IPOs in Brazil have stalled since September


Rising interest rates, a stagnant economy and struggling stock markets have led dozens of Brazilian companies to end their IPO plans, without an initial public offering (IPO) launched in the country since the beginning. September, Bloomberg reported on Tuesday (Dec. 7).

In the first eight months of the year, 48 Brazil-based companies raised a record 65 billion reais (about $ 11.5 billion), according to the report, which noted that the past three months could set the stage for the Brazil has a long lack of IPOs across the nation, in part because of political tensions ahead of a presidential election.

“A significant drop is expected as Brazil faces an election year and increasing volatility,” Roderick Greenlees, head of investment banking at Itau BBA, the main underwriter for IPOs, told Bloomberg. in Brazil.

Global IPOs have raised more than $ 600 billion this year, but in recent months fewer companies have reached the finish line and gone public, with inflation and the omicron variant of COVID-19 among top culprits scaring investors into taking the plunge, the report says.

“The scenario already looks more difficult,” Eduardo Miras, head of investment banking at Citigroup in Brazil, told Bloomberg.

The decline in IPOs in Brazil coincides with a decline in the overall stock market, according to the report.

At the end of last month, Nu Holdings, the parent company of Nubank, based in Brazil, reduced the size of its planned IPO by 20% of the total implied value of the neobank which has not yet been listed. The company’s valuation has grown from around $ 55 billion in August to $ 40 billion today.

Read more: Nubank’s scaled-down IPO sparks questions about neobanks, IPOs, Warren Buffett and more

The update to Nu Holdings’ listing comes two weeks after German giant N26 announced it was pulling out of the United States after just 18 months.

Nubank continued to seek investors despite continuing economic turmoil on Wall Street over the omicron variant, rising interest rates, rising oil prices and more.



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