The Brazilian stock market continues its search for direction with a rise of the Ibovespa

index in Februray (up to close of business Februray 25th) of 1.1%. This gives an overall
2010 performance of -3.6%. The markets have been roiled by the disturbing debt issues
concerning various European countries, be they PIIGS or just PGS. The USA economy
has shown further lackluster tendencies specifically with the housing market which
continues to worsen, at least in terms of housing sales.

Figure 1
Sock Market Performance, 2010
105,0%
103,0%
101,0%
99,0%
97,0%
95,0%
93,0%
91,0%
89,0%
87,0%
85,0%
31

7/

14

21

28

4/

11

18

25
1/

2/
/1

/1

/2

/2
/1

/1

/2
10

1
2/

/1

/1

/1

/1

/1

/1
0
09

0
DJI FTSE CAC HSI IBOV S&P

Source Yahoo Finance

Figure 1 shows the relative performance of six diverse stock markets using the closing
index of 2009 as 100 for all indices. The indices chosen were the Dow Jones Industrial
Average (“DJI”), and the Standard and Poors 500 (“S&P 500”) of the USA, the
Financial Times and London Stock Exchange 100 Index (“FTSE 100”) of the United
Kingdom, The Cotation Assistee en Continu 40 (“CAC 40”) of France, China`s Hang
Seng Index (“HSI”), and Brazil`s Indice da Bolsa de Valores de Sao Paulo
(“Ibovespa”). The relative performances show the DJI and the S&P doing best at 99%
of their 2009 year end indices. Then comes the FTSE at 97.5%, and then the Ibovespa at
its 96.4% of its 2009 finish. The Hang Seng is at 93.3%, and the CAC 40 has lost 7.5%
of its value and is at 92.5%.

The problem for the Ibovespa is that foreign investors rode the market up from its
29.000 low, but today find relatively little upside in the market. Therefore, the DJI and
the S&P, both USA based have become the home for substantial volumes of investment
capital both as a safe home against volatility deriving from the problems of heavily
indebted foreign countries, or as an interesting source of future value. In other words,
upward stock price mobility is seen to have greater potential in the USA than in other
markets including Brazil.