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Trading: Algos add up in Brazil

Leading banks launch new platforms; Volatile market presents challenges

In Brazil algorithmic trading platform are becoming essential for banks that aspire to provide a complete global trading offering to their clients.

UBS launched a set of execution algorithms to institutional investors in mid-November 2009. Bank of America Merrill Lynch and Credit Suisse have also launched platforms in recent months and are gradually increasing client numbers.

Owain Self, head of algorithmic trading for EMEA and the Americas at UBS, says: "As time goes by it is increasingly clear that as more and more clients come onto these algo platforms there will be an increase in fragmentation, with smaller slices of orders hitting the market. This will make the use of algorithms and their associated efficiency more of a necessity than an option."

He adds: "Algorithmic capabilities for Brazil are a big focus for everyone, especially the global banks. This is what the clients want and so we must provide it. It’s as much about avoiding the loss of a client as it is about gaining a new one."

Client demand
Steve Schneider, head of Latin America equities at Bank of America Merrill Lynch, says: "The client interest and uptake on our Brazilian algorithm offering has exceeded our expectations.