Interest rates, volatility push Brazil down in stock offerings ranking
The dearth of deals caused Brazil to lose nine positions in the global ranking of stock offerings in 2023. With key interest rate Selic still at 13.75% per year and holding back investors’ appetite, the country moved to the 19th position now from the 10th place occupied in the last two years, according to Dealogic, a consulting firm that measures capital market activity around the world, taking into account the figures for the year up to April.In practice, this means that capital market activity in Brazil has contracted more than in other regions of the world, as global equity issuance has declined due to the scenario of rising interest rates to fight persistent inflation. The result so far reverses a positive expectation of investment bankers at the end of last year when they predicted many offerings ready to come to market still in the first months of 2023.In terms of dollar volume, the local stock exchange has seen $1.5 billion in transactions, with a few big-ticket secondary offerings helping to boost the figure. The transaction by cash-and-carry Assaí, the largest so far in 2023, totaled R$4.1 billion, with Casino selling shares to honor financial obligations in France.Next, healthcare companies Hapvida and Dasa tapped the market to reduce debt levels but had the support of their controlling shareholders to ensure the success of the operations. The fourth offering was that of waste manager Orizon - Jive fund sold its stake and left the company. The only IPO by a Brazilian company was that of the oil company Seacrest, which chose the Norwegian stock exchange to list its shares.With these offerings, the share of stock offerings in Brazil corresponded to 0.88% of the global volume, according to Dealogic. In 2022, when it occupied the tenth position, this share reached 2.46% with the help of the R$30 billion offering that privatized power utility Eletrobras, which boosted the volume in that year.In 2021, the Brazilian share was 1.96%. The best position in the last decade was seen in 2019, when Brazil was sixth in the ranking, with a share of 3.5%. However, in 2018, an election year and a year of great polarization, Brazil accounted for 0.6% of the world, placing it in the 22nd position, still taking into account stock offerings.However, there are some signs that the market is beginning to calm down. In the United States, the IPO of Johnson & Johnson’s consumer unit Kenvue, which was closely watched by the market to assess the market...
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