B3 cuts entry data for foreigners in 2021 by BRL 60.8 billion after error

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B3 announced this Friday (20) the review of the balance of foreign funds that entered the Brazilian stock exchange in 2021 from R$102.3 billion to R$41.5 billion.

The review comes after the exchange operator identified a methodological error, disclosed in April, that had distorted the numbers since October 2020.

In addition, B3 said that the review announced this Friday also includes a temporal anticipation of the settlement of purchase and sale operations in stock offerings, whether subsequent (follow-ons) or initial (IPOs).

Previously, operations carried out by foreigners in stock offerings were accounted for by B3 only when companies disclose the closing announcement of the offering, which can take up to six months. Now, the data takes into account the exchange’s own settlement information, which takes only days.

“Now it is possible to reconcile the movements of the primary and secondary markets. If any foreign investor sold on the secondary market to make an acquisition in an IPO, we will show both the sale on the secondary (market) and the purchase on the primary”, Luís Kodic, director of products and data at B3, told journalists. .

If B3 had revised the 2021 numbers just for the methodological error, the negative impact would have been BRL 77.9 billion. However, due to the temporal change in the settlement of operations in IPOs and follow-ons, which has a positive effect of R$17.1 billion, the total figure fell by R$60.8 billion compared to what had been previously disclosed, to R$17.1 billion. $41.5 billion.

For 2020, the total impact on the entry and exit of foreigners was positive by R$ 3.3 billion, which made the balance, until then reported as an outflow of R$ 2.6 billion from B3 in the year, remain positive by around R$ 700 million.

The impact in 2020 is smaller given that the methodological error started in October of that year, when B3 started offering loan operations on screen, said Kodic.

methodological error

The methodological error disclosed in April is related to the inclusion of stock loan operations on screen from October 2020. This data should not have been included as entry and exit of foreigners, because there is no financial flow in the operation, according to B3 .

At the time of the review in April, the balance of foreign flows on the Brazilian stock exchange was corrected from an entry of R$91.1 billion to R$64.1 billion in the first quarter.

The current total balance in 2022 is an entry of R$ 49.3 billion, until May 18, already including the effect of the change in the temporal accounting of stock offerings.

Source: CNN Brasil

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