Bovespa market value returns to level prior to Lehmans bankruptcy
O Estado de S. Paulo
The value of all companies with stocks traded in the São Paulo Stock Exchange (Bovespa) has already returned to the level they were in the end of August, thus, before the worsening of the global crisis, in September 15, with the bankruptcy of Lehman Brothers. Since the worst moment of such period, in October, the market value of the stock exchange increased R$ 460 billion (US$ 219 billion). A survey made by Economatic, a financial information company, shows that, on Friday, the market value of the São Paulo Stock Exchange achieved R$ 1.7 trillion (US$ 809 billion) - a level similar to that of the end of August.The resumption started being outlined more strongly in April, when the value of the companies traded in the Stock Exchange was at R$ 1.3 trillion (US$ 619 billion).
The main doubt at this moment is whether the resumption of the stock market is overoptimistic or consistent. This question is associated to the fact that the rhythm of improvement of the real economy is not consistent with the euphoria seen in the past months. However, we have to consider that investors make their movements in advance, explain the economists. In this second quarter, the data concerning the industrial production and the unemployment is showing a recovery, but it is somehow very slow. In spite of it, there are some sectors, such as the sectors of electric and electronics and machine and equipment, that are facing a very delicate situation, with declining levels of activity. Economists believe the improvement of the domestic economy will be more consistent after the last quarter of the year.
This week, two important events should be followed close by investors. The first one is the announcement of the Gross Domestic Product (GDP) of the first quarter of the year - which will disclose a new retraction of the economy. The result tends to influence the decision of the Monetary Policy Committee (Copom) of the Banco Central (BC), the Brazilian Central Bank, on the interest rate of the Country, currently at 10.25% a year. The signs given by the BC may intensify or reduce the activity of investors within the next weeks. Another indicator of the appetite of the investors will be the result of the next offerings of stocks that will be made by Brazilian companies like MRV, Gafisa and VisaNet, among others. The success of those issues may stimulate other companies to take out of the drawer projects of initial public offerings (IPO), aborted with the deterioration of the international scenario. The measure would benefit the recovery of the national economy, since it increases the volume of credit in the Country.