Bovespa Index

The BM&F Bovespa is a stock exchange based in Sao Paulo. It was ounded in 1890 by Emilio Rangel Pestana and has a long history of services to the Brazilian economy. Today the Bovespa, which calls itself "The New Exchange," is the fourth largest exchange in The Americas. It is the 13th largest exchange in the world in terms of market capitalization.

The BM&F Bovespa exchange was created in 2008 when the Sao Paulo Stock Exchange (Bovespa) merged with the Brazilian Mercantile and Futures Exchange (BM&F). The BM&F Bovespa is linked to all Brazilian exchanges, including the Rio de Janeiro Boverj (BVRJ), which only trades government bonds. The most commonly watched indicator is the Indice Bovespa, made up of 50 stocks from the 500 companies traded on the exchange.

The Brazilian exchanges were all state-owned until the mid-1960s and brokers were appointed by the government. Reforms of the nation's financial system began in 1965 and the Bovespa began to take the institutional role that it holds today.

Since the 1960s the Bovespa has been helped by the growth of technology. In 1972, Bovespa was the first Brazilian stock market to begin an automated system to send and receive information on-line and in real time via a computer network. The Bovespa is a completely electronic market, with all trades being conducted through electronic trading.

Starting in 1999 the Bovespa began a program that allowed small-sized and medium-sized brokers access to the market. The "Home Broker" system allows users to users to enter and exit trades via the Internet.

The Bovespa's equities and fixed-income markets traded up 14.7 percent in 2008. The number of trades increased by 62.9 percent to 61 million. The average number of daily trades increased by 60.3 percent over the previous year. More than 800 new investment clubs were created in 2008 and the average number of investors exceeded 500,000, with nearly 200,000 placing their orders through the Home Broker system.

The Bovespa ended 2008 down 41.2 percent at 37,550 points. The best performing stocks were Nossa Caixa ON (up 200 percent), Brasil T PAR ON (up 31.3 percent, Trans Paulista PN (up 20.74 percent) and Natura ON (up 18 percent). Big losers for the year were Rossi Resid ON (down 83 percent), Aracruz PNB (down 80 percent) and Gol PN (down 77.2 percent).

Bovespa Index Articles - by BetterTrades