Brazilian companies reach record value of US$ 1.5 trillion in stock market
O Estado de S. Paulo
The Brazilian publicly traded companies closed 2009 with a record: together, they achieved a market value of US$ 1.503 trillion in the São Paulo Stock Exchange (Bovespa). The survey was made by the consulting firm Economática. The prior mark had been registered in October, when the market value got to US$ 1.464 trillion. According to the survey, the ten Brazilian companies with greatest market value are responsible for 56.4% of that sum, with US$ 848.2 billion.
Petrobras remains at the top of the list as the largest Brazilian and Latin American company in market by value, with US$ 228.2 billion. In second place appears Vale (US$ 166.2 billion), followed by Itaú Unibanco (US$ 96.4 billion), Ambev (US$ 86.6 billion) and Bradesco (US$ 67 billion). According to Einar Rivero, Manager of Institutional and Commercial Relation of Economática, the data strengthen "the greatness of the Brazilian market before the Latin American market". "But they also show we are still small compared to the United States", he points out.
That because, despite an explosive growth, the total market value of the Brazilian companies is equal to the sum of only the six largest American companies (US$ 1.49 trillion). They are Exxon Mobil (US$ 368.7 billion), Apple Computer (US$ 295.9 billion), Microsoft (US$ 238.8 billion), Berkshire Hathaway (US$ 198.5 billion), GE (US$ 194.9 billion), Wal-Mart (US$ 192.1 billion) and Google (US$ 189.9 billion). In the United States, the market value of the 1,214 largest companies monitored by Economática corresponded to US$ 14.31 trillion - 9.5 times greater than that of the Brazilian companies.
One of the reasons for the increase of the market value of the Brazilian groups in 2010, according to Rivero, was the amount of share issues made by some companies. That is the case of Petrobras and the pre-salt operation. The capitalization made in September gave the company US$ 115.05 billion (US$ 67.7 billion). Such capitalizations were used to leverage the market value, regardless of the performance of the Bovespa in 2010, which had a value increase of only 1.04%.
Rivero also highlights another important data related to the Stock Exchange in 2010: the increase in the liquidity. The financial volume traded by the Bovespa (spot market) in 2010 was the largest ever registered in the history, R$ 1.4 trillion (US$ 824 billion). The volatility of the Stock Exchange last year reached its lowest level of the last 29 years, near 20 points. Volatility is the thermometer that measures the level of nervousness in the market. For investors, the lower the volatility, the lower the risk of uncertainties and, consequently, greater the attractiveness.
To calculate the market value of the companies, Economática considers neither the treasury shares nor the holding companies. The firm got to the values multiplying the price of the ordinary shares (with voting rights) and preferred shares (with preference in the receipt of dividends) by the number of shares.