The IPO (Initial Public Offerings) indexes measure the average performance of the stocks recently listed in the BOVESPA stock exchange.
Due to the increasing relevance of the stock market in the brazilian economy, and the sudden growth of IPOs in BOVESPA since 2004, the motivation to build these indexes was need of benchmarks to provide aggregated data about the behaviour of these new stocks to the financial market.
There are two IPO indexes:
- IIPO-1: is an equally-weighted portfolio based on the stocks that performed their IPO since 2004, and the stocks are added to the portfolio since its first trading day;
- IIPO-2: is an equally-weighted portfolio based on the stocks that performed their IPO since 2004, and the stocks are added to the portfolio after the first 22 trading days. The choice of this period of 22 days is to avoid the trades performed by "flippers", those that receive some allocation in the bookbuilding and seel their shares just after the IPO.
IIPO indexes and other Brazilian market benchmarks