Investors are sometimes accused of seeing the world through rose-colored glasses. But it was a pair of 3-D ones that the attendant handed me as I entered the São Paulo Stock Exchange.
Yes, it was a pair of those throwaway spectacles with their flimsy cardboard frames, the ones made infamous by fifties movies like The Creature from the Black Lagoon. Here I was in the trading pit of the Bovespa (the institution’s Portuguese acronym), fumbling to fit this friggin’ contraption over my ears.
The Hotel Jaguará is located near the Bovespa building. For more on Brazil’s biggest city, see the BrazilMax São Paulo Travel Guide.
About two dozen people were milling around, like me, trying on their glasses. A few rows of seats lined one side of the room. One set was occupied by three generations: flabby grandma in flip-flops and Bermuda shorts, mom in copycat garb, and a cutely swaddled baby in mom’s lap. Young couples distanced themselves in self-contained clusters. Above, along one wall, I spotted the electronic board with numbers left over from Friday’s trading session. On the opposite end, at ground level, cabinets not unlike those in the locker room at my health club occupied the wall. Each sported the name of a Brazilian brokerage: Itaú, Planner, Fator, Ativa, Theca...
José Luiz Sanches, a former pit trader downsized out of the Theca locker in 1999, slid up to the microphone at the podium. Front and center, below the electronic board. He announced the main attraction. It would be a 3-D educational documentary about the stock market and how it works. When the movie started, I half expected a bull from the old Merrill Lynch spots to charge out at me, or Yogi Bear to reach out to grab my wallet. Instead I saw a Carnavalesque ox costume from the bumba-meu-boi festival in Maranhão, an image that illustrated one of Bovespa’s “social investment” schemes.
Few regular people understand how stock or futures markets work. Yet we’ve all seen the movie Trading Places: we remember Eddie Murphy and Dan Ackroyd among the floor traders muscling in on each other, their arms outstretched, frantically waving strips of paper, outdoing Max Cavalera with their frantic screams. Some of us have even read accounts by Ivan Sant’Anna, the Brazilian trader-turned-novelist and author of Rapina.
With the growing dominance of electronic trading, the pit trader has become just another Brazilian endangered species. Over one thousand populated the Bovespa floor a decade ago; their numbers have dropped to under a hundred today. Yet, with the upstairs windows that line the area, allowing visitors and clerical workers the chance to gaze down for a voyeuristic thrill, the pit remains one of those mysterious inner sanctums, something like the turf at Maracanã.... Well, you get the idea.
Bovespa is capitalizing on the pit’s allure as part of its “popularization” scheme. On weekends its Bolsa Aberta program transforms the pit into a financial Discoveryland, allowing all-comers a chance to play Murphy and Ackroyd. The 3-D short explains the basics of equity investment. Former floor traders like Sanches, together with current brokers and representatives of listed companies like mining giant Vale do Rio Doce, stand by ready to answer questions. “I was curious,” explained one visitor, Carlos Alberto D’Annibale. “I knew about all the craziness. Now I understand a little about how it works.”
During the first 35 days of Bolsa Aberta, some 12,000 folks like Carlos Alberto donned their 3-D glasses in the pit. Leading Brazilian tourism agencies like Andanças and CVC have begun to include Bovespa on their weekend downtown circuits. “People come from all income groups, from AAA to Z. Many have little sense of how things work, but they are very interested,” said Alice Bueno Moraes, a broker with Novoinvest.
According to the broker, the first question is nearly always the same: “Is there a minimum investment?”
That gives her an opening to tout Bovespa’s investment clubs. Under the scheme, like-minded people (from a workplace, a neighborhood, a social club or whatever) can pool resources in an exclusive equity fund. Since Bovespa began its drive to attract individual investors in 2002, the number of investment clubs has grown from under 400 to over 1,000. Over that same period, the percentage of individual investors in Bovespa has jumped from 18% to 30%. “This is striking,” said Deiwes Rubira, Brazil country manager for the Amsterdam-based ING Bank. “The people at Bovespa have gotten it right. The market is small, and the risk has decreased as shareholding has become more widespread.”
The Bolsa Aberta grew out of another program called Bovespa Where You Are. That initiative sends a Bovespa van to public areas, from busy summer beach resorts to Amazon hideaways, spreading the good word about equity investment. Many people expressed interest in seeing the pit, noted Luis Abdal, Bovespa’s marketing and communications manager. After a stock market honcho visited the Kuala Lumpur bourse learning of its annual weeklong on-site public education programs, Bovespa officials launched the weekend open house.
So far pit visitors seem relatively knowledgeable compared to some who saunter up to the far-flung van. In Portuguese, of course, “bolsa” can mean both stock market and handbag. Imagine how the ex-pit trader at the van felt when he heard the question: “What materials are your ‘bolsas’ made of?”
Visit the BM&FBOVESPA
Address: Rua XV de November 275, Centro, São Paulo (near the São Bento subway stop)
Saturday and Sunday, 10 a.m.-5 p.m.
Order Rapina: O Sequestro Que Abalou O Mercado by Ivan Sant’Anna.