PagSeguro Digital’s $2.3bn IPO from earlier this week underscored what has been a week of record gains in Brazil’s B3 stock exchange, which swelled above 83,000 points on Thursday.

Fund managers are piling into the country’s stocks after a Brazilian court upheld the corruption conviction against former President Lula, effectively scuppering his chances of regaining the country’s top job.

For the online digital payment processor, orderbooks were so heavily oversubscribed, underwriters priced the stock above the suggested $17.5 to $20.5 range. And as investors continued to roll into the B3, PagSeguro’s American Depositary Shares jumped to more than $29 on Thursday from its $21.5 launch price.

The IPO was the largest from Brazil since BB Seguridade’s 2011 share sale and it was the largest trade on the New York Stock Exchange since Snap Inc. went public in March last year.

According to a report from Capital Economics, the court’s decision over Lula will continue to jolt the capital markets, but the consultancy warned that the buoyed sentiment may “fizzle out” if no “credible reformist emerges. 

Parties have until August to file their chosen candidates, and as of now, very few have emerged to challenge Lula.

While the verdict harms the former leader’s chances, it does not rule them out. Lula can still challenge the decision in the Superior Court of Justice and if necessary, the Supreme Court. He can also file for an injunction, which, if granted, would allow him to run for office once again.

Capital Economics predicted that he still has a roughly 30% chance of ending up on the ballot sheet.

Emerson Pieri, a managing director at Barings Investments said in an email that the market had a “bias to believe in a unanimous result,” and believed the impacts on the stock exchange and dollar could be “durable.”

Bond issuers jump on gains

While the equity market soared, Brazilian bond issuers also wasted no time in capitalizing on market conditions.

State-run energy company Petrobras is chancing its arm today (Thursday), setting price talk in the low-to-mid 6% area for a 2029 bond, DCM sources said. Cosmetics arm Natura also wrapped up its investor meetings and immediately set initial price talk in the High 5% area for a five-year bond.

Both companies are expected to price their new debt issuances before close of business Thursday.