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A Superior Marketplace. BOVESPA Highlights Founded in 1890 Self-regulatory organization supervised by the Brazilian Securities and Exchange Commission.

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Presentation on theme: "A Superior Marketplace. BOVESPA Highlights Founded in 1890 Self-regulatory organization supervised by the Brazilian Securities and Exchange Commission."— Presentation transcript:

1 A Superior Marketplace

2 BOVESPA Highlights Founded in 1890 Self-regulatory organization supervised by the Brazilian Securities and Exchange Commission – CVM Broad Product Base Fully accessible by international investors State-of-the-art technology Standard setter for corporate governance in Brazil Vibrant IPO market International Reference

3 EQUITY CASH Stocks BDRs REITs PRODUCTS Broad Product Base EQUITY DERIVATIVES Stock Options Index Options –on Bovespa Index –on IBrX Index Forward Contracts Warrants ETFs POP - Protected and Participative Investment FIXED INCOME Debentures Commercial Papers Mortgage-Backed securities Asset-backed securities (FIDC)

4 INDICES Extensive Benchmarking OVERALL MARKET INDICES IBOVESPA - BOVESPA INDEX –Companies representing 80% of the total trading value IBrX-50 – BRAZIL INDEX 50 –50 most liquid shares of the cash market IBrX - BRAZIL INDEX –100 most liquid shares of the cash market IVBX – Valor BOVESPA Index –50 companies on second tier governance issues SECTOR BASED INDICES IEE – ELECTRIC POWER INDEX –Most liquid companies of the electric power sector ITEL – TELECOMMUNICATIONS INDEX –All companies in the telecommunication sector INDX – INDUSTRIAL SECTOR INDEX –Industry most representative stocks CORPORATE GOVERNANCE INDICES IGC – CORPORATE GOVERNANCE INDEX –Companies traded in the Novo Mercado or Levels 1 and 2 ITAG – TAG ALONG COMPANIES’ INDEX –Companies that offer tag along rights to all shares ISE - CORPORATE SUSTAINABILITY INDEX –Companies committed to environmental, social and corporate governance issues

5 INTERNATIONAL INVESTMENTS A fully accessible market REGISTRATION AT CVM (Securities and Exchange Commission) –Registration granted in 24 hours –Online registration through the website –Registration form required (Basic Information) REQUIREMENTS – A local representative in Brazil – Assets must be deposited at a recognized depository service – Accounts hold under an authorized custodian – Tax ID number required (CNPJ) REGULATORY OVERVIEW – No restrictions in terms of the type of investments – No diversification rules – No minimum permanence period requirement – Final beneficiary market TAXATION – Exemption on capital gains for equity instruments and government bonds – Exemption of CPMF tax of 0.38% on inflows and outflows for equity instruments – Tax haven investors taxed as domestic investors

6 INVESTORS AT BOVESPA Participation in the trading value Source: BOVESPA

7 BOVESPA IN NUMBERS Daily Average Trading Value in USD million Source: BOVESPA

8 Latin American Exchanges Daily Average Trading Value in July 2007 Source: WFE – World Federation of Exchanges LEADERSHIP IN LATIN AMERICA

9 BOVESPA IN NUMBERS Options Market Source: BOVESPA, WFE – World Federation of Exchanges and ISE - International Stock Exchange Exchange # of contracts million Notional – US$ million 1st International Securities Exchange 347n.a. 2nd CBOE232n.a. 3rd São Paulo190478 4th Eurex178842 5th Philadelphia16864 Options on Equities Up to June 2007 Rank in 2006 Rank in 2005 ExchangeUnderlying Equity Millions traded 17Sao Paulo SEPetrobras PN207 22EurexAllianz39 33OMXEricsson B39 44ISEQQQQ37 51São Paulo SETelemar PN34 610EurexDeutsche Telekom 30 75São Paulo SENet PN22 8+20ISEIWM20 9+20São Paulo SEVale do Rio Doce PNA 19 1019ISESPY17 TOP 10 traded stock options in the world in 2006

10 TRADING INFRASTRUCTURE State-of-the-art technology 100% of the trades executed electronically with specialized trading systems for Equities, Equities’ Derivatives and Corporate Bonds; –MEGA BOLSA – Order driven system operated in more than 20 exchanges around the world; DMA Facilities (Direct Market Access) –HOME BROKER and Institutional Connection: 37% of the trades and 19% of the trading value (July/2007) –BOVESPA FIX – a platform developed specifically for bond trading; Trading system linked electronically, in real time basis, to the clearing and settlement system – all trades are locked in for settlement;

11 TRADING INFRASTRUCTURE A permanent challenge More than 1200 terminals connected to Megabolsa Our execution speed is in average fractions of a second At peak, the system processes over 200,000 trades and 1 million orders per day Daily Average Number of Trades Registered at Megabolsa In thousands Source: BOVESPA 157,4

12 75% provide financial statements in USGAAP or IFRS 35% voluntarily provide tag along rights and belong to Itag 57% adhered to Novo Mercado, Level 2 or Level 1 In USD billion Market Capitalization BOVESPA’S LISTED COMPANIES 433 Listed Companies Source: BOVESPA

13 CORPORATE GOVERNANCE A new standard is set NOVO MERCADO –Shareholders’ rights Only one class of shares, with full voting rights: one share, one vote Full tag along rights –Higher disclosure Standards Annual financial statements in IFRS or US GAAP Improved Quarterly Reports (ITRs), including an English version, consolidated financial statements and cash flow statements Related party transactions Trading and ownership of the company´s shares by the management and the controlling shareholders –Other listing requirements Delisting: tender offer at a price based, at least, on the economic value Board of directors: a minimum of 5 members, maximum two years terms 25% minimum free-float and adoption of special procedures in public offerings to enhance the dispersion of the company´s shares Adhesion to an arbitration panel (dispute resolution) SPECIAL LEVELS OF CORPORATE GOVERNANCE –Nível 1 (level 1) Higher disclosure standards of Novo Mercado –Nível 2 (level 2) Higher disclosure standards of Novo Mercado Must comply with all the requirements of the Novo Mercado Exception: –May continue to issue non-voting,« preferred » shares (PN), but these « preferred » shares will have voting rights in some circumstances

14 139 companies CORPORATE GOVERNANCE Listing Segments Novo Mercado’s Consolidation 6 years after launching –32% of total listed companies –57% of total market capitalization –68% of total trading value Source: BOVESPA

15 BOVESPA IN NUMBERS Market Performance July 06 – July 07 IGC = + 79% ITAG = + 73% IBOVESPA = + 69% IBRX 50 = + 67% IBovespa x ITag x IGC x IBrX 50 Base 100 on Dec. 2002 Source: BOVESPA

16 CAPITAL RAISING ACTIVITY Distinctive Features  HIGHEST STANDARDS OF CORPORATE GOVERNANCE Most of the newcomers joined Novo Mercado  PLACE OF LISTING Most of the listings only at BOVESPA Source: BOVESPA

17  Capital Raised by Brazilian Companies:  Up to July/2007: US$ 23.1 billion  2006: US$ 16.5 billion  2005: US$ 10.9 billion  2004: US$ 3.8 billion CAPITAL RAISING ACTIVITY Capital raised through shares - Top 10 Markets US$ million – Up to July 2007 Source: WFE – World Federation of Exchanges

18 BOVESPA IN THE WORLD Thought Leadership Member of the Board National Numbering Agency for ISIN Codes Chairman of the Ibero-American Federation of Exchanges Member of the SRO Consultative Committee OECD – Member of the Roundtable on Corporate Governance

19 For more information about BOVESPA Contact BOVESPA: Development and International Relations Department: Advisor: Cristiana Pereira – Lucy Pamboukdjian – Mariana Carmo – David Rodrigues – Visit: Disclaimer “This presentation is provided for information purposes only. The information provided is not an invitation to purchase securities listed on São Paulo Stock Exchange. Do not copy, distribute, sell or modify this presentation without BOVESPA´s prior written consent”.


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