Brazil's stock exchange has more staying power than the country's flagging economy. BM&FBovespa has been hit by delistings and a dearth of IPOs this year. Rival exchanges may soon arrive, too. But Bovespa has a lock on other business while expanding elsewhere.
This year has been unkind to the world's third-largest exchange. By the end of July Bovespa had handled just $4.8 billion of initial public offerings and follow-on share sales. That's less than a fifth of the total initially projected for the year. And some companies are pulling their shares from the exchange, such as billionaire Eike Batista's troubled logistics company LLX Logistica, or the $11 billion card payment company Redecard, which is being swallowed by Banco Itau.
Bovespa also faces the prospect of more competition: US exchanges Direct Edge and BATS Trading are both angling for a piece of Bovespa's cash equities business. But none of this is as bad as it sounds. Listing fees account for just 2 percent of the Brazilian bourse's overall net revenue.