The Brazilian Capital
Market:
BM&FBOVESPA´s role
August/2012
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Relevant international position
Largest Stock and Derivatives Exchange in Latin America
3rd Largest Listed Exchange Group in the World
VIBRANT CAPITAL MARKETS
Largest Equity Options Market in the World (2011)
8th Largest Capital Raising Market in the World (2011)
Among the Top 6 Derivatives Market in the World (2011)
Listed Compaies
Number of listed companies: 457 (July/12)
Market capitalization of the listed companies: USD 1,15 trilllion (July/12)
Source: WFE , FIA and IOMA
2
Ranked Among the Top 4 Exchanges in
the World
Market cap Brazil – USD 1.12trillion ( June/12)
Turnover velocity
Market Capitalization – BVMF03
(US$ billion)
62%
62%
58%
1,5
1,5
1,5
77%
74%
65%
61%
67%
17,8
14,8
1,3
1,4
1,3
3Q11
4Q11
1,4
1,2
11,5
9,8
9,6
6,1
5,9
5,8
4,2
3,8
3,7
3Q10
2,5
4Q10
1Q11
2Q11
Mkt
Cap Medio
tri)
Average
mkt cap(US$
(US$tri)
1Q12
2Q12
Velocidad
de Turnover
Turnover velocity
Emerging Economies Dividend Yield
(Average end of 2012 estimated* )
3.9%
3.3% 3.6%
2.5%
Diversified and
integrated
Derivatives
Diversified but not
integrated
1.4% 1.5% 1.6%
2%
0.9%
Updated until: August, 10th 2012
Hong Mexico India Thailand Russia Turkey Korea Brazil China
Kong
*Agora Corretora -Valor Economico
Source:BM&FBOVESPA
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Strong Buy Side and Sell Side
Participating in BVMF Markets
Investors Breakdown on Equity Trading
(based on July/12 ADTV)
Investments by Region- Equities
% of International Flow -July/12
Financial
Institutions 7%
Companies 2%
Retail Investors
20%
North
America
41%
Latin
America
13%
Foreign
Investors 40%
Mutual Funds
31%
Africa 1%
Diverse Range of Sectors on the Market Cap
(based on July/12 market cap)
Financial 27%
Asia and
Pacific 2%
Oil, Gas and
Biofuels 12%
Basic Materials
13%
Europe
43%
Capital Goods
and Services 2%
Public Utilities
11%
Telecom 6%
IT 0.4%
Construction and
Transportation
5%
Consumer Consumer Non
Cyclical 5% Cyclical 18%
Source: BM&FBOVESPA Jun/12; WFE
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Agenda
Special Listing Segments
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Brazilian Capital Markets
• Goal: reduce the distance between the regulation and the necessity to protect
investors
• Main requirements of Novo Mercado:
• Requirements of Corporate Governance: shareholders rights, transparency and
supply of mandatory information
• Adhesion to Market Arbitration Chamber to solve corporate conflicts
• Requirement to listing maintenance
• Novo Mercado is a private
Evolution of Brazilian IPOs – (1995 – July/2012)
initiative, based on the selfregulation power of the
Exchange, in order to improve
the quality of public companies
and the credibility of capital
64
market
26
4 6
• It creates a receptive
2
1 1
1
1
7 9
environment for public
offerings
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
11
11
3
2010
2011
2012
6
Corporate Governance
Corporate governance listing segments
Comply with
the regulation
+ better
+ shareholder
disclosure
rights
and free float
+ only
voting
shares
IPOs by Segment
gradual strategy
of market access
Nível 1
6%
BDR
6%
Bovespa Mais
1%
Nível 2
13%
Standard
25% Free Float
Novo Mercado
74%
25% Free Float until 7th
year after listing
Corporate Governance Indexes versus IBOVESPA
2.400
2.000
1.600
1.200
IGNM
IGC
IBOV
IBRX50
800
400
1/1/2009
Source:BM&FBOVESPA
1/1/2010
1/1/2011
1/1/2012
(Base 1.000 - 01/09/2009 - 31/07/2012)
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Funding for Brazilian companies
Initial Public Offerings & Follow-ons
(BRL billion)
IPO: 11
Follow on: 11
149,2
IPO: 64
Follow on: 12
74,81
IPO: 6
Follow on: 18
IPO: 26
Follow on: 16
70,1
IPO: 9
Follow on: 10
IPO: 4
Follow on: 8
11,2
IPO: 11
Follow on: 11
IPO: 3
Follow on: 5
45,9
IPO: 7
Follow on: 8
30,4
15,4
4,5
4,3
5,4
8,5
15,1
14,5
2004
2005
2006
2007
Follow-On
IPO
34,3
7,5
13,9
8,8
Source:BM&FBOVESPA
55,6
23,7
63,2
26,8
7,2
10,8
22,2
2008
2009
18,0
2010
2011
9,5
3,9
5,6
jul/12
Parcel Related to the onerous cession - Petrobras offer
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Investors Breakdown
Access to national and international investors
100%
90%
80%
2%
10%
18%
3%
8%
18%
17%
16%
8%
8%
18%
70%
IPO
13%
7%
3%
7%
8%
8%
12%
12%
3%
14%
2%
9%
20%
International Investor’s
60%
Average
50%
(from 2004 to 20)
40%
30%
70%
62%
73%
72%
66%
72%
70%
69%
20%
IPOs : 69%
Follow-ons: 59%*
10%
0%
100%
90%
80%
2004
2005
5%
7%
1%
6%
20%
20%
70%
FOLLOW ON
2006
2007
13%
9%
38%
13%
7%
20%
13%
18%
2010
21%
58%
6%
15%
50%
30%
2009
69%
74%
2011
4%
60%
40%
2008
59%
65%
International
28%
Institutional
Retail
58%
4%
14%
41%
20%
14%
8%
Others
50%
24%
10%
0%
2004
2005
2006
* The onerous cession of Pebrobrás Offer is not included in 2010.
2007
2008
2009
2010
2011
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Average Ticket of Public Offerings in
Main Markets
• The average ticket of IPOs in emergent markets
• The average ticket of IPOs in most mature
also reduces when it increases the number of
markets shows a trend of offerings of lesser value
new listed companies
New company
Listed
Volume of Capital raised in IPOs
(USD billions)
Hong Kong Ex
33,3
Shenzhen SE
Australian SE
16,2
Australian SE
Shanghai SE
15,7
Shanghai SE
7,6
Bursa Malaysia
4,9
Bursa Malaysia
BM&FBOVESPA
4,6
BM&FBOVESPA
Korea Exchange
3,9
Korea Exchange
Warsaw SE
3,4
Warsaw SE
National SE India
2,5
National SE India
Indonesia SE
2,2
Indonesia SE
0
5
10
15
20
25
Source: WFE – World Federation of Exchanges December - 2011
30
35
NYSE Euronext (US)
107
Aus tra l i a n SE
38
Sha ngha i SE
73
Singapore Exchange
Hong Kong Ex
Shenzhen SE
69
NASDAQ OMX
11,0
Singapore Exchange
243
NYSE Euronext (US)
23,8
NASDAQ OMX
81
Shenzhen SE
27,9
NYSE Euronext (US)
Hong Kong Ex
Average Ticket
(USD Millions)
NASDAQ OMX
22
Si nga pore Excha nge
Burs a Ma l a ys i a
28
BM&FBOVESPA
11
Korea Excha nge
73
Wa rs a w SE
204
Na ti ona l SE Indi a
33
Indones i a SE
411,0
115,0
345,2
151,5
413,7
150,1
346,8
174,5
414,4
53,1
16,6
77,0
88,7
25
0
50
100
150
200
250
300
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3 Listed companies in BOVESPA MAIS
DESENVIX: renewable energy
NUTRIPLANT: micronutrients producer
October.03.11
February.13.08
Nº. Of shares: 12
Price per share: R$ 10
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



Capital Raised: R$ 20,7 MM (100% Primary offering)
Free Float: 40,00%
Nº. de Investdors: 8
Costs: R$ 1,46 MM (7,07%)
Net Resources: R$ 19,2 MM
Destination: 60% investment and 40% working
capital
Market cap: R$ 51,9 MM
Net Revenue (12m - 2007): R$ 35,1 MM
Source: Prospecto Definitivos e Anúncio de Encerramento.
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Capital Raised: listing without public offering
Free Float: 0%
Net Revenues (2010): R$ 112,1 MM
(jun/11): R$ 55,2 MM
Senior Solution: IT
May.10.12
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Capital Raised: listing without public offering
Free Float: 0%
Net Revenues (2011): R$ 38,75 MM
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Agenda
Listing a Foreign Company at BM&FBOVESPA
12
Listing a foreign company in Brazil
• Foreign company has two alternatives to listing in Brazil
– Through a subsidiary, as a Brazilian company (the trading of securities in the
regulated markets depends on prior registration of the issuer with the CVM –
CVM Instruction 480/2009)
– Through Brazilian Depositary Receipts (BDRs) representing securities issued
and with custody outside Brazil (CVM Instruction 332and 480)
• BDRs can be non-sponsored (only for Level I) and sponsored (Level I, II or
III)
– Non-sponsored refers to a program organized by a depositary institution
issuing certificates without an agreement with the company that issued the
securities underlying the depositary certificate
– Sponsored refers to a program organized by a single depositary bank (BDR
issuer) hired by the foreign company that issued the BDRs' underlying
securities
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Programs per Depositary Institution
70 U.S. companies available for trading
Deutsche Bank
Citibank
Itaú Unibanco
Bradesco
Citibank
Deutsche Bank
Bradesco
 Apple
 Alcoa
 Amazon
 American Express
 Amgen
 3M
 Dow Chemical
 Arcelor Mittal
 Cisco
 Caterpillar
 AT&T
 Comcast
 Abbott
 Fedex
 Avon
 Citigroup
 Chevron
 Boeing
 Dell
 ConocoPhillips
 H. J. Heinz
 Bank of America
 Freeport-McMoRan
 Coca-Cola
 Bristol-Myers
 Ford Motor
 DuPont
 Honeywell
 Exxon Mobil
 General Electric
 Colgate-Palmolive
 IBM
 Halliburton
 eBay
 HP
 Goldman Sachs
 Intel
 Mastercard
 Johnson&Johnson
 LinkedIn
 Eli Lilly
 Lockheed
 Google
 Merck
 Monsanto
 Kraft Foods
 Netflix
 Home Depot
 Morgan Stanley
 McDonald’s
 Microsoft
 Nike
 Pepsico
 Philip Morris
 JP Morgan Chase
 Starbucks
 Pfizer
 Procter & Gamble
 Oracle
 VISA
 Qualcomm
 UPS
 Time Warner
 Wal Mart
 Wells Fargo
 Schlumberger
 Walt Disney
 Verizon
 US Steel
 Xerox
Launch date:
Jul 25, 2011
Launch date:
Oct 18, 2011
Launch date:
Feb 07, 2012
Launch date:
Oct 05, 2010
Launch date:
Nov 29, 2010
Launch date:
Mar 04, 2012
Launch date:
Apr 04, 2012
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Manager of
Products and Services for
Issuers
Adriana Sanches
[email protected]
www.bmfbovespa.com.br
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