Stock Market Guide to the Sao Paulo Stock Exchange
The São Paulo Stock Exchange or BOVESPA is Brazil's only stock trade center as well as the largest stock exchange throughout Latin America. In fact, it accounts for almost 70% of the trade volume in the region. Brazil's stock exchange has a highly developed technological infrastructure. BOVESPA is a member of the International Organization of Securities Commissions (IOSCO), World Federation of Exchanges (WFE) and Federacion Iberoamericana de Bolsas (FIAB). The São Paulo Stock Exchange was established on 23 August 1890 and has extensive experience on the capital market of rendering services to Brazil's economy. Prior to the mid 1960s, BOVESPA along with other exchanges in Brazil were actually linked to state government finance departments.
Present legislation in Brazil permits the São Paulo Stock Exchange to trade with stocks and securities which have been issued by publicly-held companies. These companies must register with the Brazilian Securities and Exchange Commission. The exchanges are also authorized to trade in stock future contracts, stock call and put options and debentures. There is frequent trading of BOVESPA-listed company stocks, corporate bonds, subscription warrants and fund quotas, stock options and rights and subscription receipts. Also offered for trade are depository receipts of stocks given from Mercosur member country companies.
If we look back to how the stock market in Brazil ended in November 2006 we can see that there was a positive performance for three months in a row. The Bovespa Index or Ibovespa saw a 6.7 % appreciation nominally speaking and 5.6 % in dollar terms. Foreign investors were very active take up 33.32% of the trading volume in November. Institutional investors came in second, making up 28.01%. Individual investors followed on with 25.89 %. The end of the month saw a 7.8% increase in the market capitalization of all of BOVESPA’s listed companies. Top companies listed on the Sao Paulo Stock Exchange include Petrobras (oil and gas); Ipiranga Petróleo (oli and gas); Telemar (telecommunications); Vale do Rio Doce (mining) and AmBev (food and beverages).