UPDATE 1-BM&FBovespa capex, spending cut to boost results

* BM&FBovespa sees lower capex, spending boosting earnings

* Trading volumes seen rising on high-frequency, offerings

* Shares surge 7.2 pct after earnings beat estimates
(Adds details on capex and spending, comments)

By Elzio Barreto

SAO PAULO, May 12 (BestGrowthStock) – Brazil’s BM&FBovespa
(BVMF3.SA: ), the world’s third-largest exchange operator by
market value, expects a decline in spending and investments to
help boost its bottom line in 2010, Chief Executive Edemir
Pinto said on Wednesday.

Spending on software, servers and other network equipment
should fall around 5 percent from the 550 million reais ($310
million) set in the company’s 2010 budget, while capital
expenditure is seen down 10 percent from 302 million reais
initially estimated.

Most of the decline in capital expenditures is due to
delays in investments in a new data center that should have
started in the first quarter and a joint venture with
Chicago-based CME Group Inc (CME.O: ).

“The lower capex means better earnings and as a
consequence, more dividends, more EBITDA,” Pinto said in a
conference call with reporters.

BM&FBovespa shares surged 7.2 percent to 11.47 reais in
early afternoon trading, compared with a 0.7 percent gain in
the benchmark Bovespa index (.BVSP: ). The stock is down 5.1
percent so far in 2009, roughly in line with a 5.5 percent drop
in the Bovespa index.

Sao Paulo-based BM&FBovespa reported late on Tuesday its
first-quarter profit (Read more your timing to make a profit.) jumped 24.5 percent to 282.6 million
reais, beating the average forecast of 262.7 million reais
according to a Reuters poll of 12 analysts. [ID:nN11115547]

Trading of interest rate and currency futures contracts
surged 66.7 percent year-on-year in the first quarter, while
volumes for stocks and stock derivatives were up 68.9 percent,
BM&FBovespa said.

The rise in trading helped push revenue up 45 percent to
459.1 million reais.

Volumes should keep rising throughout the year as investors
using algorithmic and high-frequency trading strategies flock
to Brazilian securities, Chief Financial Officer Carlos Kawall
said.

Massive share offerings by state-run Banco do Brasil
(BBAS3.SA: ) and oil giant Petrobras (PETR4.SA: )(PBR.N: ) would also
boost stock trading, though lingering concerns about debt
problems in Europe may affect demand in the short-term, he
added.

“The outlook is hugely favorable, but we still have a very
volatile, uncertain period because of the outcome from the
international financial crisis,” Kawall said in the conference
call. “We have to take into consideration this risk element
also.”

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($1=1.775 reais)
(Reporting by Elzio Barreto; Editing by Tim Dobbyn)

UPDATE 1-BM&FBovespa capex, spending cut to boost results