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Rise and Fall of Capital Markets in Brazil, the Experience of the 90's (Ascensao e Declinio do Mercado de Capitais no Brasil - a Experiencia dos Anos 90)

38 Pages Posted: 20 Jun 2008 Last revised: 30 Jun 2008

Antonio Gledson De Carvalho

Fundacao Getulio Vargas School of Business at Sao Paulo

Date Written: August 1, 2000

Abstract

The Brazilian capital markets, in special the stock market, apparently had great development in the 90's - mainly when one considers market capitalization, traded volume and new issues. However, several signs of decline appeared at the end of the decade - decline in volume traded and new issues. High interest rates, ADRs and CPMF (tax on financial transactions) are commonly blamed for this reversion. This article presents another diagnosis. It shows that the referred development was illusionary since 1) the number of public firms was declining since the beginning of the decade, and 2) market concentration was increasing (i.e., only a small number of firms took advantage of the expansion). Some elements indicate that the low protection for minority investors is one of the reasons for the atrophy of the Brazilian capital markets.

Notes: Downloadable document is in Portuguese.

Keywords: capital markets, corporate governance, stockmarket

JEL Classification: G10, G30, O16

Suggested Citation

De Carvalho, Antonio Gledson, Rise and Fall of Capital Markets in Brazil, the Experience of the 90's (Ascensao e Declinio do Mercado de Capitais no Brasil - a Experiencia dos Anos 90) (August 1, 2000). Available at SSRN: https://ssrn.com/abstract=1147765 or http://dx.doi.org/10.2139/ssrn.1147765

Antonio Gledson De Carvalho (Contact Author)

Fundacao Getulio Vargas School of Business at Sao Paulo ( email )

R. Itapeva, 474 - 7o. andar
Sao Paulo 01313-902
Brazil
+5511 3281-7767 (Phone)

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