What is Ibovespa and where can I track the index?
Find out what Ibovespa is and how it works!
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Do you know what Ibovespa is? This indicator is well-known among investors. After all, it basically works as a thermometer to measure the performance of your shares.
In fact, you've probably even heard someone say that the index fell or rose so many points, right?
But what does this mean in practice? That's what you're going to find out now.
For more information, continue reading.
What is Ibovespa?
Ibovespa stands for São Paulo Stock Exchange Index.
It is the main performance indicator of shares listed on B3.
It was created in 1968. Over the decades, it has established itself as a reference for Brazilian investors.
This index is a theoretical portfolio of shares, which has the main assets that move large volumes of trading in the market (corresponding to approximately 80% of the daily total).
Reassessed every four months, its composition tends to vary over time.
If an investor wants to find out how his stock portfolio is performing, he should compare it to the IBOV.
How is the Ibovespa portfolio composed?
You already know what Ibovespa is and that B3 (the Brazilian stock exchange) reevaluates the composition of the IBOV portfolio every four months.
Now it's time to find out what the main requirements are to be part of the index: presenting good liquidity and a huge financial volume traded on the stock market.
The shares and units that make up the index must meet the following criteria:
• Presence in 95% auction in the last year
• Financial volume participation starting from 0.1% in the spot market
• Be part of the eligible assets that, in total and within a period of one year, represent 85% of the negotiability index
• Not to be Penny stock: shares with low prices, usually in the range of cents
The weight of each stock in the index score may vary and be different.
This means that if the index rises, not all the shares that make up the portfolio will rise, as there are some assets that have more weight and these pull the index up or down.
What do the Ibovespa points mean?
When the index was created, more than 50 years ago, the Ibovespa had a portfolio of 17 stocks worth 100 cruzeiros.
A lot has changed since then, but the idea still works in a very similar way.
The theoretical portfolio of the Ibovespa is based on the liquidity of the assets on the stock exchange. And the current score of the Ibovespa is the weighting of the value of the shares that are part of the index.
Each point is equivalent to one real.
This means that if the index is at 100,000 points, it represents a portfolio with a value of R$ 100,000. In short, this is the exact value of the theoretical portfolio of the most liquid stocks on the stock exchange.
Obviously, the number of points is necessary to understand the stock market's appreciation, since when the Ibovespa score rises, it means that, on average, the shares have appreciated.
On the other hand, if it falls, it means that a large part of the stocks have fallen.
However, the most important thing in this analysis is the variation in the score over a given period.
When you say that the Ibovespa fell or rose, you mean that the companies that make up the IBOV showed the same behavior. And that is why this index serves as a reference for analyzing the performance of stocks and other variable income assets.
How is Ibovespa calculated?
The calculation is based on the weight that the share has in the theoretical portfolio, multiplied by the share price on the day.
By performing this operation with all the shares that make up the portfolio, you can find the number of Ibovespa points. As we said, each point of the index is worth one real.
It is important to mention that stock prices are checked at all times and the calculation is performed automatically based on new prices.
In other words, the index undergoes constant variations.
How to follow the Ibovespa chart?
To help you track this index and analyze stock performance, we will present the best information channels you can use to check the Ibovespa chart.
Just look:
B3 website
On the Stock Exchange website itself, you can check the updated index by percentage.
B3 allows investors to filter the analysis through shares, indexes and various assets traded on the market.
Finance websites
There are excellent finance websites for you to follow the index.
Among the main ones, we can mention:
• Uol Economy
• Invest News
• Info Money
Home broker
It is also possible to monitor and analyze graphs through the home broker.
Basically, the home broker is the main means of accessing the stock exchange. This tool is provided by the brokerage firm where you registered to invest.
What are the main stocks that make up the Ibovespa today?
Among the main stocks that make up the Ibovespa in 2021, we can mention:
• B3SA3 (B3)
• MGLU3 (Magazine Luiza)
• ITUB4 (Itaú Unibanco)
• PETR3 (Petrobras)
• PETR4 (Petrobras)
• ABEV3 (AMBEV)
• WEGE3 (WEG)
• VALE 3 (VALE)
To follow the portfolio of the day, Click here.
What is the difference between Ibovespa and Ibovespa futures?
The Ibovespa is the main market index of the Brazilian stock exchange, the B3.
The Ibovespa futures are a derivative contract traded based on the expected value, in points, that the Bovespa index will present on a future date.
This type of investment has its gains and losses linked to the variation of points in the index.
Conclusion
Now you know what Ibovespa is, how it works and where to follow the index.
If you want to start trading on the stock exchange and be successful in the financial market, it is essential that you constantly analyze the performance of your shares or, alternatively, count on the help of a professional manager!
