Corporate Financing Analysis - Brazilian IPOs Are On Their Way Back (For Now) - 10 APR 2017


After a long wait, the healthy pipeline of deals suggests that the Brazilian IPO arena might finally have something to cheer about over the coming months and quarters. A flurry of new applications to list since the turn of the year has provided a welcome boost to the South American nation's arena for new listings after a prolonged run without a significant float to speak of. Despite this positive trend, the underlying weakness of Brazilian equities remains a factor that threatens to topple the y-t-d equity capital market (ecm) rally and as a result suggests to us that the recovery in local floats in South America's largest economy will continue to stutter over the coming quarters rather than strengthen into a full-blown market renaissance.

Where It Went Wrong

We note that it was not long ago that Brazil was the king of the IPO ring in Latin America. However, a slowdown in economic growth coupled with a series of political shocks that have hit the country more recently have served to stop growth story - and consequently its market for new listings - in its tracks. As a result, the regional IPO crown, which was Brazil's for eight consecutive full-year periods through to the end of 2011, has since passed over to regional rival Mexico, which has since been sitting on top over the last few years ( see ' The Temporary Slip In Brazil ' s ECM Crown ' , January 2 2013).

Ready For An Uptick
Brazilian IPO Activity By Deal Value, USDmn
Source: Zephyr, a Bureau van Dijk product , BMI

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