After review, the flow of foreigners on the Exchange changes from a balance of BRL 71 billion to a loss of BRL 7.2 billion in 2021

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The Brazilian Stock Exchange, B3, announced this Friday (20) the review of data on the flow of foreigners in the local stock market in the years 2020 and 2021.

At the beginning of April, B3 had already informed about the revision of the data on foreign investments in the Stock Exchange for 2022, which went from R$91 billion to R$64.1 billion, until April, a drop of approximately 30%.

According to figures reported this Friday, the flow of foreign investors in 2021, which previously pointed to an inflow of R$70.8 billion, has now been revised to a net redemption of R$7.2 billion.

In relation to 2020, previous data from B3 indicated that foreigners withdrew BRL 31.8 billion, when in fact the volume was negative by BRL 39.7 billion.

According to B3, the data that had been reported since October 2020 included stock lending operations carried out via the screen, when the service started to be offered by the Exchange.

“But this type of operation doesn’t have a financial flow, that is, it doesn’t have a payment from one side to the other. It’s just a loan, and it shouldn’t be accounted for as a purchase or a sale”, said Luis Kodic, director of products and data from B3, during a press conference with journalists last month.

The data now reflects transactions in the spot, options and forward markets, excluding asset lending data.

The error was discovered in the midst of an internal review process by the company itself, and also based on inquiries from customers.

The announcement made last month about the 2022 numbers generated a series of reactions on social media, with most publications criticizing B3’s failure in relation to the transparency of the numbers.

Change in methodology for IPO and follow-on data

Along with the announcement of the review this Friday, B3 also announced a change in the methodology for calculating the participation data of foreign investors via public offerings – IPO and subsequent offerings (follow on).

In the previous methodology, the Exchange used information from issuers’ closing announcements, which have a legal term of up to six months to complete.

With the change, the settlement data of operations carried out in the primary market on B3’s systems will be considered, with the lag being reduced to two days.

“The adjustment offers more timeliness to the data, reduces the chance of inconsistencies in filling in the information and, as it has the same classification methodology used in the secondary market, it allows the reconciliation between the trading data of these investors in the different markets”, informed B3. .

With the change, the data on the participation of foreigners in IPOs and follow-ons increased from R$3 billion to R$3.7 billion in 2022, until April.

In relation to 2021, the number went from BRL 31.6 billion to BRL 48.7 billion, and from BRL 29.2 billion to BRL 40.3 billion in 2020.

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