Category: Equity

Shares of state-owed Banco do Brasil, Latin America’s largest bank in terms of assets, rose dramatically yesterday, Thursday, on news of a possible sale. The government is thought to be ready to launch a secondary offering of shares imminently as a further step towards listing the bank on Bovespa’s Novo Mercado. The Novo Mercado has higher corporate governance standards than the main market. The bank’s shares closed the day up 5.06%, trading at 59.99 reais.

Steelmaker Ternium, headquartered in Luxembourg, has listed its ADS on the New York Stock Exchange, raising $496 million at a price of $20 per share, 14% above the price expected by the market. Ternium, which was created by Argentine Grupo Techint, is Latin America’s second-largest steelmaker with operations in Argentina, Venezuela and Mexico. The funds raised by the IPO are to be used to pay down debts incurred last year by its acquisition of plant in Mexico. The IPO was led by Citigroup.

Brazilian property developer and construction company Gafisa is to issue 400 million shares via Bovespa’s ‘Novo Mercado’ on 17 February. Of these, 26.7 million will be offered via a primary offering and the balance of 13.3 million via a secondary offering. The shares will be sold to local investors and under the 144A rule to US investors. Foreign investors can buy the shares as GDRs. The sale is being arranged by Merrill Lynch and Banco Itaú.

Brazilian investment bank Pactual may be about to practise what it preaches: the firm that has been active in recent years in advising clients on issuing IPOs, is itself considering an initial public offering to generate cash flow for expansion plans. There has been a renaissance of IPOs in the Brazilian market in recent years. Last year, Pactual led six of the 18 IPOs on the São Paulo exchange. Two months ago talks broke down between Pactual and Goldman Sachs regarding a possible partnership.

Brazil’s annual inflation fell in 2005 to 5.69%, continuing a three-year downward trend. The IPCA consumer price index rose only 7.6% in 2004 after climbing 9.3% in 2003. The slowing inflation figure is another indicator that the central bank may go for a larger interest rate cut next week. However, Brazil’s benchmark lending rate, currently at 18%, continues to be among the world’s highest and the economy contracted by 1.2% in the third quarter of last year compared with the second.

Stock and bond prices climbed after the government repaid $9.5 billion in loans to the International Monetary Fund, severing links with the organization that the government blames for the country’s financial collapse in 2001-2002. The Buenos Aires Stock Market’s Merval index rose 2.97%. Restructured peso bonds with GDP warrants rose 2.46%. The Central bank intervened in the foreign exchange markets to keep the peso stable, buying $51 million for its reserves, which rose to $18.58 billion after the IMF payment.

Brazilian realty firm Company SA is planning a public offering of shares on Bovespa’s Novo Mercado. The company is hoping to raise around 200 million reais ($85 million) through floating 40% of the company’s stock.

Panamanian airline Copa Holdings has debuted on the New York Stock Exchange, exceeding expectations to achieve a price of $20 per share. The shares had originally been forecast to sell at between $15 and $17 per share. The 15.8 million shares sold, mainly by shareholders Cia. de Inversiones Aereas SA y Continental Airlines Inc., raised $315 million.

Accountant Jorge Weskamp has been elected the new president of the Rosario Stock Exchange in Argentina. He will take over the position from outgoing president Federico Boglione and will serve for two years.

Brazil’s state-owned oil company Petroleo Brasileiro SA (Petrobras) has increased its weighting in the benchmark Bovespa index from 7.34% to 8.97% and is now only barely 1 percentage point off the index leader Tele Norte Leste Participações SA (Telemar), whose weighting dropped from 9.31% to 8.33%. The revised stock weightings were announced yesterday, Thursday, and will take effect on 2 January. The index is rebalanced every four months.