For those who do not know bmf is the only stock exchange in Brazil at the moment, we already had several stock exchanges (Recife, Porto Alegre, Fortaleza, Rio, São Paulo), over time these stock exchanges were closed and finally only the bovespa Which incorporated BMF and Rio’s former stock exchange.
For those who do not know, “the purse” is a company, and the “purse” is inside the “purse”, you can become a member of the purse that is the very company that organizes everything.
BMF profits through fees on purchases and sales of assets, rents, custody, business registration, derivative operations, futures market, commodities, etc. etc. Many of these things do not interest the scope of this blog and are highly specialized and for gigantic sharks like large global Hedge funds and banks.
These derivative transactions move almost 70% of the world’s money and are not for the amateur, future market and commodities are also very complex things for those who are not from the area and do not work directly with this to understand. For the small investor, the most that I could indicate doing is stock and covered sale, out of this the potential for loss is huge and you can jeopardize your family’s assets and your life.
If you have a love of money, focus on your work and simple operations. The purse can work as a casino if you want but your chances are very small. Such a short sale has infinite potential to destroy you forever and has already led some people to suicide.
I am an enthusiast of capitalism. I am an enthusiast of financial capitalism and the democratization of large corporations. For me, this was one of the greatest achievements of mankind. The fact that I, a simple handyman, can buy a stock from Apple and become a member of the world’s biggest brains graduated from the best universities in the world makes me greatly enthusiastic.
And the stock market (BMF) represents a bit of that, it is a link between investors and publicly traded companies, for me that is the biggest aspect of the stock market, it has an intangible value. In Brazil the BMF has no competition, it is a monopoly with a gap around it, and it has its own bank and its own clearing (organ that liquidates the operations) and now that it has bought CETIP it will guard and register all movements of capital Of fixed income in Brazil, this is not a small thing because we are among the 10 largest economies in the world and we are emerging.
To understand a little of bovespa’s history, I suggest reading this book, he reviews the history of the Brazilian capital market 200 years ago, of all the sadness and joys the country has gone through, and of the efforts of some people to set up the stock exchange in Brazil.
In the book, we see stories of joys, defeats, crises and phenomenal rises of the scholarship, in addition to its creation, evolution, and maintenance. A must read for those who invest in the financial market.
Let us now speak of the actuality of bovespa:
“Bm & fbovespa has as main objectives to manage organized securities markets. Securities and Derivative Contracts. ”
It opened the capital in 2008. It is from the Novo Mercado, tag along 100% ON, 47,500 individual members, a company from the financial sector and with a payout of 56%. Excellent liquidity to be a partner.
It is a company difficult to analyze. Currently, she has no debt and has lots of cash. Its equity since 2008 is 19 billion reais, does not grow, revenue and profit stagnated since 2010, the stagnant LPA 2010-2014, as well as the DPA. It has has a regular dividend distribution and a DY of 4.29% at this time.
In 2015 it bought part of the stock exchange in Chile and Mexico in an attempt to grow outside Brazil, in 2016 it bought CETIP (in progress) to take over the fixed income market. As I spoke above Brazil is the country of fixed income. Here less than 0.5% of the population invests in the stock market, which is touched mainly by foreigners.
Bovespa has a huge challenge of bringing a person to the stock market and still can not. Many people complain about their governance, but the problem is the lack of basic education and financial Brazilian, who does not know how to invest, does not know what the bag is or what it is for and has only a vague idea of what the subject is.
Many people find that bringing a physical person to the bovespa her profit would increase. Not so, the volumes are huge and touched by large banks and funds, not by PF. PF does not make a profit for the stock market. I know (I’m sure I give her almost no profit), so I think there’s a lot of hysteria in that part.
The financial result of 2016 was very distorted due to the sale of the bovespa stake in the Chicago stock exchange, causing it to enter a lot of non-recurring money and distort the accounting. Basically, we have to wait for the results of the participation in the stock exchange of Chile and of Mexico and the profits of cetip. But really the last four years have been bad. A company that does not grow and does not grow profit makes it difficult to become a partner.
The release does not have much graphic color and is very lean, only has a table. Let’s go to the release, where I highlight the main one:
One point worth noting that I liked very much was the share repurchase in 2015 and the new repurchase announced for 2016, are seeking to repurchase 40 million shares, which gives almost 3% of the total volume. The repurchase of shares results in an increase in LPA and DPA, which is a great way to deliver value to shareholders (perhaps even better than dividends).
I expect a better 2016 for the company’s performance, which basically follows debt-free, cash-strapped, CAPEX 816 million and CETIP merger.
I’m still a partner.