Brazil: The Brazilian Markets

Background:

The São Paulo stock exchange (Bolsa de Valores de São Paulo) and the Brazilian Mercantile & Futures Exchange (Bolsa de Mercadorias e Futuros) were integrated in 2008 in one single company to constitute the BM&FBOVESPA, which stands as the only securities, commodities and futures exchange in Brazil, and therefore the driver of the Brazilian capital markets, as the exchange states on its webpage.

BM&FBOVESPA’s story goes back to 1890 with the foundation of the first securities market. Although it has gone through several stages to arrive to its current form, the Bovespa stands as the most developed stock market in Latin America. The last few years have seen a resurging in the Bovespa’s importance, including the firm going public in 2007 and the incorporation of the Novo Mercado, a special listing for firms that agree to comply with stricter corporate governance rules and standards than those established by law.  This allowed to lower the perception of risk in the Brazilian markets, and to renew the demand for Initial Public Offerings (IPO’s). In 2009, the BM&FBOVESPA saw the second highest IPO ever recorded.