Brazil and China are a world apart
Valor Econômico 02/09/2009
The Brazilian market was far from giving any kind of joy to investors last year, with the Bovespa Index falling 41.22%. That performance, however, was not an exclusive "privilege" of Brazil. The crisis affected all markets. This year, so far, the situation is different. As almost all Stock Exchanges in the world continue falling, the Ibovespa breaks up with them and rises. In the year, in Dollars, the index accumulates an appreciation of 17.44%. In Reais, the increase reaches 13.86%. The index ended Friday at 42,755 points, the highest level since October 3, when it was at 44,517 points. According to a survey made by Valor Data with the 48 most important stock indexes, the Brazilian index is only behind the Shanghai index, for the Chinese Stock Exchange with appreciation of 19.61%. The fact Brazil and China are together in the positive field is not sheer coincidence. The recovery of both the markets has something to do with the little better figures of the Chinese economy and the recovery of the commodities. Since these raw materials have the greatest participation in the Ibovespa, they end up defining the activity of the local market. Together, the shares of Petrobrás and Vale, for instance, represent more than 30% of the Ibovespa. Without taking into account the papers of the steel industries, which increase this percentage. In the year, some of these instruments have registered enviable performances. Vale ordinary shares (ON voting share) accumulate an appreciation of 39.94% and the A series preferred shares (PN voting share), 35.96%. The ON shares of Companhia Siderúrgica Nacional (CSN) increased 38.62%, whereas the Petrobrás ON shares, 20.77%. It is still very early to say the worst in the market has already gone. But the assets are, little by little, giving slight signs of improvement, without forgetting, of course, that the volatility is still here for everybody to see, recalls Walter Mendes, director of variable sales of the Itaú Bank. He believes, however, that the biggest moment of stress of the market may have really been between September and October last year. Mendes believes the Ibovespa may get to the 51 thousand points at the end of this year, that is, an appreciation of almost 20% compared to last Friday's closing of the stock exchange.