Glossary
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IBGE:Brazilian Institute of Geography and Statistics.
An indicator of the profitability of a hypothetical portfolio consisting of the shares traded the most on the São Paulo Stock Exchange (BOVESPA). Ibovespa is reviewed every 4 months and serves as an indicator of market behavior. Its makeup mirrors real operations made on BOVESPA's cash market as closely as possible.
International Financial Reporting Standards - international accounting standards promulgated by the International Accounting Reporting Standards.
General Market Price Index. It is researched by Fundação Getúlio Vargas. It follows the same methodology of IGP-10 and IGP-DI. Prices are surveyed between the 21st of a month and the 20th of the following month. The announcement is made on the 30th. This index is also announced on a provisional basis twice a month, the first time after a price survey from the 21st of a month to the 1st of the following month, and the second after a survey from the 21st of a month to the 10th of the following month.
General Price Index 10. It is researched by Fundação Getulio Vargas. It follows the same methodology of IGP-DI. Prices are surveyed between the 11th of a month to the 10th of the following month. It is announced up to the 20th of the reference month.
General Price Index – Internal Availability. It consists of the weighted average of the Wholesale Price Index (IPA, with 60% weight); the Consumer Price Index (IPC with 30% weight) and the National Cost of Construction Index (INCC, with 10% weight). Prices are surveyed between the first and the last day of the month and announced about the 10th of the following month.
A statement of a company’s results (Revenues and Expenses) in a given period.
It occurs in an operation to increase capital reserves when there is incorporation of the company's capital without issuing new shares.
An unexpectedly higher inflation rate may erode investment gains, especially those with a prefixed return.
National Consumer Price Index. It is calculated by the Brazilian Institute of Geography and Statistics in II areas. It shows the variation of the cost of living for families with incomes from 1 to 8 minimum wages in a complete month.
National Broad Consumer Price Index. It is calculated by Brazilian Institute of Geography and Statistics and is intended to reflect price fluctuations in the price of goods and services for families with incomes between one and four minimum wages in the eleven most important state capitals in the country. This is the index the government has been using to outline its inflation target strategy.
Someone who benefits from information yet to be announced to the public.
An institution that has sizable funds kept with certain stability and allocated to a risk reserve or asset income and that invests part of them on the securities market. Some examples are insurance companies and Pension Funds.
It is the average interest rate for one-day interbank operations recorded at CETIP (Clearing House for the Custody and Financial Settlement of Securities).
Remuneration that a borrower must pay to the owner of the amount loaned.
One way of distributing earnings to shareholders. Established through Law no. 9.249/95, it allows companies to include, in the amount owed to their shareholders as dividends, the interest paid or credited on shareholders equity, for tax/fiscal purposes. The interest thus paid is deducted when real profits are calculated.
This risk is related to the possibility of changes in interest rates during the holding period of an investment. Brazil’s Central Bank requires that the yield of prefixed funds be calculated by the price fluctuation of all the securities in the fund portfolio. If the Central Bank raises interest rates, the current value of these prefixed securities falls. This happens because the amount received for the redemption of prefixed securities does not change, but the current value falls to adapt to the new interest rate. This drop in security prices is transferred to quota values and consequently to fund profitability. Conversely, portfolio security prices rise if interest rates fall.
Investment funds allot their resources to investments in different markets, in compliance with required limits and/or the limits laid down by the fund’s rules and regulations.
Tax on Financial Transactions. For fixed income funds with daily liquidity, the Federal Revenue Department created a table for charging regressive IOF, which is applied to gross returns obtained up to the 29th day of the investment.
Broad Consumer Price Index. It is calculated by the Brazilian Institute of Geography and Statistics following the same methodology of IPCA. The difference is the price survey period, which is from about the 15th of the previous month to the 15th of the month of reference.
Weekly Consumer Price Index. It is calculated by Fundação Getúlio Vargas and announced every Monday. The variation refers to a 30-day period with prices surveyed in 12 state capitals weighted proportionally to each one’s population. IPC-S consists of about 450 products and services, divided into seven types of expenses (Food, Housing, Clothing, Health and Personal Care, Education, Reading and Leisure, Transportation and Other Expenses). The Family Budget Survey is based on the expenses of families with a monthly income up to 33 minimum wages.
Abbreviation of Initial Public Offering. It refers to the first sale of a company’s securities through a public offer on the market.
