THE BRAZILIAN STOCK MARKET DEVELOPMENT: A CRITICAL ANALYSIS OF PROGRESS AND PROSPECTS DURING THE PAST 50 YEARS

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Abstract

This paper highlights the origin of the stock market in Brazil, and traces the reforms that have been undertaken to develop the stock market. It also highlights the growth of the Brazilian stock market, as well as the challenges currently facing the market. The country has one big stock market, known as the BM&FBOVESPA, which is one of the world’s largest stock markets. Over the years, a number of stock market reforms have been implemented in Brazil. Among these reforms have been the restructuring of the financial market, the replacement of the traditional trading systems by full electronic trading systems, the enactment of new laws governing the stock market, as well as the revision of the existing laws. In addition, the formation of a regulatory body known as Securities and Exchange Commission (CVM) in 1976 also assisted in the creation of an environment conducive for the growth and
development of the stock market. Since the implementation of these reforms, the Brazilian stock market has developed significantly in terms of market capitalisation, the total value of stocks traded, and the turnover ratio.

Keywords: Brazil; BM&FBOVESPA; Stock Market; Reforms

How to cite this paper: Nyasha, S., & Odhiambo, N. M. (2013). The Brazilian stock market development: A critical analysis of progress and prospects during the past 50 years. Risk Governance and Control: Financial Markets & Institutions, 3(3), 7-15. https://doi.org/10.22495/rgcv3i3art1