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09.12.05
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BNDES and Bovespa launch a new offer of PIBB in the amount of R$ 1 billion
· R$ 800 million will be destined to retail investors
· The largest launching in the market directed to small investors
· Repurchasing guarantee of up to R$ 50 thousand
The president of BNDES, Guido Mantega, and the president of the São Paulo Stock Exchange, Raimundo Magliano, launched this Monday, the 12th, with the presence of the Minister of Development, Industry and Foreign Trade, Luiz Furlan, at Bovespa, a new offer of the Bovespa Brazil Index Securities [PIBB] Fund's quotas, with the objective of promoting the capital market development, popularization of investments in stock shares and consolidation of the index fund as an efficient and attractive instrument to investors.
This is the second public offer of the PIBB Fund's quotas, resulting mainly from the successful launching in July 2004. The PIBB Fund is the first Brazilian index fund, comprised of 50 shares of the leading Brazilian enterprises listed at Bovespa (IbrX-50 index).
The new public offer will be of nearly R$ 1 billion, exceeding therefore the R$ 600 million of the previous year operation. Of this total, R$ 800 million will be destined with priority to retail investors (individuals and non-financial legal entities) - signalizing the largest retail offer ever made at the market - and the remaining going to institutional investors in general (financial institutions, pension funds, insurance companies, mutual funds, third party asset management). Investors will be allowed until the next October 14 to make reservations with their stockbrokers.
The second offer of PIBB's quotas is coordinated by the banks Itaú BBA and Santander, selected based on technical qualification standards and lower commission. The coordinating banks have subcontracted a group of financial institutions - Banco Real ABN Amro, HSBC, Caixa Econômica Federal, Unibanco, Bradesco, Banco do Brasil, BankBoston, Citigroup and Safra - to form a pool to sell PIBB in the domestic market. The objective is to reach a large number of investors, by means of an extensive placement syndicate, which will involve all the leading retail banks and about 60 stockbrokers associated to Bovespa.
The small investor may apply a minimum of R$ 300.00
Aiming at the democratization of variable income investments and keeping, therefore, the strategy of the first PIBB launching, the new offer will favor the retail segment, which has the main objective of stimulating the small investors to apply funds in Stock Exchange. These small holders of savings may invest in PIBB a minimum of R$ 300.00 up to a maximum limit of R$ 500 thousand. Purchase orders over R$ 500 thousand will be directed to institutional offer.
PIBB's quotas may be booked as of today, the launching day. Retail investors will have a repurchase guarantee, for the same sales price to be defined in the offer, for investments of up to R$ 50 thousand (a value over the R$ 25 thousand of the previous offer). Deadline for the investor making an option for resale begins one year after the purchase of PIBB's quotas, and ends in December 2006. The repurchase commitment is a protection mechanism for the capital applied by the retail investor. This means that the amount initially invested is guaranteed, even if the shares' values do not rise in such period.
Two categories of investment in PIBB Fund's quotas will be allowed to the retail investor: the PIBB's Direct Purchase and the Indirect Purchase upon Investment Funds and PIBB Investment Clubs. The two latter alternatives were specially created for this offer.
In the Direct Purchase, the retail investor will make its purchase order directly to stockbrokers, during the booking period (going from next September 12 to October 14). The maximum limit for application via direct purchase order is R$ 1 thousand. But it may be below this value, depending upon the financial institutions involved in the operation.
In the Indirect Purchase, by means of Investment Funds (operated by banks) destined to investment in marketable securities and other financial market assets, the minimum value for investment is R$ 300.00. But, in the same manner, this amount may be reduced, depending upon the financial institutions involved in the operation. For the Indirect Purchase via Investment Clubs (usually operated by brokers), the minimum value for investment will be determined by the club's rules.
Market maker guarantees liquidity
The banks coordinating the public offer have contracted the broker Ágora Sênior to operate as "market maker" for PIBBs, with the contracting and operating costs on behalf of the coordinators of the operation. The market maker will negotiate PIBB Fund's quotas, guaranteeing liquidity for offers of lots up to 2,000 PIBBs (corresponding to about R$ 70 thousand), with a maximum spread of 1%. The objective of the market maker is to increase operations with PIBB's quotas in the market.
The new public offer, like the previous one, should contribute for the development of the Brazilian capital market and to release BNDES investment resources. The performance of this second offer of PIBB Fund's quotas is mainly a result of the successful first launching, the demand identified in capital market and the good perspective of performance for the stock market in Brazil.
The PIBB, with securities held by BNDES shareholding company [Bndespar], was the first stock index fund listed and negotiated at a Brazilian Stock Exchange. The primary issue of PIBB Fund's quotas was held on July 23, 2004, in an operation amounting to R$ 600 million in stock shares, equally divided for the institutional and retail segments. The latter had a participation of over 25 thousand investors. Since its launching, the PIBB Fund has obtained an average price increase of 57%, a quota being negotiated at R$ 41.25 on September 9, 2005.
Public Offer of PIBB's Quotas
Basic information:
a) Investors:
· Retail: individuals and non-financial legal entities, investing up to the limit of R$ 500 thousand.
· Institutional: purchase orders over R$ 500 thousand will be directed to institutional offer.
b) Value of the offer:
· about R$ 1 billion, with priority of allocation of R$ 800 million to retail investors.
c) Incentive for retail offer:
· protection of the capital invested up to the maximum of R$ 50 thousand per investor, with granting of sales option to investors.
· deadline for exercising sales option: beginning one year after definition of the distribution price, and ending on the last business day of 2006.
· the option exercise price will be equal to the sales price.
d) Forms of investment:
· direct purchase: the investor buys the security directly from stockbrokers.
· indirect purchase: the investor applies its resources to buy PIBB by means of Investment Funds or Investment Clubs.
e) Limits of application for retail investors:
· minimum of R$ 300.00 (indirect purchase operations) or R$ 1 thousand (direct purchases). These values, however, may be lower, depending upon the financial institutions involved in the operation.
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