March Stock Market Activity

March saw an increase in the Ibovespa index of 5.8% in March, but the value of activity
was up 26.1% over February (pls see Figure 1.), reaching R$ 148.4 bi. It should be noted
that March was a 23 business day month, and February was an 18 business day month,
and the average value transacted per day in Februray was a little higher in February
(R$6.53 bi) was a little higher than in March (6.45 bi). March was the second highest
month in terms of activity since the advent of the world economic crisis started in
September 2008. The month of highest activity was October, 2009 (153.6 bi), a 21
business day month.

Figure 1

Bovespa - Monthly Volumes

October '08 - March '10
200.00

150.00
R$ billions

100.00

50.00

0.00
De 8

Ju 9
Au

Se 9

De 9
O

No 8

Ja 8

Fe 9
M 9

Ap 9

M 9
Ju 09

O 9

No 9

Ja 9

Fe 0

M 0
ct

ct
ar

ay

ar
l-0
n-
n-

n-
p-
g-

b-
b-
c-

c-
r-0
v-

v-
-0

-0
-0

-1
0

0
-

1
0

0
0
9
0
0

0
Source: BMF Bovespa

The activity of the various categories of market participants is detailed in Figure 2 below.
Institutional Investors became the largest trading group for the first time, with 31.4% of
the activity, slightly above individuals with 30.7%. Foreign investors dropped to a
participation of 25.8% of activity after having been consistently around or above 35% of
activity a year ago.

Figure 2.

40.0% Stock Market Participants Oct 08 - Mar 10

35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
Oc
No 8

Ja 08
Fe 9
M 09
Ap 9

Ju 09

Au 9

Oc 09
No 9

Ja 09
Fe 0
M 10
De 8

M 9

Ju 9

Se 09

De 09
ar

ar
ay
n-

n-

n-
l-0
b-

b-
t-0
v-

r-0

g-

t-0
v-
c-

p-

c-
-0

-1
0

1
-
0

Individuals Institutional Foreigners Companies Fin Insts Other

Source: BMFBovespa
However, it would be wrong, even at these lower levels of activity to undervalue the
effects of Foreigners in the Brazilian stock market. Figure 3 demonstrates the Net
investment activity (Stock purchases vs Stock sales) for each of the four main investor
groups. Notwithstanding the Foreigner`s reduced percentage activity, the largest category
of net positive investment was Foreign, by a value of just over R$ 3 bi. The only other
group in a positive category was the Institutional with R$ 147 million. On the net
negative side was Individuals with a R$ 2.0 bi withdrawal, and Financial Institutions with
a minus R$ 356 million.

Figure 3

Stock Market Activity, March, 2010

$4,000,000
$3,000,000
$2,000,000
R$ '000's

$1,000,000
$0
-$1,000,000 1
-$2,000,000
-$3,000,000

Foreigners Institutional Individuals Fin Inst

Source: BMFBovespa

The profile of activity has changed significantly, with the reduction in Foreign Investors
activity as a percentage of total activity. However, Foreigners returned to the market,
particularly in the last seven business days of March and contributed to the Ibovespa
surpassing 70,000 points for the first time since October, 2009.