Corporate Finance

Brazilian 2017 IPOs Have Already Surpassed 2016’s totals

The Brazilian stock exchange market continues to grow as the country reemerges after its economic turmoil.

The Brazilian stock exchange market continues to grow as the country reemerges after its economic turmoil.


The Brazilian airline Azul completed its initial public offering (IPO) on April 10th, raising R$2 billion. It was the largest IPO since 2013, when B.B. Seguridade raised R$11.4 billion.  This was also the third IPO conducted in Brazil in 2017 and despite being only four months into the year, it already moved more money than the whole of 2016.

 

Last year, the Brazilian market only had one IPO, from the medical group Alliar, which moved R$766.4 million. In 2017, the car rental company Movida raised R$645 million with its IPO, while Pardini moved R$877.6 million. Both IPOs occurred in February.

 

 It is estimated that the Brazilian market will continue to grow, with the more optimistic predictions forecasting 40 IPOs in the country, whereas the most conservative predicting 15. Regardless of what the number turns out to be, the rise of IPOs will be gradual, becoming stronger in the second semester of 2017.
 

Edemir Pinto, CEO of B3 expects that foreign investors will lead the interest in the Brazilian stock market. “The Brazilian investor will take a bit longer to invest, but  foreigners have already started doing that, because they look more towards the long-term future” he said.

 

According to Renato Ejnisman, executive director of Bradesco, several companies are already preparing operations to start issuing shares, especially after July, when they expect the signs of  economic recovery are expected to be clearer.

 

“We are at a turning point. We see a recovery in the second semester, from a capital market perspective. There are investors interested, specially overseas ones, due to the size of the Brazilian economy,” said the executive, who believes that 10 to 15 client companies of his bank are ready for the process and that number could  go up to 30, even 40, with a steady improvement of the economy.

 

C.S.

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