Bovespa CEO Sees IOF Tax Cut

BM&F Bovespa’s CEO Edemir Pinto is expressing optimism over the possibility that the Brazilian government could soon adjust, or eliminate altogether, the 2% IOF tax on stock investments. “We believe in the short-term that we can have an agreement to revise the IOF over shares,” said Pinto talking at a Bradesco investment forum in New York Wednesday. This comes as Brazilian stock exchange officials carry out discussions with the government about the logic of maintaining such a tax. Pinto acknowledged that the BM&F Bovespa’s stock has been weighed down partly because investors have priced in regulatory risks. The elimination of the tax is seen as an important step for a capital market that still relies heavily on foreign capital. Between 40 to45 Brazilian companies are still waiting to come to market after Petrobras’s massive capital raising last year and ongoing volatility forced them to stay sidelined, Pinto adds. Emphasizing the growth potential of the country’s equity markets, Pinto noted that only 300 of Brazil’s largest 1,000 companies are listed on the exchange.