PREVIEW-BM&FBovespa 2nd-qtr profit seen rising 17.8 pct

* Q2 profit seen rising 17.8 pct on trading volume gains

* Foreign investment in stocks, IPOs help boost volumes

* Algorithmic trading boosts derivatives

SAO PAULO, Aug 10 (Reuters) - BM&FBovespa, the world's
fourth-largest exchange operator by market value, is expected to
report higher second-quarter profits because of an increase in
derivative and stock trading volumes, a Reuters survey showed on
Monday.

Net income should rise to 290.1 million reais ($156.9
million), according to the average forecast of seven analysts in
the poll. BM&FBovespa (BVMF3.SA) reported a profit of 246.3
million reais in the second-quarter of 2008.

The recovery in Brazilian capital markets, with a surge in
stock offerings since late June and greater risk appetite for
interest rate and currency derivatives, has helped boost
BM&FBovespa's revenue. Chief Executive Edemir Pinto said in an
interview in May that trading volumes should rise to a record in
2009.

"Revenue will probably continue to reflect the recovery in the
stocks and derivatives exchanges," Itau Securities said in a
report.

Stock offerings in Brazil, which fizzled in 2008 after surging
to a record in 2007, have gained steam in recent weeks with the
sale of nearly 18.32 billion reais in shares since late June,
including the record-setting IPO of credit-card processing company
VisaNet VNET3.SA.

Continued inflows from overseas investors have also helped
fuel a 56 percent surge in the benchmark Bovespa stock index
.BVSP since it reached a three-month low in early March.

Net foreign investment inflows to Brazilian stocks totaled 2.2
billion reais in July, with inflows since the beginning of the
year at 12.3 billion reais as fund managers flocked to local
equities. Overseas investors also bought 7.84 billion reais worth
of shares from initial public offerings and other stock sales.

Trading volumes of interest rate futures and currency
contracts have also gained steam as the BM&FBovespa began offering
algorithmic trading for derivatives. The company's move to fire
600 people since September to cut costs also helped improved the
bottom line, analysts said.

Here are the forecasts for BM&FBovespa's results, in millions
of reais:
---------------------------------------------------------------
BM&FBovespa Q2/2009 Q2/2008 CHANGE YR/YR
---------------------------------------------------------------
PROFIT 290.1 246.3 17.8 PCT

($1=1.849 reais)

(Reporting by Elzio Barreto)