Stock Market Performance in May

The stock market volatility in March, April and May, has provided for three of the four
most active months in terms of Real volume, as seen in Figure 1. The only month that has
surpassed these three has been October, 2009 when Rio de Janeiro was selected as the
venue for the 2016 Olympic Games.

Figure 1

Bovespa - Monthly Volumes

October '08 - May '10
200.00

150.00
R$ billions

100.00

50.00

0.00
De

Au

De
O

Fe

Ap

Ju

Fe

Ap
ct

ct
n-

g-
b-

b-
c-

c-
r-0

r-1
-0

-0
09
08

09
09
09

10
8

0
Source: BMF Bovespa

In terms of market participants in May, Figure 2 shows that the trend of foreign investors
being the most active sellers continues, with Financial Institutions being the only other
net seller in the market. The most active net buyers in May were corporations, perhaps
buying their own stocks for what they saw were bargain prices, to sell again in the future.
Other net buyers were Individuals and Institutional.

Figure 2

Stock Market Activity, May, 2010

$1,500,000
$1,000,000
$500,000
R$ '000's

$0
-$500,000 1

-$1,000,000
-$1,500,000
-$2,000,000

Foreigners Institutional Individuals Fin Inst Companies

Source: BMF Bovespa
The trend in stock market participants can be seen in Figure 3, with the decline from
37.9% of activity in July 2009, to 25.8% in March, but back up to 29.6% in May.
Institutional investors have taken over from foreign investors as being the largest
participants, with 34.3% in May. Individual investors seem to have lost some interest, as
their participation has slipped from highs of over 30% earlier in the year to 26.5% in
May. Corporate participants doubled their activity between April and May from 1.0% to
2.1%.

Figure 3

40.0% Stock Market Participants Oct 08 - Mai 10

35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
O

Fe

Ap

Ju

Au

Fe

Ap
D

D
ct

ct
ec

ec
n-
b-

b-
r-0

g-

r-1
-0
-0

-
09
09

10
0
08

09
8

0
9

Individuals Institutional Foreigners Companies Fin Insts Other

Source BMF Bovespa

We note today that the Ibovespa closed above 63,000 points for the first time in June, and
was up a healthy 2.54%. We do not, however, see this as the start of a long term trend.