BOVESPA shareholder base increases by 80%

The world’s stock markets were marked by uncertainty and growing risk aversion on the part of economic players during the course of 2008. The deepening of the U.S. mortgage crisis, the ensuing losses recorded by international financial institutions and the expectation of lower economic growth rates around the world all helped to fuel the worldwide deterioration in consumer and investor expectations.

Movimento da Bolsa de Valores de São Paulo (Bovespa)
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One of the consequences for Petrobras of the worsening of the global economic and financial scenario was the reversal of the upward trend in oil prices, which reacted in the same way as the other commodity prices. In the light of the predictions of reduced global economic growth, the price of oil fell sharply in the second half of the year, to close 2008 at US$ 41.76 a barrel, down from US$ 93.89 a barrel at the end of 2007, representing a 56% drop.

The climate of uncertainty provoked considerable stock market volatility and, in spite of forecasts that the developed economies would bear the brunt of the crisis, the stock markets found themselves subject to profit taking. Following successive annual gains, the negative outlook led, in 2008, to heavy falls in the market capitalization of companies in a variety of different segments, revealing that this was a general trend, and not directed at any specific sector.

Despite the good results achieved by the different segments of the company, the positive news on the operational front, with various discoveries of oil and gas, and the healthy cash generation and record annual profit, Petrobras’ shares and ADRs were also hit by stock market profit taking.

The company’s common (PETR3) and preferred (PETR4) shares, traded at the São Paulo Stock Exchange (Bovespa), lost 48% of their value during the year. At the New York Stock Exchange (NYSE), where the company’s common (PBR) and preferred (PBR/A) receipts are traded, the loss was 57%. The difference between the losses in these two markets was basically linked to the exchange rate, which saw a significant devaluation of the real against the dollar during the year.

The falling values of the shares and ADRs were accompanied by an increase in the financial trading volumes, in both the Brazilian and U.S. markets. Whereas in 2003, the daily trading volumes at the NYSE and the Bovespa amounted to approximately US$ 60 million, in 2008 it was close to US$ 2 billion. The increase in the NYSE trading volume confirms that the company has attained a high and growing level of liquidity in the world’s principal market, the capacity to secure funding and the potential for its securities to appreciate in value, even in an unstable scenario where credit is restricted. During 2008, the shares and ADRs of Petrobras were the most heavily traded stocks, both at the Bovespa and at the NYSE.

EXPANDING THE SHAREHOLDER BASE

On March 24, 2008, approval was given at an Extraordinary General Meeting of the shareholders for the splitting of the shares representing the capital stock of Petrobras. On April 25th, a new share of the same type was granted for every existing share issued by the company. The same proportion was adhered to in the case of the ADRs traded in the U.S. market. As a result, the same ratio was maintained, of two shares for every ADR.

One of the main objectives of this stock split was to increase the liquidity of these securities and of Petrobras’ shareholder base as a whole. Despite the climate of uncertainty, the company’s shareholder base at the Bovespa grew by 80% during the year, from 190,952 in 2007 to 344,179 at the end of 2008. Adding to this the number holding Petrobras stock through investment funds (443,209), those who have invested in Petrobras through their FGTS (length of service indemnity fund) resources (100,426) and the holders of ADRs (around 82 thousand), the total number of investors holding securities linked to the company had reached almost 1 million by the end of the year.

During 2008, the company paid out a gross dividend of R$ 1.5360 per common or preferred share, in relation to the 2007 financial year. The total amount paid out came to R$ 6.7 billion.