No fewer than five non-Brazilian companies have filed to list their shares on the Bovespa since the start of August. That’s compared to eight in the rest of 2007, and three in 2006. In August, Campos Verdes, Sul América, Sistema Nacional Brasileiro de Educação, Laep and Brazilian Finance & Real Estate all put in papers for BDR deals. Brazil’s market is becoming a regional hub for non Brazilians looking to tap into the country’s liquid market, such as Argentina’s Banco Patagonia. For Brazilian businesses that want to incorporate offshore in places like Bermuda, such as Tarpon Investments, GP Investments and Cosan, but keep their liquidity in the country, it is also attractive.
Category: Equity
Posted inDaily Brief
Brazil Disciplines Laep for Quiet Period Breach
Brazil’s market regulator, the CVM, halted the IPO procedures for Laep Investments, a Bermuda-based private equity firm run by Brazilian executives, for 15 days because of remarks the executives made to local papers Valor Econômico and Folha de São Paulo last week. In a letter posted its website, the CVM cites quotations by Marcus Elias, president of the board of Parmalat Brasil, Laep’s most significant portfolio company, and João Audi, president of the same company, that explain parts of the company’s restructuring strategy and highlight its strong points with remarks that can very easily be construed as forward looking statements. In order to allow the information to filter through the market, says the CVM, it has suspended the procedure for 15 days, and the process will continue September 14. UBS Pactual is leading the deal, which will include BDRs.
Posted inDaily Brief
Gafisa Added to Bovespa
Brazilian homebuilder Gafisa has joined the Bovespa and IBrX-50 stock market indexes, in the most recent rebalancing. Its weighting in the Bovespa will be 0.66%, placing it 48th in the portfolio. Gafisa is one of the largest Brazilian homebuilders, and in March became the first with shares listed on NYSE.
Posted inDaily Brief
HSBC Names LatAm I-Banking Head
HSBC has named Jim Rossman, former head of ECM for the Americas, to lead the global investment banking group’s LatAm unit. Rossman’s title is a new one for the shop, which is better known for its retail presence. Rossman tells LatinFinance he will oversee investment banking and ECM, project finance, and commercial lending for the region, which includes Mexico, Argentina, Chile, Brazil, Colombia and Panama. He reports to Anthony McCarthy, head of LatAm corporate and investment banking and markets. DCM and syndicated loans for the region, currently under the markets group, is headed by Gerardo Mato, who also oversees DCM for the Americas, including the US and Canada, and the recently formed liability solutions group, which includes derivatives and treasury products. David Noble, formerly in charge of ECM origination in the Americas, is now head of ECM for the US, Canada and LatAm. Among the next steps for HSBC’s investment banking effort is to build up an M&A team, and to add on high-margin businesses like leveraged finance to take advantage of its balance sheet.
Posted inDaily Brief
Amil, FARMASA and MB File IPOs
Brazil’s Amil Participacões has filed an IPO on the Bovespa. With more than 2.4m beneficiaries, it is the county’s largest healthcare provider, according to Brazil’s health ministry. Amil didn’t disclose a timetable or financial details of the offering, but plans to sell only common shares, indicating that it could offer shares on the Novo Mercado. Credit Suisse and UBS Pactual are the leads. Brazilian pharmaceuticals firm Laboratório Americano de Farmacoterapia (FARMASA) is also planning a Brazilian IPO. The manufacturer of the analgesic Lisador did not disclose a timetable or amount of the offering. UBS Pactual and Credit Suisse are also leading that one. Meanwhile, Brazilian real estate company MB Engenharia has also registered an IPO on the Bovespa through Unibanco and Goldman Sachs.
Posted inDaily Brief
Brazil’s BRMalls Preps Equity Follow-On
BRMalls, the Brazilian mall acquisition and holding company, has filed plans to tap the international and Brazilian equity markets in a follow-on to its April 2007 IPO. The Novo Mercado listed company hopes to be the first Brazilian to issue equity since Cosan’s disastrous August deal. The sugar producer raised a less than expected $1bn as well as the ire of investors who saw their influence diminish amid an ownership restructuring that tightens the grip of the company’s controlling shareholder. Itaú BBA is lead arranger on BRMalls, with UBS and Citi as joint-leads.
Posted inMagazine
Sharp Bovespa Correction Looms
Brazil’s benchmark Bovespa equity index has more than quintupled since July 2002. However, a growing number of investors is braced for a correction.
Posted inMagazine
All Roads Lead to Brazil
Brazil’s Bovespa has clearly supplanted offshore alternatives as the primary source of equity capital in Latin America. Around 80% of the $28 billion raised through 84 offerings between January and mid-August took place on the Bovespa, according to Dealogic. Argentina’s Banco Patagonia became the first non-Brazilian entity to choose the exchange for a primary listing. And there is a pipeline of issues from countries with capital controls such as Argentina and Colombia mulling primary listings on the Bovespa in coming months, says Sebastien Chatel, head of LatAm ECM at Credit Suisse.
However, as the global credit crisis deepens, the exchange remains highly exposed to the whims of foreign investors. According to the Bovespa, foreign investors bought 73.4% of the 28.9 billion reais in equity capital raised in the first seven months of 2007. The exchange was pummeled by global equity meltdown in August and it remained to be seen how much further Latin markets would fall. But Chatel saw the drop as a healthy correction in the Brazilian market and says a combination of greater risk aversion and a heavy pipeline will make investors more selective going forward.
Posted inMagazine
Don’t Panic
As we went to press, Latin markets gapped lower and the Bovespa was almost back where it started the year as the bloodiest US credit market conditions in recent memory […]
Posted inMagazine
IPOs: More Haste, Less Speed.
Brazilian equity markets have enjoyed another excellent first half, fuelling a record number of IPOs issued from an ever-wider range of companies. However some issuers are coming to market too quickly.