What Is the São Paulo Stock Exchange (SAO.SA)?

Based in São Paulo, Brazil, and originally founded in the year 1890, this vital stock exchange is the fourth largest, by market capitalization, in all of the Americas. It is the eighteenth-largest exchange in the world. The SAO was formerly known as the BM&F Bovespa and is now identified by the acronym B3.

The main equity index of this exchange is the Bovespa Index, or Ibovespa. As of March 2021, more than 440 companies listed on the B3 exchange.

key takeaways

  • Based in São Paulo, Brazil, this stock exchange has the fourth-largest market cap in the Americas and the eighteenth largest in the world.
  • It is also known as the Bovespa or B3 exchange.
  • It is home to the Ibovespa stock market index.

The São Paulo Stock Exchange Explained

The São Paulo Exchange, formerly known as the Bovespa, merged with the Brazil Mercantile and Futures Exchange in 2008 to create the BM&F Bovespa Exchange. It is known as the B3 exchange, where the three B's indicate Brasil, Bolsa, Balcão.

The exchange has an unbroken tradition of innovation in products and technology. It is one of the largest companies, in market value, holding a prominent global position in the stock market industry. B3 is a public company traded under ticker symbol B3SA3 on the Novo Mercado premium listing segment. The Ibovespa, IBrX 50, IBrA, and ITAG indices track the stock, among others.

B3 Commitment to Sustainability

B3 is committed to sustainability. It was the first stock exchange in the world to adhere to the Global Compact in 2004. In this context, it is also a member of the UN Global Compact Brazilian Committee and since 2017 the Exchange acted as the vice president of the Global Compact’s Brazilian Committee.

Global Compact is a United Nations initiative that aims to mobilize the international business community, in the adoption of its business practices, fundamental and internationally accepted values regarding human rights, labor relations, the environment, and corruption prevention. The Global Compact stipulates that companies report their progress annually, as regards the Ten Principles of the Global Compact, through a Communication on Progress (CoP) on the Global Compact’s international website.

Ibovespa Index

Ibovespa is the primary performance indicator of the stocks traded on the São Paulo, B3, exchange. The index lists important companies in the Brazilian capital market. Since its creation in 1968, the index acts as a benchmark for investors around the world interested in Brazilian equities.

Ibovespa reassesses every four months. It is made up of stocks and units of companies listed on the B3 that meet the criteria described in its methodology. It accounts for about 80% of the number of trades and the financial volume of the capital markets.

Real-World Example

The São Paulo Exchange has a pre-market session between 9:45 a.m. and 10:00 a.m., followed by a standard trading session from 10:00 a.m. to 17:00 p.m. or 17:15 p.m., depending on the type of equity.

The following general rubric denotes stock ticker symbols: XXXXY

  • XXXX = four capital letters representing the name of the issuer
  • Y = a number representing the type of stock

3 represents ordinary stock, 4 is a preferred stock, and 5, 6, 7, and 8 indicate the preferred classes A, B, C, and D, respectively. Stock prices are quoted in Brazilian reales (BRL) to two decimal places and settle in T+2 days.

Foreign (non-Brazilian) companies may list their shares in São Paulo using sponsored Brazilian Depositary Receipts (BDRs).