BM&FBOVESPA Launches Real Estate And Consumer Indices

Starting on the first trading day of 2009, BM&FBOVESPA will begin calculating and publishing two new sector indices in real time: the BM&FBOVESPA Consumer Index (Iconsumo) and the BM&FBOVESPA Real Estate Index (Imobiliário). These new indices will be traded under the codes ICON and IMOB, respectively.

“The main objectives behind the launch of these new stock indices are to meet the demand of market participants; to broaden the scope of investment strategies; to offer new product benchmarks for the financial market, and to create the possibility of launching financial derivatives,” explained Murilo Robotton Filho, BM&FBOVESPA’s Chief Products Officer.

The start up of the calculation of these new indices will make it possible to create index funds called ETFs (Exchange Traded Funds). Currently, the Exchange offers four ETFs, two of which mirror in the portfolios of the recently created MidLarge Cap and Small Cap indices, the third mirrors the Ibovespa, and the fourth mirrors the IBrX-50. With the launch of the Iconsumo and the Imobiliário, the number of stock indices calculated by BM&FBOVESPA will have increased to 14.

The official announcement of the launch was made during a press conference held at the Exchange on December 16th. During that event, BM&FBOVESPA’s index coordinator, Rogério Marques, explained the composition methodology and the calculation of the indicators. Both the Imobiliário and the Iconsumo will have their portfolios reevaluated every four months, just like two of the Exchange’s better known indices (the Ibovespa and the IBrX-50).

Basic Characteristics
The purpose behind the Imobiliário is to offer a segmented view of the stock market, measuring the performance of stocks from companies representing the real estate sector (construction, real estate brokerage, and real estate development). Stocks that compose the index are selected for their liquidity and are weighed in accordance to their market value. The IMOB is composed of those companies listed at BM&FBOVESPA which best represent the real estate sector. Companies issuing BDRs, and those in judicial recovery, or bankruptcy are not included.

The objective of the Iconsumo is to offer a segmented view of the stock market, measuring the performance of stocks from companies representing the cyclical and non-cyclical consumer sector. Stocks that compose the index are selected for their liquidity and are weighed in accordance to their market value. The ICON is composed of those companies listed at BM&FBOVESPA which best represent the consumer sector. Companies issuing BDRs, and those in judicial recovery, or bankruptcy are not included.