B3 (B3SA3) has gained a new competitor, the A5X exchange, created by former XP Inc executives and founder of the brokerage Ideal. According to analysts at Goldman Sachs, in a report published this Wednesday (19), the announcement adds a new layer of risk to B3.

Despite this, for analysts, competitive risks are already partially reflected in the discounted share valuation of 12.9x ’24E P/E (price to earnings). The recommendation is neutral.

Goldman also highlighted that revenues from listed assets contribute to FICC and equities and represented 32% of B3’s total revenue in 2023. Thus, the value represents approximately 8% from shares and 24% from FICC.

“We note that OTC derivatives represented about 3% of revenue, but the company already faces competition in this segment,” they said.

Furthermore, these revenues grew at a CAGR of 16% from 2016 to 2023, driven by a CAGR of 21%, offset by a 4% annual decline in the average rate per contract.

With this, analysts highlighted that, in a possible exchange, A5X would have to create its own listed company contracts and not just replicate B3’s contracts. According to the bank, this should limit the potential impact on the stock market.

Does A5X threaten B3?

Two former partners at XP Inc, a lawyer, and the co-founder of brokerage Ideal are seeking to launch a company operating in the Brazilian stock market by the end of 2026, with an initial focus on derivatives and futures.

The group announced a Series A round to finance investments in team and technology for the operational launch of A5X, which will have trading and post-trading solutions for the financial and capital markets.

The founders are Carlos Ferreira, former controlling partner of XP; Julian Chediak, capital markets lawyer, professor, partner at Chediak Advogados and former chairman of the Cetip Self-Regulation Council; Karel Luketic, former senior partner and director at XP; and Nilson Monteiro, CEO and co-founder of Ideal.

“With recent regulatory changes, countless technological innovations impacting the sector, and a turbulent global landscape, A5X was created to improve the experience of all investors in Brazil,” said Ferreira, CEO of A5X, in a statement.

*Com Reuters