ICE Futures to Grade Brazilian Coffee - Analyst Blog


According to media release, IntercontinentalExchange Inc. ( ICE ) will start grading Brazilian arabica coffee by ICE Futures U.S. from June this year. IntercontinentalExchange will allow the Brazilian coffee to be traded at 900-point differential under par.  Back in December 2010, the company announced the delivery of the coffee beans from the world's largest coffee-producing country, Brazil.

The opportunity for delivering coffee "C" futures contracts will come up in March next year. However, the issuance notices will commence a month prior to the delivery.

In a separate development, IntercontinentalExchange recently entered into an agreement with Cetip, S.A., to develop a brand new platform for trading Brazilian corporate and government bonds. Cetip is the top-rated clearing house in Brazil, besides being the principal operator of registration and custodial services for securities, fixed-income bonds and OTC derivatives. This fixed income trading platform is expected to go live in the latter half of this year.

Recently, ICE Futures Europe, the UK arm of IntercontinentalExchange was selected by the UK Department of Energy & Climate Change to carry out the aviation allowances formalities and auctions for Phase III of the EU Emissions Trading Scheme (EU ETS) on behalf of the UK Government.

These expansions are insync with the company's long-term strategy of gaining a significant foothold in the emerging markets.

NYSE Euronext Inc. ( NYX ), a rival of IntercontinentalExchange, recently announced the commencement of repo futures market trading, in a bid to enhance its efficiency in the US futures market starting July 16 this year. However, the launch awaits requisite regulatory approvals.

We retain our long term Neutral recommendation on IntercontinentalExchange. The quantitative Zacks #3 Rank (short-term Hold rating) for the company indicates no clear directional pressure on the stock over the near term.

INTERCONTINENTL ( ICE ): Free Stock Analysis Report
NYSE EURONEXT ( NYX ): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: ICE , NYX

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