What Is the São Paolo Stock Exchange (SAO.SA)

Based in São Paolo, 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 13th largest exchange in the world. The SAO was formerly known as the BM&F Bovespa and now identified by the acronym B3.

The main equity index of this exchange is the Indice Bovespa. As of January 2017, more than 450 companies listed on the B3 exchange.

The São Paolo Stock Exchange Explained

The São Paolo 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, IBrX and ITAG indices track the stock.

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 U.N. Global Compact Brazilian, Committee (CBPG) and since 2017 the Exchange acted as the vice president of the Global Compact’s Brazilian Committee.

Global Compact is a United Nations initiative which aims to mobilize the international business community in the adoption of 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 Paolo, 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 which 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.

Key Takeaways

  • Based in São Paolo, Brazil, this stock exchange has the 4th-largest market cap in the Americas & the 13th largest in the world.
  • It is also known as the Bovespa or B3 exchange.
  • It is home to the IBOVESPA stock market index.

Real World Example

The São Paolo Exchange has a pre-market session between 09:45 a.m. and 10:00 a.m., followed by a standard trading session between 10:00 a.m. and 5:30 p.m. There is also a post-market session between 6:00 p.m. and 7:30 p.m., weekdays and holidays declared by the exchange in advance.

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.

Three represents ordinary stock, four is a preferred stock, and five, six, seven and eight 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+3 days.

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