Global Accounts Stay the Course in Latin Equity as Volumes Double

International investors have supported recent equity issues despite volatile conditions, says an ECM banker as the market ends a busy first half of the year. Latin equity issuance more than doubled year on year in the first half, hitting $21.4m equivalent from 46 transactions, according to Dealogic. While the number of deals is not vastly higher than the 36 sold in the first half of 2012, the amount issued is more than twice the $9.8bn sold in that period. The sharp increase in equity sales has sparked a shake-up in the league tables, also. Credit Suisse, which ranked 10th in the first six months of 2012, led Dealogic’s ECM league table for the year on July 1. Itau BBA similarly jumped, from ninth to second place, pushing BTG Pactual, which led the table this time last year, into third place. Difficult market conditions in recent weeks have slowed the pace of issuance: one follow-on was downsized and another shelved last week as share prices dropped. Yet despite the volatility, foreign investors have continued to underpin the new issuance market, says Santiago Gilfond, managing director, ECM, at Credit Suisse. “You’d think that in volatile times foreign investors would flee, and issuers would rely more on domestic investors. But recent transactions have been somewhat the opposite. We’ve seen foreign investors represent a larger proportion of demand, in part because it is a broader investor base.” Despite growth of Mexico’s institutional investors, for example, they remain limited as a buyer base, he says. “There are a limited number of pension funds and asset managers, and then there are retail accounts. Having some key local investors not participate due to market volatility has a disproportionate effect.” But local investors will look increasingly at equity issues as they expand and regulators allow them greater freedom to do so. “Latin American investors, in particular pension funds, are going to be more focused on the international equity market as their options