Category: Equity

Brazilian investment manager Tarpon Investments, which is headquartered in Bermuda, plans to price its IPO as early as today, Tuesday, according to Dealogic. The company, which specializes in private equity funds and has BRL1.53bn under management, is hoping to raise BRL540m, or $275m. It will sell 21m Brazilian Depository Receipts, or Bovespa-listed shares designated for offshore issuers at a range of BRL22-30. Credit Suisse is leading.

Chilean air carrier Lan raised $181.16m via the sale of 11.24 million new shares on Friday, according to the Santiago Stock Exchange. The shares were priced at 8,401.00 pesos ($16.24) or $80.56 per ADS, better than originally expected. The increase in its share capital will be used to fund LAN’s expansion plans over the next four years, which have an estimated cost of around $1.8 billion. The airline has units in Chile, Argentina, Ecuador and Peru.

Stable food prices helped to keep Brazil’s inflation down to 0.25% in April, according to the national statistics agency IBGE. Inflation, as measured by IPCA, slowed from 0.37% in March helped by a marginal 0.03% price rise in foodstuffs. Annual inflation, meanwhile, rose from 2.96% to 3.0%, while cumulatively prices rose by 1.51%.

Peruvian mining company Volcan is preparing to list its stock on the Santiago and London Stock Exchanges, the company announced. Volcan will be the first Peruvian firm to list in Chile and the second to list in London. The zinc miner will join Spain’s Endesa, Canada’s Aur Resources and Methanex on the so-called “offshore market.” Last year, silver mining company Hochschild Mining opted to float its stock on the London exchange.

Brazilian Banco Daycoval will join two other mid-sized banks to list on Bovespa this year – Sofisa and Pine – after it filed with the securities commission, CVM, to launch an IPO of preferred shares later this year. UBS will coordinate the offering. The São Paulo-based bank booked revenues of $218m in 2006, a 60% rise over 2005 sales. Other mid-tiered banks in the pipeline include Banco Cruzeiro do Sul, Banco Bonsucesso, and Paraná Banco.

Brazilian companies are lining up to issue IPOs on Bovespa. In filings with the local securities commission, the CVM, on Tuesday, credit-card services provider Redecard, clothing company Hering and logistic company Tegman all said they were planning an initial public offering of shares on Bovespa. Redecard is owned by Itaú and Unibanco, as well as Citi. Banco Itaú will coordinate the Redecard issue and will also be handling the offering being planned by Hering. Meantime, JP Morgan will coordinate the IPO being lined up by Tegma Gestao Logistica.

Brazil’s Banco Industrial e Comercial (BICBanco) is planning to float its stock on Bovespa, the company said in a filing with the securities commission, CVM. UBS is coordinating the offering. The Bank, which specializes in trade finance, was the country’s first bank to join the IFC’s Trade Finance Facilitation Program (TFFP) as an issuing bank, last February. It is the ninth-largest private bank, serving medium-sized companies.

Brazil is Citi’s top equity pick in Latin America. “We raise our year-end Bovespa target to 54,000, based on improving fundamentals, not valuations,” says the shop. It closed Monday at 48,961. Citi also predicts that the Selic will fall to 10.75% by year-end and cut its 2007 inflation forecast to 3.4%. “Macro growth prospects are rising, with the risk of positive earnings surprises; this warrants a modest re-rating of the market,” says Citi. The shop adds that the positive outlook is not affected the $12.5bn of supply in the past year from 44 deals, including secondaries. “The new estimated free float is 2.8% of market cap and only 7.1 days of trading. Excluding real estate/construction, the only sector where we see indigestion, new issues have risen 34% on average and have outperformed the Bovespa by 5%,” says Citi. It remains overweight defensive Chile, and underweight Mexico.

Mexico has jacked up rates 25bp in what the Central Bank presented as a bid to stem inflation. Stocks and bonds dropped in reaction to the surprise hike to 7.25%. Analysts had not expected the move since inflation seemed to be already under wraps. Another rise is not anticipated. The “corto” was left unchanged at MXP79m.