Bovespa Ins and Outs: Volume and Volatility

The New Bourse formed by the merger of the BM&F and the Bovespa: Intercontinental ballistic synergistic ambitions?

Bovespa tem saída de R$ 11 bi em capital externo no ano: Exame magazine reproduces part of a story by Fabiana Holtz of the Agência Estado — is it really going to be bought up by the Organizações Capivara Globo? — on influxes and outflows of foreign capital in the Stock Exchange of the State of São Paulo, the Bovespa.

A aversão ao risco no mercado financeiro, diante das incertezas sobre a saúde da economia mundial, continua afastando os investidores estrangeiros da Bolsa de Valores de São Paulo (Bovespa), que, em 2008, já acumula uma saída recorde de R$ 11,275 bilhões em capital externo. Os dados são até a última terça-feira (dia 15 de julho).

Risk aversion in the financial markets in the face of uncertainties about the health of the global economy continues to drive foreign investors away from the Bovespa. In 2008, the Bovespa has already accumulated record outflows of R$11.28 billion in foreign capital. The figures are current as of July 15.

Naquele dia, a Bovespa registrou uma saída líquida de R$ 845,540 milhões em recursos estrangeiros. Este mês até o dia 15, a Bolsa brasileira contabiliza perdas de R$ 4,618 bilhões – o terceiro pior resultado mensal desde março de 1993, quando o levantamento teve início. O montante é inferior apenas ao apurado nos meses de junho (R$ 7,415 bilhões) e janeiro de 2008 (R$ 4,731 bilhões).

On July 15, the Bovespa recorded a net outflow of R$845.54 million in foreign funds. In the first half of July, the Brazilian bourse has racked up losses of R$4.6 billion — the third worst result since March of 1993, when figures on foreign investment began to be recorded. The sum is second only to outflows recorded in June 2008 (R$7.4 billion) and January 2008 (R$4.731 billion).

Diante dessa saída recorde é importante ressaltar, no entanto, que os volumes registrados em 1994 pela Bovespa eram infinitamente menores. Apenas a título de comparação, em 1994, a bolsa fechou o ano com R$ 12,678 bilhões em vendas e R$ 13,211 bilhões em compras, enquanto que em 2008 já movimentou R$ 275,8 bilhões em compras e R$ 285 bilhões em vendas.

Given these record withdrawals, it is important to recognize, however, that Bovespa trading volumes were infinitely smaller in 1994. For example, in 1994, the stock market closed the year with R$12.7 billion in sells and R$13.2 billion in buys, while in 2008 it has already recorded R$275.8 in buys and R$285 billion in sells.

That is probably very badly translated. All translations here are draft-quality. Since you are not paying me to wrack my brains to produce finished work, you get what you pay for, and honi soit qui mal y pense.

The gist of the story, then: We present you with alarming numbers, only to remind you that they mean absolutely nothing except in relative terms — as a percentage of total transaction volume and market capitalization, for example.

But we do not go to the effort of calculating those numbers for you. If you want to figure out whether or not you should be terribly, terribly alarmed, fire up your own spreadsheet, or get yourself a cocktail napkin and a pencil.

And unlike the Sousaphone, which is just some guy taking messy notes, Exame does expect you to pay it for the value it adds to (subtracts from) the story.