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This Is the Buy Side’s No. 1 Pick for Trading in Latin America

II’s Latin America Trading Team has returned to rank the region’s top trading and execution providers.

A difficult year was not without its silver linings for the top trading team in Latin America. 

“It was indeed a challenging year for all markets and Latin America was not different,” said Guilherme Martins, global of head sales and trading at BTG Pactual. “However, we managed to have a stellar year, helped by historically low rates as a catalyst for volumes but also great primary activity: IPOs, follow-ons, as well as M&A activity involving listed companies.”

Another highlight, according to Martins, was the growth in the number and size of local funds in the region. “Today, we can easily price deals with local demand only, something unimaginable two to three years ago,” he said.

BTG Pactual navigated these obstacles and opportunities and was recognized by its clients with the No. 1 ranking in Institutional Investor’s 2021 Latin America Trading Team survey. The firm also topped II’s rankings of this year’s best sales and research teams. 

After a one-year hiatus, II polled traders of Latin America equities and asked them to rank brokers on various attributes for execution and trading services. These scores were aggregated to recognize the best overall providers across high-touch, electronic, portfolio/program, and Delta One/ETF trading in the region. 

JPMorgan Chase & Co. placed second in the survey, followed by BofA Securities. Santander and XP Investimentos took fourth and fifth, respectively. 

In line with other II surveys, these results were weighted by each respondent’s secondary commission spend in the region to produce commission-weighted weightings.

In addition to placing first overall, BTG Pactual took the top spot in high-touch sales trading. JPMorgan was first in electronic trading. For portfolio/program and Delta One/ETF trading, BofA securities was ranked No. 1. 

For BTG Pactual, adapting amid the global Covid-19 pandemic was a “pretty fast adjustment,” according to Martins. “Clients were at home trying to figure out the home office set up, and we were ready to provide the best level of service when they needed it the most.” Martins credits BTG Pactual’s long-tenured team of traders for the bank’s success, and reports that the firm gained considerable market share during the peak of the crisis.  

BTG Pactual recently added a trader to its New York team, but Martins says the firm tends to have a very low level of turnover and has avoided the industry’s trend toward “juniorization,” with substantial seniority on all positions. “In our case, clients typically have more than one good relationship on the desk,” he added.

For traders, there is a universal focus on sourcing adequate liquidity, Martins said, as well as on access to information. “To provide liquidity to our clients we definitely benefit from our current set up: local presence in every relevant market in Latin America,” he said. “Actionable block liquidity plus top-notch technology gets the job done.” 

Looking forward for the region, Martins believes the single-digit interest rates will remain for the foreseeable future and will continue to drive financial deepening in the region as a busy political season looms, including presidential elections this year in Chile, Ecuador, Honduras, Nicarauga, Peru, and Brazil next year. “We expect equity volumes to continue to benefit from this trend,” Martins said. “The upcoming presidential election next year [in Brazil] will undoubtedly bring major volatility, which should provide an added boost to volumes.”

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