 230245 296 266 280 288 296

345 335 319 344 340

436 408


B S t


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272727

0

100

200

300

400

500

600

700

Trades via Home Broker (Internet based DMA for retail investors)

represented 20.0% from the total volume traded in Oct/09

Allows DMA access (via Internet) to retail investors

Integration with HomeBroker

HOME BROKER PARTICIPATION TREASURY DIRECT

The educational programs sponsored by BM&FBOVESPA have already

reached over half a million people in more than 7 years

ETFs ADTVINVESTOR ACCOUNTS

Launch of Exchange Traded Funds (ETFs) in partnership with BNDES

(Brazilian Development Bank also participated in the conception of PIBB

Index) and with Barclays Bank (responsible for managing the IShares)

BRL millionsThousands

Bovespa SegmentRetail Investors

0%

5%

10%

15%

20%

25%

30%

35%

Jan-03 Oct-03 Jul-04 Apr-05 Jan-06 Oct-06 Jul-07 Apr-08 Jan-09 Oct-09

% traded value % number of trades

Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09

8.8

5.3

11.4

20.3

22.023.5

21.7 21.5

26.6 25.6

0

20

40

60

80

100

120

140

160

180

0

500

1.000

1.500

2.000

2.500

3.000

3.500

Assets Value (BRL mill ions) Investors (thousands)

Bo espa Segment


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Bovespa SegmentCapital Raised Activity

Public Offerings in 2009

21 public offerings in 2009 (5 IPOs e 16 Follow-On)*, raised more than BRL 43.7 bi, as follow

In 3Q09, 7 public offerings were executed (1 IPO and 6 Follow Ons), adding up to BRL 10.6 bi

In 4Q09, 10 offerings were settled (3 IPOs and 7 Follow Ons), representing BRL 20.9 bi

Pipeline

Also, there are 6 additional Offers (5 IPOs and 2 Follow Ons) in the pipeline

IPOs (4): Brazilian FR, Aliansce, Fleury and IMC

Follow-On (2): EDP and Anhanguera Educacional

IPOs (4)

Visanet (BRL 8.4 bi),

Tivit (BRL 575 mi),

Direcional* (BRL 250 mi)

FOLLOW-ON OFFERINGS (16)

Redecard (BRL 2.2 bi),

MRV (BRL 722 mi),

BR Malls (BRL 836 mi),

Light (BRL 772 mi),

Hypermarcas (BRL 794 mi),

Brasil Foods (BRL 5.3 bi),

Natura (BRL 1.5 bi),

Multiplan (BRL 792 mi),

Bco Santander (BRL 13.2bi)

Cetip* (BRL 766 mi)

PDG (BRL 1.1 mi),

Rossi (BRL 928 mi),

Gol (BRL 1 bi),

Brookfield (BRL 665 mi),

CCR* (BRL 1.1 bi),

Iguatemi* (BRL 388 mi) e

Cyrela* (BRL 1 bi)

Marfrig* (BRL 1.4 bi)

Until November 18th, 2009. * Preliminary Data

Public Offerings (BRL billions)

Operational Highlights


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25% 23% 25% 26% 25%31% 34% 33% 34% 31% 32% 29% 29% 31% 31% 31%

27% 30% 29% 27% 28%24%

24% 23% 24% 25% 24% 26% 26%27% 26% 25%

36% 35% 35% 35% 35% 36% 34% 35% 34% 36% 37% 37% 38%33%

33% 34%

2% 2% 2% 4% 2%3% 2% 2% 2%

2% 2% 3% 2% 2% 2% 2%10% 10% 8% 8% 9% 6% 6% 7% 7% 6% 5% 6% 5% 6% 8% 9%

2006 2007 1Q08 2Q08 3Q08 4Q08 Jan -09 Feb-09 Mar-09 Apr-09 May-09 Jun -09 Jul-09 Aug -09 Sep -09 Oct-09Individuals Institutional Investors Foreign Investors Companies Financial Institutions Others

51% 49% 49% 49% 47% 44% 49% 48% 47% 46% 47% 44% 45% 43% 44% 42%

25%23% 23% 22% 23%

22% 21% 19% 23% 24% 22% 26% 25% 27% 27% 27%

15% 17% 17% 18% 19% 21% 19% 19% 18% 19% 20% 19% 20% 19% 20% 22%

7% 9% 8% 7% 8% 9% 8% 10% 9% 9% 9% 8% 7% 9% 7% 7%

2% 2% 3% 3% 3% 3% 3% 3% 3% 2% 3% 3% 3% 2% 2% 2%

2006 2007 1Q08 2Q08 3Q08 4Q08 Jan -09 Feb-09 Mar-09 Ap r-09 May-09 Jun -09 Jul-09 Aug -09 Sep -09 Oct-09

Financial Institutions Institutional Investors Foreign Investors Individuals Companies Central Bank

Bovespa Segment (Investors Participation in Total Value)

BM&F Segment (Investors Participation in Total Volume)

Operational HighlightsInvestors Participation in Total Volume

Bovespa Segment


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303030

* Updated until November 10, 2009 (includes regular trades and public offering).

Bovespa SegmentForeign Investment Flow

-1.0

0.9

-0.6

6.0

2.9

-2.8

-7.3

5.3

-1.8

-4.7

-1.2-0.4 -0.6

0.51.4

5.7 6.1

4.2

5.5

2.5

5.2

6.3

0.8

Monthly Net Flow of Foreign Investments* (in BRL billions)


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3. IT DEVELOPMENTS



BM&F Segment


32/50

323232

Main initiatives to increase volumes

Back Office: support in FCMs back and middle office solutions development (to be deployed in 1Q10)

Potential to increase the number of foreign investors trading BM&F contracts

Collaterals abroad: pending authorization by the Brazilian Central Bank for the Ibovespa future contracts

It is included in the agenda of discussions with the government

High-frequency traders: fast growth in the last months

12 algotraders are already trading and responded for 6.0% in the overall volume in Oct09

CFTC Authorization: authorization for US investors to trade Ibovespa future contracts (approved on

August 26th, 2009)

Increase in the ADTV of Ibovespa futures contracts

BM&F SegmentDrivers

Bovespa Segment


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Bovespa SegmentDrivers

* Until October 2009.

Turnover Velocity

Slight decline in the period (Nov08 Oct09) of the

Turnover Velocity, however it reached 77.7% in

Oct09

Growth in algotrading, retail trading, market makers

and additional offerings should drive further

increases in turnover velocity

Turnover Velocity Evolution* (12 months)

Algotrader: implementation of DMA Models 2, 3 and 4 (DMA via Provider, Direct Link and Co-

location)

Public Offerings: BRL 43.7 bi in capital raised (5 IPOs and 16 Follow-on) and 6 other in the pipeline

Individual Investors: potential to increase the volume traded given the new economic environment

and the marketing campaigns

Institutional Investors: potential to increase due to the migration of savings to equity funds and

raising the limit for Pension Funds to invest in Equity to 70%

Bovespa Segment


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343434

62%73%

30%19%

7% 8%

Total Total without Previ

Fixed Income Equity Others

PENSION FUNDS INVESTMENTS BREAKDOWN 2Q09

In September, 2009, the limit the pension funds are allowed to invest in stocks increased from 50% to 70% of their

total portfolio

BRL 455 billion BRL 327 billion

Source: ABRAPP.

Bovespa SegmentInstitutional Investors Pension Funds


35/50

353535

Nasdaq MOU signed on Oct/23 and valid until Dec/31, comprising:

Order Routing:

The development of an order routing system between the exchanges;

Market Data:

The development of a commercial agreement providing for NASDAQ OMX to distributeinternationally, on a non exclusive basis, the prices of the securities (market data) traded in

BM&FBOVESPA, and for BM&FBOVESPA to distribute, on a non exclusive basis, the prices of the

securities traded in NASDAQ OMX;

Corporate Services:

The development of a commercial agreement providing for BM&FBOVESPA to offer, to publicly

traded Brazilian companies, products and services developed by NASDAQ OMX, which are designed to

support and facilitate the activities of publicly traded companies, such as those related to investors

relations (IR), structuring and management of board of directors, issuance of press-releases and

communications to the market and analysts; and

IT Cooperation:

The evaluation of technology cooperation opportunities for the two exchanges

Latin America Exchanges Partnerships:

Chile

Colombia

Peru

Mxico Argentina

Main Initiatives


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363636

APPENDIX


37/50

373737

279.6 262.0

3Q08 3Q09

68.3% 68.4%

138.1 132.5 130.0109.0

3Q08 3Q09 3Q08 3Q09

235.6 245.8315.9 337.3

3Q08 3Q09 3Q08 3Q09

Historical Record on Trading Volume: the cash market segment registered

BRL 7.3 billion average daily traded volume in Oct09

CME-Globex and Algotraders: Globex routing and Algotraders

represented 4.7% and 6% from BM&F Segments volume in Oct09,

respectively

BOVESPA Segment Trading System: latency reduction to 16 millisenconds

and capacity increase to 1.5MM matches per day in post-trading (Nov09)

Nasdaq conversations: memorandum of understandings until Dec09

HIGHLIGHTS

Net Income (BRL Millions)EPS (GAAP): BRL 0.12 in 3Q09 and Adjusted EPS: BRL 0.165 compared with

BRL 0.155 in 3Q08 (Pro forma)

Adjusted Net Income (adjusted by non-cash items)*: 6.8% higher when

compared with 3Q08

Net revenues: dropped 6.5% from 3Q08

EBITDA Margin: 68.4% in 3Q09 versus 68.3% in 3Q08

Cost Savings adjusted expenses*: decreased by 16.2% between 3Q09 and

3Q08

Dividends: BRL 150 MM, BRL 0.074 per share, payment on Nov/24

* i)Adjusted net income in 3Q09 excludes stock options plan and impacts from deferred

liabilities tax. In 3Q08, adjusted net income excludes the net impact of goodwill amortizationexpenses; and ii) Adjusted expenses excludes depreciation and stock options plan costs

3Q08 Pro Forma and 3Q09 GAAP

3Q08 Pro Forma Adjusted* and 3Q09 Adjusted*

3Q09 EARNINGS

EBITDA (BRL Millions) / EBITDA Margin (%)

Operational Expenses (BRL Millions)

Highlights from 3Q09 and 3Q08 (Pro Forma)


38/50

383838

Trading and Settlement

BM&F Segment: 20.9% drop compared with 3Q08, mainly as a result of lower ADTV, which retreated 8.3%

BOVESPA Segment: 1.6% lower than 3Q08, as a result of a retreat by 2.1% in the ADTV

Other Operational Revenues: 19.9% growth versus 3Q08

Depository: grew by 5.7% vs. 3Q08, mainly as a result of the new pricing policy implementation (May09)

Vendors: 22.5% increase vs. 3Q08 (new pricing policy starting from Apr09)

Access: 91.4% higher than 3Q08 (new pricing policy started in 1Q09)

Listing: 27.6% higher than 3Q08, due to new annual fee pricing (Jan09)

Securities Lending: fell by 28.3% vs. 3Q08

Gross Revenues Breakdown 3Q09

Revenues

BM&FTrd. /

Sttmnt31%

BovespaTrd. /

Sttmnt52%

OtherOperatingRevenues

17%

BRL thousands 3Q093Q08

(Pro Forma)2Q09

% Change

3Q09 /

3Q08

% Change

3Q09 /

2Q09

Gross Operational Revenues 426,505 455,824 420,581 -6.4% 1.4%

BM&F Trd. / Sttmnt 132,707 167,832 146,210 -20.9% -9.2%

Bovespa Trd. / Sttmnt 221,594 225,291 203,931 -1.6% 8.7%

Other Operational Revenues 72,204 60,202 67,981 19.9% 6.2%

Depositary and custody 16,780 15,868 16,214 5.7% 3.5%

Vendors 14,111 11,523 17,490 22.5% -19.3%

Trading access (Brokers) 10,654 5,565 10,214 91.4% 4.3%

Listing 9,562 7,496 9,332 27.6% 2.5%

Securi ties Lending 8,866 12,368 7,463 -28.3% 18.8%

Bol sa Bra si lei ra de Merca dori as 3,535 1,752 1,250 101.8% 182.8%

Bank 2,194 802 2,052 173.6% 6.9%

Others 6,502 4,828 3,966 34.7% 63.9%

Dividends - 2,499 2,459 0.0% 0.0%

Net Operational Revenues 382,995 409,666 378,242 -6.5% 1.3%


39/50

393939

Personnel

48%

Data

processing

18%

Dep. and

Amort. 9%

Other

25%

Adjusted Operational Expenses*: 16.2% contraction vs 3Q08

The biggest variations derive from the following expenses :

Adjusted Personnel**: 6.2% fall between 3Q09 and 3Q08

IT: 34.2% reduction vs. 3Q08

Third Party Services: 18.3% reduction vs 3Q08

Operational Expenses 3Q09

Expenses

* Exclusions: In 3Q09: stock options plan (BRL 11.9 million) and depreciation

In 2Q09: stock options plan (BRL 13.4 million) and depreciation

** Exclusions: In 3Q09: stock options plan (BRL 11.9 million)

In 2Q09: stock options plan (BRL 13.4 million)

BRL thousands 3Q093Q08

(Pro Forma)2Q09

% Change

3Q09 / 3Q08

% Change

3Q09 / 2Q09

Operational Expenses (132,502) (138,068) (128,198) -4.0% 3.4%

Personnel (63,883) (55,364) (66,337) 15.4% -3.7%

Data processing (24,233) (36,843) (20,494) -34.2% 18.2%

Deprec. and Amortization (11,546) (8,030) (9,887) 43.8% 16.8%

Third Party Services (9,370) (11,470) (9,703) -18.3% -3.4%

Communications (6,219) (4,287) (5,249) 45.1% 18.5%

Marketing (5,841) (5,336) (5,475) 9.5% 6.7%

Maintenance (2,750) (2,972) (2,566) -7.5% 7.2%

Board Compensation (1,184) (1,267) (1,572) -6.6% -24.7%

Supplies (713) (928) (580) -23.2% 22.9%

Leases (558) (1,200) (665) -53.5% -16.1%

Taxes (495) 1,916 (339) -125.8% 46.0%

Other (5,710) (12,287) (5,331) -53.5% 7.1%

Adj. Operational Expenses* (109,019) (130,038) (104,865) -16.2% 4.0%

Adj. Personnel** (51,946) (55,364) (52,891) -6.2% -1.8%


40/50

404040

511 488 450

53 116

2007 2008 2009eCost Reduction Actual (cash expenses)

Adjusted Operational Expenses*: BRL 109 million in 3Q09 and BRL 316.9 million in 9M09

In line with OPEX budget of BRL 450 million for FY09: (excluding depreciation and stock option

plan expenses)

Adjusted Operational Expenses* (BRL millions)

Expenses

Cost cuts associated with 2007 expenses** (BRL millions)

* In 3Q09 and 2Q09 excludes depreciation and stock options expenses and in 1Q09 and 9M09 excludes depreciation, stock options and severance expenses

** 2007 Operational expenses as adjusted for inflation and OPEX budget excludes depreciation and stock options

E


41/50

414141

1,113

1,0591,064

3Q08 2Q09 3Q09

Headcount reduction in Mar09 : 4.4% lower than 3Q08

Stock Options Expenses: BRL 11.9 million in 3Q09

Severances: BRL18 million in 1Q09, BRL 4.4 million in 2Q09 and BRL 1.4 million in 3Q09

Union Bargain: 5% increase in Aug09

Total: 55.4

Total: 85.5

Total: 66.3 Total: 63.9

Personnel Expenses (BRL millions)Headcount

Expenses

Fi i l Hi hli ht


42/50

424242

Cash and Cash Equivalents

Cash and Cash equivalents (short- and long-term) at the end of the quarter to Sep09 amounted

to BRL 3.2 billion (11.3% higher than 2Q09), comprised of third-party collaterals worth BRL 980.0million, deposited with our clearing centers, and BRL 540.4 million in own financial resources of

restricted use for being tied to our clearing structure. This increase in cash position from the

second quarter is due mainly to a 24.2% variation in cash margin deposits made by participants

and the cash flow generation in the period.

Deferred Liabilities

Deferred liabilities are a result of deferral of BRL 79.6 million related to a transitory adjustment ofthe tax benefit derived from amortization of goodwill in the quarter to Sep09, with no impact on

cash flow

Financial Income

BRL 57 million in 3Q09, 16.1% below 3Q08, reflecting the cuts in the interest rates that

remunerate financial investments, falling from BRL 93.7 million in 3Q08 to BRL 65.9 million in

3Q09 Climbed 4.0% when compared to the 2Q09 (BRL 54.9 million)

Cash distributions

Distribution of dividends of BRL 150.0 million, equivalent to BRL 0.07489354 per share. This cash

distribution will be paid to shareholders on November 24th, 2009 based on ownership positions as

of November 12th, 2009

Financial Highlights

Di id d d I t t C it l


43/50

434343

Dividends and Interest on Capital

3Q09 Payout

Payment of BRL 150 million as dividends

9M09 Payout

Payment of BRL 437 million, as dividends and interest on equity capital, representing 66.1% of GAAP

net income

BRL thousands 1Q09 2Q09 3Q09 9M09

Gaap Net Income 226,980 188,130 245,766 660,876

Interest on Capital and Dividends 112,000 175,000 150,000 437,000

% of Net Income 49.3% 93.0% 61.0%

% Accumulated 49.3% 69.1% 66.1%

BVMF3 St k P f


44/50

444444

BVMF3 PARTICIPATES IN 6 INDICES

Ibovespa 4.448%

ITAG 5.433%

IGC 5.735%

MLCX 3.099%

IBRX 2.917%

IBRX-50 3.374%

(*) Turnover velocity refers to the annualized correlation between volume traded on the cash market in the period and market capitalization for the same

period, on a monthly basis.

BVMF3 Stock Performance

57%74%

99%

61% 63% 60% 56%68% 69% 70% 72% 67% 65% 63%

80%

144%

303%

341%

220%

255%

201% 209% 194%

227% 232% 227%

158%

172%

162%

239%

0%

50%

100%

150%

200%

250%

300%

350%

400%Turnover Velocity (Market vs. BVMF3)*

Overall Market BVMF3

B d M b (2009 2010)


45/50

454545

Armnio Fraga (Chairman)* - Gavea Investimentos

Marcelo Fernandes Trindade (Vice-Chairman)* - Lawyer

Claudio Haddad* - Ibmec

Fabio de Oliveira Barbosa* - Vale

Jos Roberto Mendona de Barros* - Economist and Consultant

Rene Marc Kern* - General Atlantic

Renato Diniz Junqueira Intercap

Candido Botelho Bracher Itau BBA

Luis Stulhberger Credit Suisse Hedging-Griffo

Craig Donohue CME Group

Julio Siqueira de Arajo Bradesco

* Independents

Board Members (2009 2010)

BOARD MEMBERS

B l Sh 09/30/2009


46/50

464646

Balance Sheet 09/30/2009

09/30/09 % 06/30/09 % Variation

Current assets 2,936,914 1 3.8% 2,569,664 12.3% 14.3%

Cash and cash equivalents 2,701,557 12.7% 2,335,424 11.2% 15.7%

Other credits 235,357 1.1% 234,240 1.1% 0.5%

Non-Current assets 18,355,944 86.2% 18,366,580 87.7% -0.1%

Long-term receivables 664,783 3.1% 693,092 3.3% -4.1%

Financial investments 517,480 2.4% 557,641 2.7% -7.2%

Other credits 147,303 0.7% 135,451 0.6% 8.8%

Investments 1,319,747 6.2% 1,318,238 6.3% 0.1%

Property and equipment 266,010 1.2% 255,718 1.2% 4.0%

Intangible assets 16,105,404 75.6% 16,099,532 76.9% 0.0%

TOTAL ASSETS 21,292,858 100.0% 20,936,244 100.0% 1.7%

09/30/09 % 06/30/09 % Variation

Current liabilities 1,407,729 6.6% 1,215,927 5.8% 15.8%

Collateral for transactions 979,974 4.6% 789,011 3.8% 24.2%

Others 427,755 2.0% 426,916 2.0% 0.2%

Non-current 226,667 1.1% 146,951 0.7% 54.2%

Minority interest in subsidiaries 16,412 0.1% 15,382 0.1% 6.7%

SHAREHOLDERS' EQUITY 19,642,050 92.2% 19,557,984 93.4% 0.4%

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 21,292,858 100.0% 20,936,244 100.0% 1.7%

ASSETS - CONSOLIDATED (BRL Thousands)

LIABILITIES AND SHAREHOLDERS'EQUITY - CONSOLIDATED (BRL Thousands)

Summary of Financial Statements


47/50

474747

In 3Q09, the net impact from the adjustments on the bottom

line amounted to BRL 91.5 million, composed by 2 non-cashitems:

BRL 79.6 million added Recognition of deferred

liabilities related to the goodwill amortization in 3Q09;

BRL 11.9 million - Stock Options Plan;

In 3Q08, the net income was adjusted by the goodwill

amortization expense in BRL 80.3 million.

NET INCOME RECONCILIATION

BRL millions 3Q093Q08

(Pro Forma)

Variation

3Q09/3Q08

Adjusted Net Income 337.35 315.91 6.8%

Adjustments

Deferred Liabilities 79.6

Stock Option Plan 11.9

Goodwill Amortization 80.3

Corporate Net Income 245.8 235.6 4.3%

Summary of Financial Statements

BRL thousands3Q09

3Q08

(Pro Forma)

% Change

3Q09 / 3Q08 2Q09

% Change

3Q09 / 2Q09 9M09

9M08

(Pro Forma)

% Change

9M09 / 9M08

Gross Operational Revenues 426,505 455,824 -6.4% 420,581 1.4% 1,199,004 1,390,243 -13.8%

BM&F Trd. / Sttmnt 132,707 167,832 -20.9% 146,210 -9.2% 406,087 478,497 -15.1%

Bovespa Trd. / Sttmnt 221,594 225,291 -1.6% 203,931 8.7% 583,721 725,104 -19.5%

Other Operational Revenues 72,204 60,202 19.9% 67,981 6.2% 201,366 179,595 12.1%

Dividends - 2,499 - 2,459 - 7,830 7,047 11.1%

Net Operational Revenues 382,995 409,666 -6.5% 378,242 1.3% 1,077,785 1,249,751 -13.8%

Operational Expenses (132,502) (138,068) -4.0% (128,198) 3.4% (409,460) (419,662) -2.4%

Income before Taxes 307,535 217,897 41.1% 304,901 0.9% 848,083 850,319 -0.3%

Income Tax and Social Contribution (544) (68,109) -99.2% 35,173 -101.5% 33,495 (304,445) -111.0%

Def. Inc.Tax and Soc. Contribution (60,196) 86,177 -169.9% (152,195) -60.4% (219,629) 86,177 -354.9%

Minority Interest (1,029) (354) 190.7% 251 -510.0% (1,073) (961) 11.7%

Net Income 245,766 235,611 4.3% 188,130 30.6% 660,876 631,090 4.7%

Net Margin 64.2% 57.5% 6.7 bp 49.7% 14.4 bp 61.3% 50.5% 10.8 bp

EBITDA 262,039 279,628 -6.3% 259,931 0.8% 698,709 853,819 -18.2%

EBITDA Margin 68.4% 68.3% 0.2 bp 68.7% -0.3 bp 64.8% 68.3% -3.5 bp

Adjusted Operational Expenses (109,019) (130,038) -16.2% (104,865) 4.0% (316,934) (395,932) -20.0%

Adjusted Net Income 337,348 315,905 6.8% 325,363 3.7% 908,450 764,914 18.8%

Bovespa Segment


48/50

484848

5.9 6.5 5.3 4.4 3.9 5.2 5.27.1 5.9 4.8

205 230 246297 278 326 334

428

228313

-

90

180

270

360

450

-

2,0

4,0

6,0

8,0

10,0

1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09* 9M08 9M09Trades(thansands)

ADTV(BRLbillion

s)

ADTV (BRL billions) Number of Trades (thousands)

Traded Volume Evolution and Number of Trades

Trading Margins (basis points)

* Until November 09th, 2009

Average Daily Traded Volume (BRL millions)

p gOperational Highlights

Market 3Q09 3Q08

Variation

3Q09/3Q08

(%)

9M09 9M08

Variation

9M09/9M08

(%)

Stocks and Derivatives 5,212.4 5,321.6 -2.1% 4,783.8 5,901.5 -18.9%

Cash Market 4,885.6 4,970.5 -1.7% 4,481.4 5,498.9 -18.5%

Derivatives 326.8 351.1 -6.9% 302.4 402.6 -24.9%

Forward market 113.0 174.5 -35.2% 84.2 212.6 -60.4%

Options market 213.8 176.6 21.1% 218.2 190.0 14.9%

Fixed income and others 2.1 4.2 -51.4% 1.6 6.1 -73.6%

Total 5,214.4 5,325.8 -2.1% 4,785.4 5,907.6 -19.0%

Market 3Q09 3Q08 9M09 9M08

Stocks and Equities Deriv. 6,6 6,5 6,5 6,6

Cash Equities 6,2 6,0 6,0 6,0

Derivatives 13,8 13,7 14,1 14,1

Forward 13,0 13,0 13,0 13,0

Options 14,3 14,3 14,5 15,3

TOTAL 6,6 6,5 6,6 6,6

BM&F Segment


49/50

494949

1.76 1.77 1.55 1.24 1.47 1.64 1.42 1.57 1.69 1.51

1.402 1.383 1.5991.792

1.345 1.389 1.391 1.316 1.458 1.375

0,00

0,50

1,00

1,502,00

-

1,00

2,003,00

1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09* 9M08 9M09

RPC(BRL)

ADTV(mill

ions)

ADTV (millions of contracts) RPC (BRL)

Traded Volume Evolution and Average Revenue per Contract (RPC)

Traded Volume Evolution Revenue per Contract - RPC (BRL)

* Until November 09th, 2009.

gOperational Highlights

Product 3Q09 3Q08

Variation

3Q09/3Q08

(%)

9M09 9M08

Variation

9M09/9M08

(%)

BRL Int. rate contracts 755.6 719.4 5.0% 857.2 864.6 -0.8%

USD Int. rate contracts 64.4 100.3 -35.8% 76.7 96.7 -20.6%

FX contracts 463.0 573.6 -19.3% 431.9 569.5 -24.2%

Index-based contracts 69.6 87.5 -20.4% 74.1 89.3 -17.1%

Commodity contracts 10.1 16.7 -39.2% 9.9 15.6 -36.4%

OTC contracts 8.8 12.5 -29.1% 7.8 13.5 -42.1%

Web Trading 50.7 41.8 21.5% 51.0 40.1 27.3%

Total 1,422.3 1,551.7 -8.3% 1,508.7 1,689.2 -10.7%

Product 3Q09 3Q08

Variation

3Q09/3Q08

(%)

9M09 9M08

Variation

9M09/9M08

(%)

BRL Int. rate contracts 1.068 1.263 -15.4% 0.961 1.135 -15.3%

USD Int. rate contr acts 1.178 1.004 17.3% 1.476 1.074 37.4%

FX contracts 2.031 2.054 -1.1% 2.247 1.901 18.2%

Index-based c ontracts 1.559 2.156 -27.7% 1.638 2.245 -27.0%

Commodity contracts 2.440 3.862 -36.8% 2.292 3.712 -38.3%

OTC contracts 1.485 2.637 -43.7% 1.738 2.336 -25.6%

Web Trading 0.175 0.161 8.9% 0.185 0.159 16.5%

Total 1.391 1.599 -13.0% 1.375 1.458 -5.7%


50/50

BM&F Bovespa Investor RelationsWeb page: www.bmfbovespa.com.br/ri

Phone numbers: (55 11) 2565 4007/4728 / 4729 / 4834 / 4418

E-mail: [email protected]

presentation - lunch merrill lynch - november 2009

Documents