BNA - AFM

BNA:
Business Portfolio
April, 2009
Content
Company Overview
•
•
•
Our Company
CRCBNA
Operation scheme
Business Portfolio
•
•
•
Registry Operations
Physical (Spot Market and Forward Contracts)
Financial Operations
Current Projects
•
•
•
•
Prices
Derivatives
Repos on Trust Certificates
Securitization
BNA Market Advantages
Valores en Evolución
Content
Company Overview
•
•
•
Our Company
CRCBNA
Operation scheme
Business Portfolio
•
•
•
Registry Operations
Physical (Spot Market and Forward Contracts)
Financial Operations
Current Projects
•
•
•
•
Prices
Derivatives
Repos on Trust Certificates
Securitization
BNA Market Advantages
Valores en Evolución
BNA
Our Company
Trading of physical products: agricultural, agroindustrial and
other commodities.
Investment Opportunities through a variety of financial
instruments that provide liquidity to finance productive
activities.
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BNA: Legal Framework
Law 965/05: General framework for the development of capital markets and
stock and commodity exchanges.
Decree 1511/06: Regulation of commodity exchanges
Decree 1340/08: Standardization as requirement for commodity contracts to
be considered as securities.
The legal framework allows BNA to trade the following products:
• Commodities (i.e. agricultural, industrial, mining, oil, gas and derivatives, energy,
weather and climate, etc.)
• Securities with commodities as underlying assets
• Government Agencies Procurement
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Main Shareholders
BNA is a public company which shares are negotiated in the Colombian Stock Exchange
(BVC).
Recently (last year) a private offering of shares for current stockholders and BNA
Brokerage Firms was issued. The totality of the offering was demanded.
The increase in capital allows BNA to invest in R&D of new products as well as in
technological development.
BNA MAIN SHAREHOLDERS
Shareholder
Percentage
Ministry of Agriculture
11.83%
Mercapital
9.99%
Interbolsa S.A.
9.98%
Valores Incorporados
9.97%
Tecfin
7.23%
Marco Polo
6.92%
Opciones Bursátiles
6.24%
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BNA Price at the Colombian Stock Exchange
BNA Stock
IGBC Index
Source: BVC
After BNA´s IPO in October 2007, BNA´s stock has exceded that of the market.
After the second stock offering, BNA´s price has increased in 90%.
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Clearing
CRCBNA
CRCBNA is a private company, subsidiary of BNA, that provides
clearing and settlement to the transactions held at BNA.
•
Margin account management and guarantees.
•
Counterparty for all financial operations taken place at BNA.
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Clearing
CRCBNA: Guarantees System
Guarantees System
Basic Guarantee
•
Margin Calls
•
An initial margin must be transfer to the CRCBNA in order to assure the compliance of the operation, face to the price volatility
expected.
A margin call is made every time the price volatility exceeds the initial margin.
Credit Guarantee
•
Depending on the delivery and payment condition on the spot market, the CRCBNA is able to demand credit guarantees.
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World Trends
Recent trends show that former specialization in commodity
exchanges tend to disappear.
• Internationalization of operations
• Mergers and Business Alliances
Exchanges are becoming businesses developers.
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CLAIM
Order:
FIRM
• Producers
• Agro-industrials
• Traders
• Associations
•Investors
BROKERAGE
CLAIMERS
Operations at BNA
• Buy/Sell
• Funding
• Investment
Operación at BNA
Disciplinary
Camera
• Sanctions
SELF REGULATION
monitoring
• Investigations
Monitoring
Area
• Operations
• Arbitral Camera
Quality Control
• Standards Committee
• Guarantees
Administrator
• Counterparty in
financial
operations
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Content
Company Overview
•
•
•
Our Company
CRCBNA
Operation scheme
Business Portfolio
•
•
•
Registry Operations
Physical (Spot Market and Forward Contracts)
Financial Operations
Current Projects
•
•
•
•
Prices
Derivatives
Repos on Trust Certificates
Securitization
BNA Market Advantages
Valores en Evolución
BNA
Product Portfolio
PORTFOLIO
OMAS (Trading floor)
OR (Registration)
PHYSICAL
PRODUCTS
MCP
AVAILABLE
FORWARDS
FINANCIAL
PRODUCTS
PRIVATE
AVAILABLE
REPOS
MAC
TERM CONTRACTS
FORWARDS
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Financial Return Index of the BNA
The iRent reflects the average return on the BNA´s financial market, represented by
the Repo on CDM´s and the Term Contracts.
Market Rates
Active Interest Rate
iRent
DTF (Passive)
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Volume Operations BNA
Million Dollar
Business Portfolio
1. ORS
2004
2005
2006
2007
Aug-08
1,636.43
1,721.47
2,160.78
3,532.36
4,695.32
2. OMAS
588.53
585.80
618.20
681.63
1,051.17
2.1. Physical
180.18
200.69
186.01
240.73
150.76
46.54
54.11
7.42
3.02
4.44
0.00
30.21
23.57
23.27
19.97
133.64
111.34
74.27
54.14
69.53
2.1.4. MCP Forward
0.00
5.02
66.29
159.12
56.82
2.1.5. Hedge Forward
0.00
0.00
14.45
1.17
0.00
2.2. Financial
92.00
66.62
115.97
190.75
163.53
2.2.1. Repo on CDM’S
53.27
43.28
76.91
88.04
60.04
0.56
0.31
5.11
4.15
1.62
2.2.3. CAT
16.02
8.71
10.92
18.10
13.90
2.2.4. CGT
0.00
0.00
3.96
18.99
24.78
2.2.5. CPT
3.30
3.05
4.70
14.58
18.37
18.86
11.27
14.36
44.90
38.07
0.00
0.00
0.00
2.00
6.76
316.35
318.50
316.22
250.15
736.88
2,224.96
2,307.27
2,778.98
4,213.99
5,746.49
2.1.1. Physical Available
2.1.2. Physical MCP
2.1.3. Forward
2.2.2. Repo on Invoices
2.2.6. Secondary Market
2.2.7. Repo on Government
Incentives
2.3. MAC
TOTAL
Fuente: BNA
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Business Portfolio
Registry Operations
According to Decree 574 /2002 by registering
operations related to agro industrial activities
in their natural form or processed in a first
degree allows the withholding tax to be
defer.
These operations
brokerage.
They are perfected by the registry of the
invoice.
These operations can be made without being
physically present at the BNA.
can
be
executed
Registry Operations 2008
by
Products
Volume
(USD Millions)
%
Livestock Products
937
16.2%
Rice
373
6.5%
Yellow Corn
270
4.7%
Export Type Flowers
263
4.6%
Seeds
108
1.9%
Coffee
85
1.5%
Wheat
49
0.9%
Wood Products
48
0.8%
Others
3.638
63.0%
TOTAL
5.772
100%
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Physical Operations
Government Agencies Procurement Market-MCP
BNA is an alternative for government agencies to avoid long sealed biding processes
for the procurement of their supplies.
Agro industrial Market
•
•
•
Products and services negotiation with agro industrial origin or destination
Current annual volume in excess of COP $400 billion (over USD $ 185 million)
Market potential calculated in COP $2.5 trillion (USD $ 1.16 billion).
Uniform Goods Market
•
Decree 2474/2008 allows BNA to trade these products since April 2008. Any product
that can be described with a set of uniform characteristics can be traded (i.e. paper,
computers, fuel, construction materials, et cetera). Current market potential
estimated in COP $12 trillion (USD $5.6 billion).
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Physical Operations
Government Agencies Procurement Market-MCP
MCP – Spot Market 2008
Advantages
Agility:
Quick response to its needs.
Transparency:
Price settled by auction.
Economy:
Low prices as a result of
multiple sellers.
MCP – Forward Contracts 2008
Prices Guarantee:
Guarantees administration by
the CRCBNA in order to
prevent high volatility prices.
Quality:
The Technical Department
from the BNA certificates the
quality of the product.
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Physical Operations
Spot Market
Available products commercialization.
Exchange must be completed 30 days
from operation date.
Spot Market 2008
Advantages
Price transparency
Easy commercialization
Reference prices development
Products
Yellow Corn
Others
Seeds
Metals
Rice
Crude Palm Oil
TOTAL
Volume
(USD Mmillion)
1,77
0,82
0,38
0,30
0,26
0,24
3,76
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Physical Operations
Forward Contracts
Anticipated buy and sell of products and/or crop.
In these operation the product does not necessarily
need to be available at the moment of the
transaction. The delivery and payment of the
transaction can be made between 30 and 360 days.
Forward Contracts 2008
Advantages
Seller:
•
Anticipated
pacification
commercialization,
Production
Buyer:
•
Supply pacification.
•
Incertitude reduction on product access.
•
Guarantees administration by the CRCBNA.
Products
Sugar
Corn
Oil
Cotton
Others
Rice
TOTAL
Volume
(USD Million)
27,37
12,52
9,88
3,62
2,83
2,36
58,59
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Products Portfolio
Financial Operations
Repo Operations
Repos on CDM
Repos on Invoices
Repos on Government
Incentives
Standardized Term Contracts
Poultry Term Contract
Cattle Term Contract
Pork Term Contract
Export Contracts
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Average Interest Rate
BNA Financial Operations
iREnt
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Financial Operations
Repos on CDM
Repos on CDM 2008
Repurchase agreement, which a seller of a
CDM (Certificados de Depósito de Mercancías
- Certificate of Warehoused Merchandise)
compromises to buy it back at a later date
(within 360 days) for a mutually agreed rate.
A CDM allows its holder (owner of the
merchandise) to have immediate financial
resources through a Repo traded in the BNA
scenario. The primary market has an annual
volume of COP $182 billion (USD $85 million).
Products
Rice
Coffee
Others
Cotton Fiber
Polypropylene Resins
Wheat
TOTAL
Volume
(USD Millions)
30,23
28,16
10,67
6,78
3,07
1,18
81,10
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Financial Operations
Repos on CDM Interest Rate
Average Interest Rate
Repo on CDM
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Financial Operations
Repos on Invoices
Repos on Invoices
Repos on Invoices 2008
Repurchase agreement of invoices of
agricultural or agro-industrial related
products, where the buyer commit
himself on the payment of the
obligations after the effective delivery of
the products by the seller of the invoice.
The primary market has an annual
volume of COP$8 billion (USD$3.7
million).
Productos
Agrochemical
Frozen Meat
Woods
Others
TOTAL
Volume
(USD Million)
0,83
0,48
0,06
0,02
1,39
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Financial Operations
Repos on Invoices Interest Rate
Average Interest Rate
Repos on Invoices
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Financial Operations
Repos on Government Incentives
Repo on Government Incentives
Repurchase agreement on government
incentives. The legal recipient of the
incentive gives the buyer the right to
receive the final payment in exchange
for a discount on the incentive value.
The primary market has an annual
volume of COP $11 billion (USD $5.1
million).
Repos on Government
Incentives 2008
Products
Incentive Rights
Others
Banana
Flowers
TOTAL
Volumen
(USD Million)
4,92
0,13
0,10
0,06
5,21
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Financial Operations
Term Contracts
Poultry Term Contract
(CAT)
Cattle Term Contract
(CGT)
Pork Term Contract
(CPT)
COP$37 billion (USD$17
million) annual volume
COP $59 billion (USD $27
million) annual volume
COP $42 billion (USD $19
million) annual volume
Characteristics:
Standardized
Reduced costs
Contracts meet specific needs of the industry
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Term Contracts
Cattle Term Contract - CGT
Features of the Contract:
Object:
Growing or fattening of
males on grazing from the species Bos
indicus, Bos taurus, Bubalus bubalis.
Quantity: 5.000 Kg.
Terms:90, 120, 150, 180, 210, 240, 270, 300
or 360 days.
Price: BNA
Calculation
from
different
geographical sources of thin cattle prices.
Volume
Interest Rate
The seller is responsible for the custody and
the growing or fattening of the cattle.
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Term Contracts
Poultry Term Contract - CAT
Features of the Contract :
Object: One day poultry fattening, the final
weight is 2.000 grams by poultry.
Quantity: 20.000 one day poultries.
Term: 90 days.
Price: BNA calculation from Fenavi prices.
The seller is responsible for the custody and
the growing or fattening of the poultries.
Volume
Interest Rate
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Term Contracts
Pork Term Contract - CPT
Features of the Contract :
Object: Growing and fattening of 20-22 Kg
porks, the final weight is 100 kg by pork.
Quantity: 100 porks.
Term: 105 days.
Price: BNA calculation from pork auctions
information.
The seller is responsible for the custody and
the growing and fattening of the porks.
Volume
Interest Rate
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Financial Operations
Export Contracts
Object: Selling of an Export Contract payment right agreed with an international Import
company. The primary market has an annual volume of COP $3,8 billion (USD $1.6 million).
Terms: 30, 60, 90, 120 and 150 days.
Advantages:
•
Export activity funding in previous periods of the product shipping.
•
CRCBNA clearing, investor security.
•
The Export Contract is not standarized on quantity, allowing the exporter to obtain exactly the funds he needs.
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Financial Operations
Export Contracts
Export Contracts 2008
Volume
Productos
Volume
(USD Million)
Coffee
2,29
Wood
0,08
TOTAL
2,38
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Content
Company Overview
•
•
•
Our Company
CRCBNA
Operation scheme
Business Portfolio
•
•
•
Registry Operations
Physical (Spot Market and Forward Contracts)
Financial Operations
Current Projects
•
•
•
•
Prices
Derivatives
Repos on Trust Certificates
Securitization
BNA Market Advantages
Valores en Evolución
Current Projects
Prices Information System
The BNA is looking forward to be the market commodities prices
provider, publishing reliable reference information for all its members
(sellers, buyers, producers, investors).
Advances:
• I-Rent: Average interest rate index from all the financial operations made at
the BNA market.
• Cattle Index: Developed by the BNA, important participation of the tradeunion.
Current Prices Projects:
• Agreements with different companies, entities and trade unions, in order to
construct and publish reference prices.
– Creation of new reference prices.
– Publication of the existing prices.
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Current Projects
Derivatives
BNA is in the process of creating a Futures Market
(commodities and financial), that allow investors the
posibility to expand their investment portfolios into a
new market, and will allow the industry to cover against
price changes.
New Markets
• Energy
• Metals
• Minerals
• Biofuel
• Weather
• Indexes
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Current Projects
Derivatives
Non Delivery Electricity Future
Coverage operation that allows the agents in the electrical
industry to compnsate against variation in the electricity price at
XM (Electricity Exchange).
Investors who want to assume the risk can also use the product to
speculate.
Market Potential: $476 million dollars per year.
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Current Projects
Repos on Trust Certificates
Repurchase agreement, which a seller of a Trust Certificate, formed by commodities,
compromises to buy it back at a later date (within 360 days) for a mutually agreed rate.
A Trust Certificate allows its holder (owner of the trust) to have immediate financial
resources through a Repo traded in the BNA scenario.
Operator
Structuring
Trust Fund
Custody
Producers
Trust
Certificate
Brokers
(Buyers)
Brokers
(Sellers)
Counterparty
Investor
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Current Projects
Securitization
The new legal framework united with BNA´s experience securitizasing agro industrial
assets, allows BNA to initiate the process of design and negotiation of securitization
structures for long term production products.
Advantages on CDOs – Collateral Debt Obligations:
•Producer:
–Financing Access
–Long Term Capital Low Cost
–Adjustable Capital and Interest Schedule
–Technique
Operator
Structuring
Trust
Fund
•Investor:
–Long Term
–Risk Management
Custody
Producers
Advantages on Participation Issuances:
Securities
•Producer:
–Shared Risk
•Investor:
Brokers
(Buyers)
Brokers
(Sellers)
Investor
–Activity profits
Counterparty
Valores en Evolución
Content
Company Overview
•
•
•
Our Company
CRCBNA
Operation scheme
Business Portfolio
•
•
•
Registry Operations
Physical (Spot Market and Forward Contracts)
Financial Operations
Current Projects
•
•
•
•
Prices
Derivatives
Repos on Trust Certificates
Securitization
BNA Market Advantages
Valores en Evolución
BNA Charges
Annualized BNA and CRCBNA Charges:
Charges on Financial Operations
BNA Register
Product
Clearing Charges
Buyer
Seller
Buyer
Seller
Term Contracts
0.21%
0.21%
0.315%
0.63%
Repos on CDM
0.21%
0.21%
0.315%
***
Export Contracts
0.6%
0.6%
0.315%
0.315%
Repos on Invoices
0.63%
0.63%
0.315%
0.315%
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BNA Charges
Annualized BNA and CRCBNA Charges:
Charges on Physical Operations
BNA Register
Products
Clearing Charges
Buyer
Seller
Buyer
Seller
Spot Market
Natural:
0.075%
Processing: 0.1%
Natural:
0.075%
Processingo: 0.1%
0.079%
0.079%
Spot Market - MCP
Natural:
0.1575%
Processingo: 0.21%
Natural:
0.1575%
Processing: 0.21%
0.1575%
0.1575%
Forward Contracts
0.075%
0.075%
0.131%
0.131%
Forward Contracts - MCP
0.1575%
0.1575%
0.2625%
0.2625%
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BNA Market Advantages
Market
Public scenario (sellers, buyers, producers, investors).
Transparency
Easy commercialization
Free Access Information
BNA/CRCBNA
CRCBNA looking for the compliance of the operation
CRCBNA Guarantees administration
CRCBNA Counterparty, security
Quality standards on the spot market
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BNA Market Advantages
Also, the BNA has:
•
Standards Committee: in charge of verifying that all financial an physical products fulfill minimums standards
for market security.
•
Arbitral Camera: in charge of conflict resolution
•
Self regulation Area: in charge of verifying the compliance of in force rules and regulation, by the brokerage
firms, the BNA and its members.
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Todos los derechos reservados por la
BOLSA NACIONAL AGROPECUARIA S.A.
Calle 113 No. 7-21 Torre A Piso 15 • PBX: 6 29 25 29 • Bogotá D.C. - Colombia.
www.bna.com.co
Valores en Evolución