How to Trade Brazilian Stocks?

How to Trade Brazilian Stocks?

Reading time: 5 min



To many investors from Eurasia Brazilian stock market seems exotic and perplexing. However, there are no myths and legends connected to it. This article fights stereotypes, tells the truth about Sao Paulo stock exchange, and gives several examples of trading Brazilian stocks.

History of Brazilian stock market

Sao Paulo stock exchange was founded on August 23rd, 1890. This was the first such entity in the country and is nowadays the largest stock market in Latin America. It is officially called B3 S. A. — Brasil, Bolsa, Balcão, or just B3 S.A. In 2003, B3 S. A. merged with the commodity market and is currently considered universal, giving access to almost all financial instruments.

Active development of the exchange began in 1965 when the Ministry ofFinance of Brazil took away the federal status of the exchange, preserving just regulating functions (as CVM, Commission for securities).

In 1997, B3 S. A. got upgraded, giving access to trading to not only market whales but also smaller investors via the Mega Bolsa system of electronic trades. It opened branch offices in London, Rio de Janeiro, and Shanghai. Then the exchange kept attracting investots who wanted become co-oners of the business by buying its stocks, trading freely.

Listing in B3 S. A.

To offer its stocks in the Brazilian stock market, a company must comply with the following conditions:

  1. No less than 25% of the stocks must be in free circulation. An exclusion can be made: if daily liquidity is high, the percentage of freely circulating shares may be decreased to 15%.
  2. In the board of directors, there must be no less than 2 independent directors, or no less than 20%.
  3. The issuer must be approved by CVM, the state regulator.

In the Brazilian stock market, a wide range of securities are traded, including:

  1. Shares
  2. Bonds
  3. Options
  4. Commodity and currency futures
  5. ETFs
  6. Indices
  7. Warrants
  8. Treasury bills (a 10-year futures contract for US treasury bonds)

Most liquid stocks in B3 S. A.

The "blue chips" of Sao Paulo exchange are the following shares:

  1. PETROBRAS is the largest oil company in Brazil.
  2. Itau Unibanco Banco Holding SA is one of the largest banks in Brazil.
  3. Banco Santander Brasil SA Unit is another well-known representatives of the banking sector.
  4. Banco Bradesco SA is the country's third-largest bank.
  5. Amber SA is the largest beer brewery in Brazil.
  6. Vale S.A. is a mining company.
  7. Banco do Brasil is the oldest and largest bank in the country.
  8. Itausa Investimentos Itau SA is a holding that contains Itau Unibanco, a pulp-and-paper manufacturer Curated, some chemical plants, etc.
  9. Telefônica Brasil is a telecommunication company.
  10. Klabin produces paper and package.
  11. B3 S. A. SA Brasil Bolsa Balcao are the shares of the exchange itself.

All these shares (except the last two positions) are now available on our R Trader web platform. Check full trading conditions at the end of the article.

How to trade Brazilian shares?

Differences between the Sao Paulo exchange and, say, the New York exchange are scarce. Hence, there are no special trading strategies or analysis methods for this exchange: the trader can use the whole range of techniques they practice in the US market.

However, several peculiarities should, indeed, be taken into consideration:

  1. The currency of the exchange is the Brazilian real (BRL). The exchange rate against the USD in July 2021 is about 0.19 BRL for 1 USD.
  2. Trading time is 16:10 — 22:55 (UTC +3).

Now let us take a look at some stocks from B3 S.A. and try to analyze their further movements.

Ambev SA (ABEV3:BVMF)

This is one of the largest beer companies in Brazil founded in 1999. It sells its products in 14 countries of North and South America.

On D1, there is the following picture:

After a pullback off the upper border of the ascending channel, the quotation keep recuperating. They have tested the horizontal support level, which might signal further growth. As long as the price remains above the 200-days Moving Average, the ascending dynamics are likely to continue to the target goal at the nearest resistance level, which is also the local high.

Judging by all the facts, we conclude that after a minor pullback and a test of the resistance level, the quotation will break it away and continue the uptrend.

The initial goal of the growth is 19.50. The shares look promising and worth buying on corrections.

Ambev SA (ABEV3:BVMF) shares for July 7th, 2021
Ambev SA (ABEV3:BVMF) shares for July 7th, 2021

JBS S.A. (JBSS3.BVMF)

This is one of the largest companies of the food industry that processes animal proteins.

Currently, its shares are falling to the lower border of the ascending channel. However, the quotations are still above the 200-days Moving Average, so when the quotations reach it, they are quite likely to bounce off it.

The aim of the pullback is 27.50. After a test of the support level and a bounce, the uptrend is likely to continue. The aim of further growth is the resistance level of 31.80.

However, if the consumption of the company's products falls, it might worsen the financial performance of the company and push the quotstions under the 200-days MA. In this case, the aim will be 26.50.

JBS S. A. (JBSS3.BVMF) shares on July 7th, 2021
JBS S. A. (JBSS3.BVMF) shares on July 7th, 2021

Itaúsa SA (ITSA4.BVMF)

This holding has subsidiaries that provide banking services, work in production, recycling, transportation of energy carriers, etc.

On the current D1, the quotations keep declining inside the ascending channel. They have two support levels in the way: the horizontal one near 10.35 and the 200-days MA. A breakaway here will signal further falling. In this case, the aim will lie at the next support level of 9.90

Also, as long as the central company has various businesses, the quotations have all the chances for recuperation. In the future, the price can renew the high and test 12.50.

Itaúsa SA (ITSA4.BVMF) shares on July 7th, 2021
Itaúsa SA (ITSA4.BVMF) shares on July 7th, 2021

Bottom line

Shares traded in the Brazilian stock market will definitely have their fans among traders and investors. In the future, they can become as profitable as the shares of market leaders, and their relatively low price can attract beginning investors and stock market speculators.

To trade Brazilian stocks, you need a broker account, enough knowledge of the market, trading strategies, and analysis, and be in the course of the peculiarities of Brazilian stock exchange.

Conditions of trading Brazilian stocks on R Trader:

  • Number: 30
  • Platform: R Trader (WebiOSAndroid)
  • Spread: from 0
  • Leverage: up to 1:5
  • Commission fee: 0.1% per share (10 BRL minimum)

Know more and start trading




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