Exchange reviews numbers on foreign flows, and balance of BRL 71 billion turns into loss of BRL 7.2 billion in 2021

B3, the Brazilian Stock Exchange, announced the revision of foreign flow data in the local stock market in the years 2020 and 2021. In addition, the Exchange made a change in the methodology for calculating the volumes of these investors in initial public offerings of shares ( IPOs) and subsequent offerings (“follow-ons”).

In early April, B3 had warned of errors in the data analysis methodology. On the occasion, the review of the flow of foreign funds on the Stock Exchange this year was announced, which went from R$91.1 billion to R$64.1 billion, until April, a fall of around 30%.

According to the figures reported, the flow of foreign investors in 2021, which previously indicated a positive balance of BRL 70.8 billion, was revised to a net redemption of BRL 7.2 billion.

In 2020, the volume of withdrawals was negative by R$39.7 billion compared to the R$31.8 billion previously disclosed by B3.

According to the company, the data that had been reported since October 2020 included stock lending operations carried out via screen, when the service was offered by the Exchange. However, this type of operation does not have a financial flow of purchase and sale, being only a loan.

The data now reflect operations carried out on the spot, options and forward market, excluding asset lending data.

The contribution of foreign resources is important for the domestic market. The flow on the B3 secondary market, the one with shares already listed, was positive at R$45.04 billion until the May 18 trading session.

However, a withdrawal movement has already occurred since the beginning of April, which led to a worsening of the performance of the Ibovespa, the main stock exchange index. In May, for example, this investor withdrew R$ 12.60 billion.

The inflow of funds was one of the factors that allowed the dollar to return to operating at levels below R$5 and the Exchange to perform better than its global peers.

Change in methodology for IPOs and follow-ons

In addition to the revision of the data, B3 also announced a change in the methodology for calculating the participation data of foreign investors via IPOs and follows-on, as the subsequent offers of companies already listed are called.

In the previous methodology, the Exchange used information from issuers’ closing announcements, which have a legal term of up to six months to complete.

With the change, the settlement data of operations carried out in the primary market on B3’s systems will be considered, with the lag being reduced to two days.

“The adjustment offers more timeliness to the data, reduces the chance of inconsistencies in filling in the information and, by having the same classification methodology used in the secondary market, allows the reconciliation between the trading data of these investors in the different markets”, highlighted B3. .

After the change, the data on the participation of foreigners in IPOs increased from R$3 billion to R$3.7 billion in 2022, until April.

In 2021, the number increased from R$31.6 billion to R$48.7 billion and, in 2020, from R$29.2 billion to R$40.36 billion.

Thus, the total non-resident balance for 2022 was revised from R$94.2 billion to R$67.8 billion. The one for 2021 went from R$102.3 billion to R$41.5 billion, and the one for 2020 went from negative R$2.6 billion to R$0.7 billion in the consolidated.

Source: The Globe